Hoteliers turn to revenue management to cut F&B costs
Hoteliers turn to revenue management to cut F&B costs
05 JULY 2019 7:34 AM

Strategies for cutting costs in hotel food and beverage range from consolidating staff to scaling back roomservice to buying food more strategically.

REPORT FROM THE U.S.—Hoteliers are finding ways to trim food-and-beverage costs while still providing consistent, high-quality meal experiences for transient and group guests.

Such cost-cutting strategies include more efficiently staffing restaurants, revamping roomservice and banquet meals, and buying cheaper ingredients.

Cost control in hotel F&B comes as labor-related costs represent the greatest share of direct operating expenses in the hotel industry, especially within the F&B department. In 2016, the combined cost of salaries, wages, bonuses and employee benefits accounted for 52% of total department expenses according to CBRE Hotels' Americas Research.

According to a recent survey conducted by the NYC Hospitality Alliance, 75% of restaurant respondents in New York City said they had planned to reduce employee hours in 2019 as a result of mandated wage increases. Hoteliers are also increasingly turning to technology to eliminate labor by installing self-ordering kiosks and developing apps, said NYC Hospitality Alliance Executive Director Andrew Rigie.

Optimizing menus for profitability and keeping tight control of F&B costs is also a must. A total of 60% of respondents to the NYC Hospitality Alliance survey reported that they will rework their F&B menus to reduce costs.

Greg Griffie, SVP of food and beverage for Davidson Hotels & Resorts, said knowing a hotel’s guests can help control hotel F&B costs.

“You ultimately need to understand your market, your customer, and your demographics to better help control costs,” Griffie said. “Applying revenue management to F&B is important in helping you maximize when you need to staff your restaurant and when you need to drive business to your restaurant.”

Reduce waste
Davidson Hotels works with two outside companies that use artificial intelligence to document what food products are going into the trash and not being eaten, Griffie said. The studies of the company’s food waste found that in banquets and catering, guests are eating less pasta, rice and potatoes, which could be a sign more people are gravitating to keto and gluten-free diets.

Dean Wendel, VP of food and beverage at Concord Hospitality Enterprises, said his company is also using an automated program to help reduce food waste. This program photographs all the food waste that is discarded. Using AI, it is able to identify particular foods and calculate the value of what is being thrown out.

“Food waste is a big issue in America and the world, so we are interested in possibly partnering with them or another similar solution to see how we can address this,” Wendel said. “We believe that a strong focus on this will not only be a more responsible approach to food service but will help to reduce our waste by as much as 20% to 30% and help in reducing food cost without impacting the guest.”

Consolidate staff
Concord has some hotels that combine the food-and-beverage director position along with the executive chef role, Wendel said. Morning cooks are also trained to set up and run the midday line as well.

“We must get out of the 7 a.m. to 3 p.m. and 3 p.m. to 11 p.m. mindset and put staff where they are needed when they are needed,” Wendel said.

Vikram Sood, SVP of operations for RAR Hospitality, said his company manages the Lafayette Hotel in San Diego, where the chef is the front-of-the-house manager on certain shifts for the 15 employees in the restaurant.

Cheaper, high-quality ingredients
Dean Thompson, corporate director of culinary operations at Concord, said his company has found cheaper food suppliers without sacrificing quality ingredients.

“At Concord, we are trying to promote chicken dishes, less-expensive cuts of meat and fish and creative vegetarian dishes by designing menus to highlight those items—and oftentimes they are the chef’s best dishes,” Thompson said. “You will rarely see Concord post on social media an expensive cut of meat; we usually promote the creative, cost-effective menu item or feature in hopes of garnering interest in guests ordering those.”

Serving cuts of meat like skirt steak and flank steak is still tasty and saves money, versus cuts like filet mignon or a prime strip, Sood said. Also, developing smaller, more focused menus that change seasonally can save on cost. Buying locally for items like bread and beer from local craft breweries has saved RAR Hospitality money as well.

Another area of cost-cutting that has saved the 334-room Radisson Blu Aqua Hotel in Chicago between 16% and 18% on F&B spending is preparing menu items from scratch rather than buying pre-made foods, said Hotel Manager Charleston Gray.

"Items like soup and desserts, for example, are handmade from scratch," Gray said. "The quality is so much better and this makes sense, cost-wise."

Revamp roomservice
Hoteliers industrywide have scaled back roomservice in order to cut costs and enhance efficiency. At the Radisson Blu Aqua Hotel, roomservice has been offered for the past six months in a grab-and-go format, rather than the more traditional fine china on a tray or cart model, Gray said. The menu options are also scaled back about 60%. This has saved between 25% and 35% on roomservice costs and still provides guests with enough different selections from the roomservice menu.

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