HOTEL BUSINESS REVIEW
OCTOBER FOCUS: Hotel Revenue Management

Your Hotel's Breakfast Service Should Not Be An Afterthought

By Andrea Stokes Practice Lead, Hospitality, J.D. Power | October 2022

What a difference a year makes!

In this publication last year, I wrote about which pandemic-related changes to hotel F&B operations might "stick" given ongoing shifts not only in food service and supply, but also in traveler expectations.

Guest satisfaction with hotel F&B had declined in 2021 vs. 2020, particularly in the Upper Midscale segment, primarily due to declines in breakfast menu variety and food quality-both of which were lacking due to the shutdown of complimentary self-serve breakfast programs.

Twelve months on, we are now in an environment of higher costs, higher travel demand, and recovering revenues that the industry may have underestimated. While the effects of the pandemic are still being felt by hoteliers, hotel breakfast service is back (generally), and menu variety is also (sort of). Yet many hoteliers are continuing to face supply challenges and are unable to procure higher-quality food items they want to serve guests.

Also, many hoteliers are unable to absorb the expense of higher quality food due to inflation. In an inflationary environment when both food-and the people to prepare it-are costing owners and operators substantially more, should food quality and variety be a necessary trade-off to keep expenses down? Due to the outsized impact hotel F&B has on guests' satisfaction with the stay experience, this writing will set out to prove the answer is resoundingly "no."

After gathering feedback on real hotel stays from over 34,000 guests, the 2022 J.D. Power North American Hotel Guest Satisfaction Study reveals the "state of the hotel guest" and how well hotel brands are delivering against guest expectations. In regard to hotel F&B, this year's Study results continue to show the importance of breakfast to guest satisfaction in limited service hotel segments. Not surprisingly, over 70% of J.D. Power's F&B satisfaction score in the Upper Midscale and Midscale segments is driven by breakfast satisfaction.

Study results show that three out of four (74%) branded hotel guests in Upper Midscale experienced hotel-provided breakfast during their stay. The same is true for the majority (70%) of Midscale branded hotel guests. Yet guest satisfaction with hotel breakfast overall is still down compared to 2019. Satisfaction ratings for menu variety and for quality/taste continue to be lower than ratings for service-related aspects such as courtesy of breakfast staff and cleanliness of breakfast areas.

In addition, the Study reveals that half of Upper Midscale (50%), and Midscale (46%) guests say that complimentary breakfast is a "need-to-have" feature of their hotel stays. These proportions, significantly higher compared to other hotel segments, were unchanged during the pandemic when breakfast offerings were reduced or eliminated. Limited service guests that partake in hotel breakfast, complimentary or not, have more positive perceptions of overall stay cost and value for money compared to those that do not.

For example, Study data shows a significant difference in the J.D. Power score for limited service overall hotel cost satisfaction when comparing hotel breakfast users (score of 810) to non-users (score of 762). Also, when limited service guests are delighted with food quality (a rating of 10 out of 10), cost satisfaction is even higher (score of 935). It is clear that breakfast in limited service hotels has the power to positively impact guest perceptions of their overall stay.

Also, the Study provides a helpful profile of limited service hotel guests who typically use breakfast service. These guests are more likely to be staying with their children and/or staying with other family members or friends compared to those not experiencing breakfast. Very few are solo guests. In addition, Study data shows that half of breakfast users are staying at your property for the first time. Offering higher quality food and beverage is a great way to delight these guests. Make your breakfast offering memorable, and first-time guests will be more likely to return to your hotel the next time they visit the area. Lastly, the Study data shows that guests using breakfast service are more likely to be staying longer than 2 nights. They are going to be looking for a good variety of breakfast items because they are staying multiple days. If variety is lacking, guests on longer stays will notice.

Thus, limited service hotel owners and operators should have a formal breakfast strategy, and many do. Merriam-Webster defines strategy simply as "the art of devising or employing plans or stratagems toward a goal." If higher guest satisfaction is the goal, a carefully planned breakfast program will differentiate the limited service hotel stay experience from competitors. While some investment may be required, any increase in food expenses may be recouped through slightly higher rates. A poor-quality breakfast combined with higher rates will only serve to disappoint guests who, in the current inflationary environment, are hyper-sensitive to anything that feels like "a rip-off." Simply put, guests want to feel that they are getting good value in return for the higher room rates they are paying.

