Modifying Your F&B Offerings to Meet the Demands of Today's Cost Conscious Diner

By Menze Heroian Vice President, Tishman Hotels & Realty | November 06, 2011

What do you do when you own or operate a restaurant which has a menu which is no longer valid in today's economic market, a market which over the past three years has reflected a dramatic shift from lavish dining covered by expense accounts, consumption of expensive bottles of wine and thirty day demands for prime time dinner reservations? In this article I will provide an example of how Shula's Steak House located in the Sheraton Chicago Hotel & Towers modified its offerings to meet the demands of this emerging trend of the cost conscious, value oriented customers looking for the same quality experience for a more economical price.

After the housing crash of September 2008 the impact on business at this high end restaurant located in the heart of downtown Chicago was immediate. Covers went down, as did average check, premium wine sales and corporate dining. Within months, the aftermath of the crisis in lost business was evident as was the realization that this was not an issue which was going to go away any time soon.

There is good news which was recently printed in an article by Restaurant News that there are indications that high end steak houses are making resurgence, especially in Chicago, but it will take some time to get back to the pre-crisis years. The options left on the table for operators were to wait for the economy to come back or to be creative and do what many hotel-based food service programs are looking at, ways to build and capitalize on current and emerging trends to attract new guests and add value to their overall experience.

The opportunity in this particular situation at Shula's , Chicago was to find a way to capture this new market of cost conscious diners without compromising the integrity of the Shula's brand. Business in the dining room was down as was the group dining segment. The one area in the restaurant which was showing positive results was the lounge and bar. There was a noticeable influx of customers sitting at the bar and the lounge and ordering off the bar menu which offered more casual fare at a lower price point.

The focus, therefore, was to capitalize on this positive shift of business to the bar and lounge. The menu and pricing seemed to coincide with the emerging trends which I have described above. The goal going forward was to capitalize on this new found market and create a "restaurant within a restaurant."

The process to achieve this goal is broken down into five components which are to: 1) Create separate revenue centers for the bar/ lounge in order to track and differentiate revenues between the main dining room and the bar/lounge, 2) develop and expand on the bar menu utilizing the resources of the Shula's Corporate 3) expand and capitalize on the football theme of the restaurant brand as an entertainment venue, 4) modify the floor plan and tabletop presentation of the lounge area to create a less formal but inviting casual atmosphere and 5) create a marketing plan which provided exposure to the concept of a "restaurant within a restaurant."

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Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.