How industry leaders are adapting to deal with plummeting F&B sales.
Radical problems call for radical solutions. Let’s take a look into real-life examples of how people in the industry are solving some of the toughest COVID-19 problems. Then take a deep-dive into how we can apply that thinking to our hotel business.
We are talking long-term sustainable, COVID-19-proof ideas that will make an actual difference.
For properties that keep operations in-house, hotel food & beverage typically represents 25% of total revenue — and that figure can grow year-on-year. Because of favourable margins and exciting new strategies, there’s a big opportunity to grow group revenue with hotel F&B.
Fortunately, food safety and hygiene has always been front-of-mind for great managers whether it be in the kitchen or in the restaurant.
Today you will not find a chef who will tolerate “floor-spice” or a front-of-house manager who will overlook a dirty fork, lipstick on a glass or even a smudge on a plate. It is this ingrained culture that has made it easy for people in the F&B industry to adapt to these COVID-19 safety measures quickly.
In the last few months of 2020, we have seen restaurants adopt completely new technologies, setups, and service protocols. It is now commonplace for hotel restaurants to have:
- Contactless menus (eg. via QR code)
- Disinfectant wipes on tables
- Disposable flatware
- Built-in social distancing
- Larger spaces between tables
- Plexiglass partitions
- Sanitation champions – an employee whose sole purpose is to sanitize surfaces
While these new regulations may have been easy to adopt and to implement, the real question is how do we earn our guests’ trust back and how can we do things differently to generate income, even during COVID-19?
5 Out-of-the-Box Ways Restaurateurs and Hoteliers are Making Money During COVID-19 Restrictions
This is a really interesting innovation from the lock-down in Germany where restaurants and bars are closed to the public but they are still allowed to provide takeaways. In this simple but brilliant idea people with motorhomes (hence “Mo-Ho-Meals”) drive to participating restaurants and park their motor home in the parking lot.
Once you have parked, a server with a mask and gloves (of course) approaches your motor home with a tray. On the tray is a candle, some beautiful flowers in an ornate vase, a table cloth, a menu and some condiments.
The order can be placed by telephone or the waiter will take the order from outside the vehicle. Once the food has been prepaid it is delivered to the guests via a tray and under a cloche so that all food safety precautions are taken and social distancing rules are not broken.
Guests absolutely love the convenience and the novelty. One guest remarked; “It’s my 60th birthday and we thought we were going to have to stay at home. We are really grateful they have come up with this idea and that we were able to celebrate my special day”.
The idea has seen a lot of success with locals with just a few local postings on Facebook like this one.
Use Your Supply Chain to Pivot your Model
- Do you have a fresh produce supplier? Yes
- Do you have a butcher? Yes
- Do you have amenities suppliers such as toilet paper, shampoo, toothpaste etc.? Yes
- Do you have a liquor supplier? Yes
Some hotels are offering a delivery service for local residents where they can provide them with locally sourced fresh produce, meats and general supplies. Anyone need a drink to take the edge off? Branded packaging and booking offers are also a must-have inclusion, to keep your hotel top-of-mind, post-COVID.
Following on from the above idea, hotels are going all out and converting empty conference rooms into full-on grocery stores offering everything that locals could possibly need. Always being sure to follow local COVID-19 restrictions to keep everyone safe.
With many restaurants being closed people are just dying to get in a meal that they have not cooked themselves (and one where they do not have to clean up after). Add to this that people are starved for things to do, and you have an amazing opportunity to make some creative sales. Certain hotels are leasing their space or opening as many takeaway stalls as permissible (hotels already have the chefs and equipment), a bit of local promotion and marketing and hey presto you have an entirely new revenue stream, that if done right, could even be more profitable than your existing F&B model. You could even slim-down or repurpose your serving staff requirements to make further savings.
Don’t be afraid to take a risk
“Everyone hates plane food”, have you ever heard that? Well no-one told Thai airways. At the beginning of the pandemic the entire Thai Airways fleet was grounded and their future looked bleak. Fortunately the land of smiles did not get the memo. Thai airways set up a restaurant in Bangkok which only serves the airline’s in-flight meals for those missing dining at 36,000 feet. Chairs have been replaced with airplane seats, and the tables are made from old plane engine parts. Meals cost between $3 and $5. Cabin crew are also there to welcome customers, who can choose between economy and business class seating options. What an amazing way to keep the team employed and spirits up all the while generating some income and keeping the brand-flag flying!
Even though some countries COVID-19 restrictions might not allow some or all of these, it is important to remember that we are just looking at these as golden examples of left-field thinking.
So how can we learn from these examples?
How can we think about things differently in order to optimize our resources, location, staff and industry knowledge. In the venn diagram below there are 4 questions that we can use to define what our unique position is to take advantage of an untapped market:
- What is your hotel passionate about? (passion)
- What is your hotel good at? (expertise)
- What do your guests need? (needs)
- What will your guests pay for? (value)
Let’s look at Thai Airways for example:
- What are they passionate about? Creating memorable experiences for their customers
- What are they good at? Providing affordable and tasty meals quickly
- What do their guests need? Food and drinks
- What will their guests pay for? Service
Eureka! You have a restaurant that offers a completely unique experience. One that guests love and one that keeps F&B revenue coming in.
All you need to do is answer each of the above questions to find out what will work for you. Where they all overlap (the red dot) is where your unique opportunity lies. And remember: the more effort you put into answering the questions, the better your end-result will be!
Figure 1: Take some time to answer the 4 questions in the circles then you will be able to figure out exactly what your hotel could be doing in order to boost your F&B revenue and make your guests happy at the same time!.
“All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me… You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.”
– Walt Disney, Resort Visionary and Hospitality Legend