For limited service hotels, what should a well-defined breakfast strategy include? First, review brand standards to see where you might be able to offer higher-quality food items and beverages. Most franchisors' breakfast standards outline the minimum franchisees can offer while allowing for additional F&B items to serve the local market and your property's typical guest profile. Thus, analysis of your guests is the next step in breakfast strategy development. (Note: If your PMS does not provide guest data in easy-to-analyze dashboards, it is time to consider one that does.)

For example, if weekday business travelers generate the majority of your revenue, your breakfast plan should have them in mind. In this case, it would not be wise to skimp on coffee service. High-quality coffee and high-quality coffee service items, along with specialty coffee drinks available for purchase, will go along way with business travelers. In addition, once you understand the guests coming through your doors, find ways to gather their feedback on your breakfast service. Do not rely solely on guest surveys. On a daily basis, breakfast staff should take the time to greet guests and ask for specific feedback on food items and beverages.

Next, review the newest technologies in food heating and cooking equipment. Modernized equipment can help expand the breakfast options you are able to offer guests while reducing food preparation time for hotel staff. Now you have an opportunity to be creative with the menu plan. Rely on your food service vendor to help you be more creative in which F&B items to procure and to identify which suppliers offer better quality.

In addition, learn what new flavor trends might be popping up in the everyday food and grocery products consumers purchase and ask your suppliers about new and unique breakfast items. Consider costs, but also consider what types of food items will differentiate the guest experience and build guest loyalty. Calculate how much you could increase room rates to cover any increased F&B expenses. Especially in limited service hotels, guests should perceive your breakfast offerings to be worth the higher room rate they are paying. As mentioned above, when guests feel they are receiving good value for money, they are usually willing to pay a few dollars more.

Finally consider ways you can improve food and beverage presentation. Presentation is often the area in which franchisors allow franchisees the flexibility to diverge from brand standards. A review of trends in restaurant design and decor will be helpful here; for example, could the "farmhouse decor" trend be easily and inexpensively implemented in your breakfast area? Updating even minor details, such wall art and serving vessels, can give your breakfast area a cozier and more appealing atmosphere.

Although cleanliness and sanitization must always be top of mind, your breakfast area should not seem stark and unwelcoming. Do not forget to involve your staff members as they are a great source for new presentation ideas. Seeking staff input helps to build enthusiasm for any new preparation and serving tasks that your strategy will require.

As we emerge from the pandemic, changes in the consumer mindset can be to hoteliers' advantage. Two years without leisure trips is now driving consumer demand for experiences over "things." Your breakfast program is an opportunity to make a stay at your property a true experience for guests. A breakfast strategy that includes elevating the brand standards where possible, a good understanding of your typical guest profile, modernized equipment where needed, creativity in F&B procurement, and an elevated presentation concept does not have to be complex to implement.

Even small improvements in each of these areas can be enough to make your breakfast program stand out and reward you with higher revenues and happy guests. Creating a memorable breakfast experience at your hotel will require both imagination and resourcefulness, but the process will be well worth the effort.

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Holistic Well-Being: Trends in Health and Wellness Offerings at Boutique Hotels in 2024

By Jennifer Barnwell, President, Curator Hotel & Resorts Collection

The past few years have certainly affected our health and well-being. From somewhat constant concerns about being exposed to and catching COVID ourselves, or having it affect our family members, to long hours working from home offices and worry about childcare, the pandemic left many people feeling depleted and in desperate need of vacations that offer relaxation and recharge. Wellness tourism aims to reduce stress by focusing on mental, physical and, in some cases, emotional well-being. It’s a chance to power down and recharge. In the ever-evolving landscape of hospitality, boutique hotels are redefining luxury by prioritizing the holistic...

