Mr. Escoffier

Food & Beverage

Hotel Foodservice: Trends that Define our Direction

By Marcel Escoffier, Associate Professor, FIU School of Hospitality Management

The lodging industry is in a financial situation it hasn't seen since the late 1980's. Pundants will point to over building, but my feeling is that the over building is a result of a sudden shift in the customer base, not simply to the construction of too many hotels. Post September 11, there was an across the board cessation of travel in general. Since then, travel is returning to near pre-2001 levels; but the mix of travelers has changed. Let's get real and say it; the business market is what's changed. For years the industry has made a handy profit off of business people; they travel for sales meetings, conventions, and for training and development. But a closer analysis of the market shows that these are three very different purposes. Columnists have written about the trend among business travelers toward downgrading their hotel bookings and being on tighter budgets (implying that there will be fewer steaks and more pizzas sold.) But what I see as the major long term change is the near demise of the small meetings market, especially the staff training and development area. The large CPA firms have almost totally stopped such activities. One firm I deal with now does by teleconferencing training what it used to do through $60 million a year in hotel-centered meetings. Not a good trend. We hotel food people make what little profits we have off of the banquet/catering business, so the real profit center of our operation is in deep trouble.

Competitive pressure on this aspect of foodservice have been increasing for several years. Independent caterers have done what our sales departments should have been doing and locked up a lot of the local meeting market. Our school will be hosting a meeting of the Concessionaires association; people who run the foodservice at the stadiums, arenas, and convention centers. They see the local meeting market as a plum ripe for their picking. Another pressure on the meetings business is that, given the slow economy, some companies simply go out to the deli and self-cater their meetings. The lodging industry needs to place a lot more emphasis on competing for the business that remains and building new business.

The lodging industry offers unique advantages over private catering companies, concessionaire-operated venues, and in-office meeting spaces. Mostly, the advantage is that hotels offer a site not too far away from the company, but far enough away that a real meeting can be done without interruptions. Near, yet just far enough away to get work done. An ideal combination that only local concessionaries can match. Obviously, we can compete favorably against the stadiums because almost invariably food found in the lodging industry is better!

Florida International University's School of Hospitality Management is located in the heart of one of the biggest tourist destinations in the United States. There are over 250 hotels, inns, and resorts on Miami Beach, and probably an equal number throughout the rest of the county. Most have meeting rooms that can accommodate small groups, some, like the famous Fontainebleau Hilton have convention facilities that could rival those found in many entire cities. Yet, I'd guess (this is an informed guess, but no actual study has ever been done) that at least 75% of the businesses in town have never been contacted by someone from the banquet / catering department of any hotel concerning the idea of holding meetings at a hotel property. How many local businesses has your hotel talked with in the past year?

Another market we seem to be failing is the business market made up of the traditional "traveling salesman." These guys have been hit hard by the recent recession; sales are down, their bosses are on their back to reduce travel costs, and they have the post-911 airport delays to deal with. Can't we help these people? First, we need to offer them discounted room rates. If they walk, they may be lost to our hotel forever. Second, we need to make up some of that discount by getting them to spend more in our foodservice facilities. Ever heard of coupons? If those pizza guys can use coupons, why can't you? How about giving them at check-in a free drink coupon for each day of their stay? What about a nice after dinner drink or appetizer coupon? Don't forget at check-in scheduling a box lunch for them to take with them on that flight home. Many airlines have reduced foodservice, all have reduced the quality of what they serve. Merchandising - the act of selling more to customers who have already chosen your establishment, was also neglected during the economic boom. Remember that if you can get your guests to spend $10 more a night on food and beverages, you have gone a long way toward offsetting that discount in the room rate.

A recent trend that I wish would not have happened was the weird way some hotels have reacted to the drop in occupancy. I chose the word; "weird" because the decisions made have sometimes run counter to common sense. First, I have noticed that some hotels have laid off their most senior people. This loss of the hotel's knowledge base has resulted in a lot of very nice people who are clueless staffing the place. I experienced this first hand while attending a meeting in Orlando last month. The people were all eager to be of help, but they didn't know the first thing about hotels! I counted 13 service errors from check-in to "lights out" that first day. A second "weird" trend was in laying off a lot people rather than reducing everyone's hours. I met a bellman in Daytona Beach how had just worked a sixteen hour shift. Please, get real here. While in Daytona I did see one positive trend, and that was the two hotels, side-by-side who had opened their dining rooms on alternate evenings; the guests of hotel "A" eating in hotel "B" every other night and vice versa. A bit of creativity using that old idea that, "half a loaf is better than none."

This brings up the idea of cost reduction through reorganization. Recent trends have been toward the consolidation of foodservice outlets, kitchens, and other facilities. While I am painfully aware of the difficulties of getting various departments to give up their power, it seems like now is an excellent opportunity to re-organize how we get things done. Even the unions understand the seriousness of the current events and in many cases have expressed a willingness to work with management in redefining job descriptions. Do it now, before this opportunity is lost until the next downturn!

Finally, a word about the term: "Downturn". This New Year's Eve demonstrated that people have been "down" long enough. If you make one New Years resolution, please make it that you will inject a little fun and excitement into your place. The lodging industry often equates stodginess and formality with luxury. Believe me, the wealthy international set parties just as hearty on South Beach as does anyone else. Think about how you could cater a few guest appreciation events in the lobby or elsewhere. I've found that many guests go outside the hotel because nothing is happening inside the place. With the suggestion that a little attention to revitalizing our business through a liberal dose of good food and drink is what this country needs, I will close this column. Please, if you want to discuss my ideas, have ideas of your own you would like me to address, disagree with what I have written, or just want to have a sympathetic ear to listen to your troubles, email me at escoffm@fiu.edu I hope this column gives you pause for thought, maybe stirred your blood, and gave you a chuckle or two.

Marcel R. Escoffier was an Associate Professor at the School of Hospitality Management Florida International University. He had over thirty years experience in hotels and restaurants throughout the U.S. Unfortunately, Mr. Escoffier passed away in September, 2009. We at HotelExecutive.com would like to continue publishing Marcel's articles on our website as a tribute to this brilliant man. The one thing we loved most about him most was his sense of humor. He would always make light of any serious situation, and this was reflected often in the articles he wrote for the Hotel Business Review. Mr. Escoffier can be contacted at editor@hotelexecutive.com Extended Bio...

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