Booming global F&B industry growth presents untold potential for the hotel sector. According to The Business Research Company, despite the pandemic, the hospitality industry grew from USD 2.67 trillion to USD 2.94 trillion between 2021 and 2022, representing a compound annual growth rate (CAGR) of 9.9 percent. In spite of current geopolitical challenges impacting the food supply chain, the industry continues to expand and is forecast to be worth USD 3.89 trillion in 2026, at a CAGR of 7.3 percent.
The surge in independent restaurants is driven by consumers’ inclination toward locally rooted brands offering authentic cultural flavors and dishes crafted from locally sourced ingredients. This trend opens up thrilling possibilities for hotels to partner with independent establishments, forming food hubs that attract both guests and local residents. However, ensuring the success of a hotel restaurant goes beyond relying solely on cuisine, ambience or trendy, Instagrammable moments, as there are additional factors at play in generating profits from such ventures.
Effective revenue optimization is crucial for independent outlets and hotel-owned venues. A revenue optimization culture should involve hotel departments and independent outlets, collaborating to identify profitability paths.
All systems go
Before defining the revenue optimization strategy, systems and processes must be delineated to avoid potentially catastrophic revenue leakage. Put systems in place from the get-go, from a procurement system to source products and recipe management systems for consistency and efficiency to a robust point-of-sale system. Undergo an RFP process to identify a systems vendor that caters to your business needs. Systems are tools to measure, and measuring is a must because what gets measured can be improved.
Engineer your menu
Collecting and analyzing clean data is vital, and there are many great business intelligence tools available designed to disseminate restaurant performance. This helps to determine which items on the menu are profitable, cost-heavy or not selling at all, enabling you to adjust or engineer your menu. After that, menu design comes into play, considering where items are placed and how they are presented or highlighted to sell them – high-margin dishes should be positioned at the top and star dishes should be framed to capture attention, for example. Think of your menu as a tool to take your customer on an upselling journey and get creative with names, as research reveals customers spend 15 percent more on menu items with an attractive or catchy title.
The price is right
Once you understand how your menu items perform, move on to the pricing and benchmarking exercise; determining the right price for the right customer is important. Seasonality is crucial too. A high-season customer has much greater spending power than a low-season client. This does not mean you discount or compromise your product, but you might be able to offer a bundle like a set menu, business lunch or early-bird special during your shoulder periods.
A tasty profit center
For hotels to succeed, every space, including F&B outlets, must be transformed into profit centers by maximizing ROI per square meter. When designing a restaurant from scratch, this can be factored in, and it’s worth bringing on board a revenue optimization expert to liaise with all parties, including the architect, owner and operator, to ensure floor space is optimized. Once operational, it is crucial to analyze demand and supply patterns. This involves assessing whether the seating arrangement aligns with the demand and if it is adaptable enough to accommodate popular mealtimes, for instance.
A recipe for success
If hoteliers and restaurants collaborate to concoct successful commercial strategies based on this revenue optimization approach, they can match the outstanding culinary experience with an exceptional performance.
Now there’s some food for thought.