My first job out of hotel school was at the Ritz Carlton, the “Grand Dame” of Boston hotels. It had enjoyed that label for many years due to its Old-World charm and unique collection of food and beverage outlets: a proper wood-paneled lobby bar, an exquisite tea lounge, a rooftop super club and a fine dining restaurant.
After moving on to other career pursuits, I occasionally checked in on the hotel and found over time that each cherished venue had shuttered one by one. What the older generation of Ritz guests once considered charming, newer generations considered boring and irrelevant. This same trend away from hotel food and beverage was happening across the country and hotel owners and managers minimized their F&B offerings quickly and without emotion.
Hotels started to focus more on improving guest’s rooms with better showers, higher thread count linens and bedside light dimming systems. And while these were all great improvements in guest experience, they have now become standard.
How does a hotel differentiate itself from competition when the comp set also has a great room? And more importantly, how does a hotel attract the newer generation of hotel guests who take for granted that properly amenitized room, but have a new level of expectation in order to win their loyalty? The answer is, they want experiences.
It’s time to go back to the roots of true hospitality and provide not only a good room, but also the experiences and memories that a great hotel food and beverage program can provide.
We all know F&B is a hard business, and especially layered into the complexity of a hotel, it can seem daunting. Not to mention that hiring staff in any hospitality business is tough these days. Why double down and create even more hiring needs by leaning into a hotel F&B program? I argue that you can’t afford not to if you want to capture the next generation of hotel guest.
We’ve all seen the data. Younger generations want to spend their money less on things and more on experiences. Travel is at the top of that list and hotels are a key component to filling that desire. They don’t just want to experience a great hotel, they want their social circle to see it vicariously through their social media posts. And sure, they might post one picture of their guestroom and another couple of shots of the lobby or pool, but what they will post in vast quantities are the pictures from the restaurants and bars because these pictures capture energy and an experience.
Many hotel companies have reduced their in-house F&B teams over the years and now find themselves in the position of needing to bring in outside operators to create that experience and generate buzz. Independent companies 100% devoted to F&B have developed specific knowhow and have teams of experts. They’ve mastered that “secret sauce” that you sense immediately in a good restaurant or bar. But bringing in an outside operator can be risky and expensive proposition. If you go down that path, how do you increase your chances of a successful outcome?
When I advise hotel clients through that process, I like to give them three key pieces of advice:
- Collaboration is key: I’ve been through dozens of negotiations between hotels and operators and I’ve noticed a common theme: finding a group with a strong track record and point of view is very desirable. They know how to pull together a coherent concept and operate with confidence, leaving the hotel manager to focus on the other aspects of the hotel. However, if that translates into the F&B operator having an ego and an unwillingness to change or collaborate, you’re in for a difficult marriage. This crucial trait will almost always show up within the dealmaking/negotiating phase. If they seem unreasonable during negotiations, then it’s almost a certainty that you’ll have issues once they are operating within your property. Know when to walk away from that deal no matter how enticing it might seem to have them associated with your hotel.
- Go big or go home: F&B venues can be expensive to build out and have a high-performance risk. This can lead to thinking you’re better off minimizing the amount of F&B space within your property. However, if you’re only offering that outside operator a small venue, you’re going to diminish the quality of the operators you’re willing to attract. More F&B revenues equal more fees, which equals a better talent pool. Explore those unused basement spaces for a speakeasy. Is there a rooftop that could be a great seasonal bar? Get creative and you might find the pieces to put together a more robust opportunity while giving your guests more to experience.
- Incentivize properly: Make sure the operator is truly aligned with your goals for financial success. And, most importantly, make sure the associated incentives are achievable. Lofty incentive goals that have a slim chance of ever being met tend to result in an operator losing the desire to even try. They’ll focus their energies on another property where they have a real chance to make that extra money.
Leaning into offering a robust F&B program can be a daunting task, but if done properly, it will set your property apart from your comp set and increase your bottom line.
And by the way, the last time I checked back in on the former Ritz in Boston (now operating under a new flag), the new owners resurrected that abandoned rooftop by bringing in a fantastic outside operating group that has turned it into one of the most sought after reservations in the city; giving a new generation a reason to love an aging, but newly relevant, Grande Dame.
Peter Peterson is president/managing partner of Cultivate Hospitality.
This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.