The changing face of hotel foodservice

When it comes to feeding hotel guests, today's operators are fine-tuning the balance between the convenience of grab-and-go options and more traditional room service methods.

Courtesy of Fogo Island Inn. Photo by Alex Fradkin.

Courtesy of Fogo Island Inn. Photo by Alex Fradkin.

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By Marni Andrews

Fogo Island Inn, chef Murray McDonald loves to forage for mushrooms in the woods with his son or pick wild berries on the hillside. He finds the abundance of nature revitalizing and brings that inspiration to the award-winning kitchen of the 29-room luxury boutique hotel perched on the windswept, rocky shore. And he has never forgotten that the core of Newfoundland hospitality revolves around entertaining at home, specifically for supper.

“The [Fogo] kitchen’s culinary motto is ‘To find new ways with old things.’ We want to redefine the culinary identity of Newfoundland and Labrador by using the food this place provides through an exploration of the seven distinct seasons on Fogo Island,” he explains.

“I don’t treat the restaurant like a hotel restaurant. We’re doing New Newfoundland cuisine by looking at what we always did and moving it into the future. Without a foot in the past, connecting us to the land, you have soulless food,” adds chef McDonald. “We create food that is of this place, rock by rock, tree by tree, with a nod to the past but with a firm foothold in the future. A lot of travellers are looking for that now—food from the local area of wherever they are.”

It is such an attitude—with emphasis and punctuation on creativity, regionality and authenticity—that is rejuvenating hotel foodservice.  

Experiencing local food is an important part of travel, agrees Steve Flagler, director of food and beverage at the 970-room Blue Mountain Resort in Collingwood, ON. Offering locally-sourced menu items is a win-win for everyone, he explains because the guest receives fresh products, staff have a story to tell, the chefs have an intimate experience with the food they are preparing and the company supports the local business community.
For the year ending August 2013, foodservice traffic at Canadian hotels is up substantially over the past year at seven per cent and accounts for more than $1 billion in sales, according to Joel Gregoire, industry analyst, foodservice at The NPD Group, Inc. Most of that growth is coming from breakfast and lunch with breakfast representing 42 per cent.

In the same period, hotel restaurants accounted for six out of 10 visits of total hotel food business, says Gregoire, but this has dropped over the past year from 65 per cent. He says room service is capturing more share (from four to six per cent), while beverage/snack stations are growing share from three to five per cent. Catering occasions represent 16 per cent of accommodation traffic (this is up by 12 per cent).

“The challenge for the accommodation sector is to grow traffic while incentivizing the consumer to spend more and drive incremental dollars in addition to foot traffic,” suggests Gregoire.

“The line between hotels and restaurants in foodservice is blurring,” says Garth Whyte, president and CEO, Canadian Restaurant & Foodservices Association. “Hotels are understanding what repeat customers like and how to make them happy. People want smaller, quicker meals and flexibility. Some want 24/7 availability, others want snacks. Health and wellness is a huge trend, so are healthy kids’ meals.”

Moustafa ElGayar, food and beverage manager for the 119-room Shangri-La Hotel Vancouver, says that health and fitness and special diets have become a large part of hotel foodservice offerings.

“For a concept to succeed a hotel needs to offer as much variety and creativity with special diets as possible, as they can sometimes account for 10 to 15 per cent of diners in a restaurant,” he explains.

Room service

In their recent trends outlook, Kendall College’s School of Hospitality Management in Chicago notes that many hotels are reinventing room service programs in the face of declining sales. Some properties like the New York Hilton have eliminated it entirely. Yet the Fogo Island Inn and others have found ways to make it work by upgrading food and emphasizing impeccable delivery. They know that guests are looking for great service.

The Fogo’s room service is included in the room rate, which also covers three meals a day and snacks. As a service it is treated equally with other foodservice options. For example, at daybreak the Fisherman’s Basket is delivered to those guests who don’t want to rush to breakfast. A choice of coffee or tea, juice and a scone or muffin can be left at the door or brought into the room as desired, says chef McDonald.

“Room service is all about comfort food,” says Marc Dorfman, director of food, beverage and catering for the 259-room Four Seasons Hotel Toronto, which offers a mobile phone app with menus from which the in-house guest can order. “We have geared our menu to create a mix of international street comfort food with great success. From pad thai to Greek souvlaki, the menu is very popular with Canadians and international travellers.”

Robert Hood, corporate food and beverage manager for Atlific Hotels’ 55 properties, says all of Atlific’s full service hotels offer room service (what they call in-room dining) because it is a guest expectation. It’s also experiencing a resurgence.

“Traditionally, room service has been either really good or terrible. We call it in-room dining, which gives it a little more panache and so the guest understands what to expect. The hotels with a market for it can develop in-room dining into a very profitable department. It’s not just putting food on a tray and transporting that to a room,” he says.

“Properties that are very successful at it understand one very simple principle: our guests aren’t idiots. They have a certain expectation of what the food and the service has to look like and feel like—from the initial phone call to food being presented to the follow-up call. A lot of properties that fall short don’t understand that.”

In-room dining is more about relaxation, says Hood. “Certain cities full of restaurants still do very well with in-room dining. If it’s cold or the hockey game’s on, people will stay in. We’re able to measure the potential capture ratio for the number of rooms we’re selling. In-room dining never runs at a deficit because we charge a premium price,” he explains.

“Room service is a great concept but it’s very difficult to make it work smoothly,” says Dr. Gabor Forgacs, associate professor, Ted Rogers School of Hospitality and Tourism Management, Ryerson University.

