I am the In-Room Dining Manager of a large hotel. Our In-Room Dining sales have really dropped over the last year. Our service scores are also suffering. Where do a start?
Great question! Many hotels are reporting a drastic decrease in F&B sales per occupied room. The In-Room Dining sales have taken the biggest hit during these tough times. Guests are really cutting back on the more expensive amenities of the hotels and room service is usually at the top. Here are our recommendations:
1. Revisit your menu and specifically your menu prices. Many hotels dramatically increased their room service menu prices over the restaurant prices. We recommend that the prices are similar, especially if your hotel is near many other restaurants… especially if they are within walking distance. Guests typically look at the room service prices and assume they are the same as in the restaurant. If a guest feels they are too high, you have lost them as a customer in both room service and the restaurant. Guests will grab breakfast from a quick mart and eat dinner at the restaurant next door.
Are rising food costs decreasing your restaurant’s profits? You better act now! We anticipate the cost of food, especially the staples, to continue to rise. Food and Beverage Departments for hotels are typically low-profit areas and can easily turn into no-profit areas if you do not react quickly. Here are some things that you can do:
Know Your Food Costs – It is surprising how little hotels actually know about their food costs. Most hotels have a breakfast buffet, however, few hotels have any idea what their food cost is on the buffet. Most just assume they are making a high profit because they were taught that buffets were always high profit. Not true. Spend the time to calculate your buffet cost. You may be surprised to find out that your buffet food cost is 40 or 50 percent!
Here is a simple way to find out the food cost for your buffet: Have the kitchen log every single item that is used on the buffet during a 7 day period (10 cases of bacon, 22 cases of eggs, etc). At the end of the week, add up the total food expense and divide it by the amount of revenue you posted for those days. Be sure to do it for a whole week because you will find that your weekend food cost is very different than your weekday food cost. Also, be sure to add in all items included with the buffet such as juice and coffee.
Re-engineer Your Menu – Hopefully, you are using a spreadsheet or computer program to monitor your menu engineering. Be sure to re-evaluate your menu every single month. For additional menu engineering help, check out this article.
Evaluate your menu prices – Now that you know your food cost and your menu engineering, be sure to evaluate your menu prices. You will most likely have to raise prices. However, don’t just raise all of the prices across the board, be very strategic. Raise only the prices of the items that are the best sellers but do not have the best profit. Keep the prices the same on the items that do not sell well but have a high profit. Replace the items that do not sell well and do not have a high profit.