Transforming Sustainability Challenges Into Assets in the Hospitality Industry

By Fabio Zaniboni, Founder & Chief Vision Officer, BubblyNet

The hospitality industry is facing a pivotal moment where sustainability has evolved from a mere trend to a fundamental business requirement. As consumer preferences increasingly lean towards eco-friendly options and regulations around energy efficiency grow stricter, hotels are confronted with the challenge of adapting or risking a loss in market share. However, these challenges can be transformed into opportunities for innovation, guest satisfaction, and profitability. Today’s travelers, especially younger generations, are more conscious of their environmental impact. Research from Accenture reveals that 83% of 25- to 34-year-olds, highlighting a growing market demand for eco-friendly hospitality experiences. Similarly, a survey by...

What the Hotel Industry Can Learn from Liam Payne's Tragic Accident

By Kathleen Lin Hurtubise, CEO & Founder of AlohaHP, AlohaHP

The passing of Liam Payne at CasaSur Palmero Hotel in Buenos Aires, Argentina, on October 16, 2024, is a tragic example for the hospitality industry to ensure that the safety of their guests remains a top priority. Reports of Payne’s death say that the singer fell from a balcony with worries that fainting and substance use may have contributed to this awful situation. As authorities work to find out more about the details of this tragedy, it is imperative for the hospitality industry to pause and reflect to ensure leadership efforts are in place to protect those who depend on...

Death to the Comment Card: the Power of Social Communication

By Samantha Markiewicz, Vice President, Digital , Bread & Butter

In these times of fast-moving social media videos, messages, and reviews, hotels can experience fast shifts in their online health, and without a plan in place, hotel reviews can spiral and result in a loss of website traffic, bookings and revenue. These tips can help hoteliers of any team size, skill level or budget leverage one-to-one and one-to-many social communication opportunities for a more seamless, more helpful hospitality experience. Prepare a Community Response Library Guest complaints and comments on social happen instantly - and unlike the comment cards of the past -they are instantly public. This instant...

How AI is Shaping the Future of Hospitality and Driving Growth

By Filip Linek, CEO & Founder, Flae Robotics

According to the Hotel Tech Report, the market size and growth of AI technology implementation in the hospitality industry have evolved from a niche investment to a necessity for staying ahead in the industry. With hoteliers facing rising labor costs, volatile booking trends, and shifting guest expectations, AI has become a key component of modern hotel operations. The AI market in the hospitality sector is projected to grow more than 90 times over the next decade, from $90M to $8.12B (Future Market Insights), and mainstream adoption is predicted, with $1.2B in AI investments in travel & hospitality by 2026 (IndustryARC)....

Managing Hotel Labor Costs Today

By Kasia Russell, Senior Managing Director, Practice Leader, HVS

Managing labor costs in a hotel operation is crucial to maintaining a profitable business while delivering the service level that is commensurate with the scale of hotel. Finding this balance has been especially difficult in a post-COVID-19 environment, when inflationary challenges coupled with labor supply shortages have put further pressures on hotel operations. Labor is one of the most significant expenses a hotel faces, accounting for 30–45% of total operating costs. Managing these costs takes creativity, innovation, organization, and diligence. Adjustments must be carefully considered because making too many staffing cuts can lower profitability and negatively affect the...

Tech Trends: What's Next for Hospitality Workforce Management?

By Corey McCarthy, CMO, Unifocus

The hospitality industry is undergoing a tech-driven transformation that is reshaping hotel operations, workforce management, and guest experiences. As we approach 2025, leveraging the latest technological advancements isn’t just about staying current—it’s about connecting staff, operations, and ultimately the guest experience. Using tech to connect hotel operations with guest and staff experiences enhances operational efficiency, boosts employee satisfaction, and drives significant ROI, positioning hoteliers as market leaders. According to a report by McKinsey, hotels that invest in technology are better positioned to respond to market challenges like soaring labor costs and evolving guest needs, leading to increased revenue and competitive...

HOTEL BUSINESS REVIEW OCTOBER FOCUS: Hotel Revenue Management

Your Hotel's Breakfast Service Should Not Be An Afterthought

By Andrea Stokes Practice Lead, Hospitality, J.D. Power | October 2022

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HOTEL BUSINESS REVIEW
OCTOBER FOCUS: Hotel Revenue Management