The Buffet A La Carte Balance in Hotel Restaurants
Are You Leveraging the Delicate Balance in Your Hotel Restaurants?
By S. Lakshmi Narasimhan Founder, Ignite Insight LLC | September 11, 2016
As someone who has poured money into a restaurant as an investment vehicle, the owner is looking at a good return on that investment. Restaurant profits cannot match rooms accommodation profits and in most cases tend to be between one third to one half of rooms profits. It is thus critical that the restaurant product is well thought out and harnesses resident hotel guest patronage complemented by non-residents. A well balanced buffet and a la carte offerings in the hotel restaurant will go a long way in delivering that patronage factor as well as producing that return on investment the owner is seeking. A win win situation that owners and stake holders hold dear to their hearts.
Restaurant operations generically owe their sustenance in revenues and profits to the delicate balance between buffet setups (harnessing the power of the bundling strategy) and regular a la carte menus. That buffets are far more profitable than a la carte menus is indisputable, however, having a slick balance between the two is the trick to maintaining consistent revenue streams and profitability. An analysis of this tandem strategy.
The Buffet Philosophy
Buffets play a huge part in the sales mix offering in a food and beverage operation. A buffet spread is a high contribution margin item while at the same time delivering extra advantages like the lesser need to serve the customer (it is self-service), lesser staff deployment other than for replenishing the buffet (leading to lesser labor costs) and so forth. And of course the supreme benefit to the guest is that they can pick and choose from the spread. In particular, breakfast and lunch buffets provide busy executives strapped for time a facility to quickly complete a meal and get back to work. It is a win-win situation.
In fact, meal periods and their diverse offerings of breakfast, lunch and dinner at various price and profit points and often in a combination of buffet and a la carte menu items are classic examples of a powerful sales mix at work.
A La Carte Revenue Contribution