In hotels with the size and class to offer room service, Forgacs cites the growing influence of asset managers looking to trim marginal operations as one of the biggest dangers for the program. Previously, if an operation made enough in catering and banquet to cover losses in room service, the F&B division was left alone if budget was met.  Not anymore. Room service now needs to stand on its merit, says Forgacs.

“Room service still has a value add in certain hotels but if a given hotel doesn’t cater to the high end of the affluent segment with timely and courteous service, even for unconventional requests, they will struggle to keep the lights on,” says Forgacs.

Grab-and-go markets

The 120-room Holiday Inn and Suites Mississauga made a wise decision to add a grab-and-go market to their lobby last year. The 12-year-old hotel was renovating their restaurant and added the quick market because many coffee shops and small stores had opened around the hotel and were drawing away guests for food purchases.

“We thought if we could keep that coffee and snack business without increasing labour, why not? Our weekly corporate clients told us they couldn’t wait till the Marketplace opened,” said general manager Ash Constantine. “Only 50 per cent of them were dining in our restaurant, while the rest were running out to coffee shops, etc. to grab quick snacks.”

The unnamed shop, referred to as the Marketplace, offers Starbucks coffee, frozen dinners, muffins, pastries, snacks and sundries. Also microwaveable brand names such as Mr. Noodles and Kraft Dinner, says Constantine. The on-site restaurant (Motivity Café and Lounge) serves Mother Tuckers coffee as per the IHG brand standard.

The common expression we hear now is, “Charge this to my room!” says Constantine.

While guests previously might order pizza from their room, now they come down in pyjamas and slippers to the Marketplace for frozen dinners and stop at the front desk to chat. The positives also extend to the bottom line, says Constantine, with the Marketplace adding between 10 and 15 per cent to F&B. Coffee, muffins and pastries have at least a 70 per cent markup while other items are closer to 40 per cent.

“It’s a niche market that’s not taking away from our restaurant. If anything, we’ve added sales to the Motivity Café because many guests now get something from the Marketplace after dinner to take up to their room,” he explains.

Steve Giblin, president and CEO of SilverBirch Hotels & Resorts with 20 properties in Canada, likes to have a grab-and-go market on property where possible. In the new DoubleTrees in Regina and West Edmonton, the market was added to the lobby.

“We train our people to tell the customer when they come in and want something quick to eat, ‘Let me go get that for you,’ even if it’s late at night and the kitchen is closed.” says Giblin. “People love options.”

The 201-suite Residence Inn by Marriott Vancouver Downtown is owned and operated by SilverBirch. General manager Suzanne Allemeier says the market next to the front desk is steadily busy.

“Our biggest sellers are potato chips, pretzels, etc. and water. One other option is grocery service,” says Allemeier. “We have a welcome basket in the room with a bag of popcorn, a message from the manager and a grocery list with preprinted essentials. Bring the list to the front desk in the morning and we’ll have the groceries delivered and put away by the end of the business day at no charge beyond the grocery cost. The guest chooses the store.”

Revenue streams

There’s no question that, if run properly, food and beverage can be a great revenue source. Hood of Atlific Hotels says grab-and-go markets are great revenue-generating centres.

“Full service hotels have let themselves down. Guests can order from the menu but ask for a bag of chips and they have to leave to look for a convenience store. We’re getting rid of vending machines in favour of grab-and-go because people don’t carry cash anymore and the machines can be empty late at night if they’re serviced by a third party,” says Hood.

“We capture 10 to 20 per cent of room service business through the iPad and that number is growing. Room service accounts for five per cent of our total F&B budget,” says Marc Dorfman of the Four Seasons Toronto, though he notes that room service is not a big part of the hotel’s business since most guests “enjoy going downstairs to dine.”

Moustafa ElGayar of Shangri-La Hotel Vancouver says a good room service menu needs variety in terms of comfort food, hotel signature dishes, dietary restrictions, creativity and value to be a large contributor to F&B revenue. The biggest contributor is usually the hotel’s signature restaurant or banquet operations, which combined can account for almost 70 per cent of F&B revenue. Bar revenue can contribute up to 20 per cent, especially if the bar concept is innovative. In-room dining comes next with about 10 per cent of total F&B revenue, he says.

Dan Young, public relations manager, Starwood Hotels & Resorts, says that less than two years after the debut of the Sheraton Social Hour, which offers guests a specially curated menu of premium wines and weekly tasting events, results have exceeded expectations. Participating hotels have higher bar RevPAR, better year-over-year performance in bar and F&B RevPAR, and saw an average 20 per cent increase in year-over-year beverage revenue at the lobby bar. For example, the Sheraton Kansas City’s wine sales increased 43 per cent in the bar and lounge, Sheraton Seattle saw a 39 per cent sales increase, and The Sheraton New York Times Square’s bar revenue is up 20 per cent since introducing the program.

Steve Giblin of SilverBirch Hotels & Resorts says his properties with a good mix of meeting and catering space and a restaurant/bar operation can get as high as 40 per cent margin with F&B. The DoubleTree West Edmonton, with a dinner theatre as well, has even higher profits.

“Local markets are important but when competing against local restaurants it’s critically important for us to provide what meets the customers’ needs. With the recently opened Wild Sage Kitchen & Bar at the DoubleTree in Regina, for example, a guest can have a small plate and glass of wine or a meal or come in with a group and have a couple of pizzas while watching the game. You have to have all those options now,” explains Giblin.

“In my opinion, the hotel business has lost a significant amount of revenue potential mainly because we weren’t competent in F&B. Products were overpriced and service was slow. And we didn’t keep up with food and beverage trends throughout the world,” he says. “I’m a big believer in looking outside the hotel industry to see where we need to go.”