The restaurant at your hotel can generate a substantial revenue stream. Thanks to their restaurants, the hotels in the US generated a revenue of $36.1 billion in 2017. When utilized smartly, your restaurant can increase the value of each one of your guests, even if they only stay for one night. The only problem with optimizing hotel restaurant performance is that there are so many tactics.
They range from offering personalized menus to introducing seasonal specialties. How do you know which is the best tactic? Which one promises the best results? These are not some questions you can answer looking into your experience or base answers on your hunch. You need data!
Below you will be able to find out how to increase revenue in your hotel restaurant, including real-world examples of hotels that successfully managed to do this.
📋 Table of Contents
1: Standardize Food and Beverage Revenue Management
Fairmont Raffles Hotels International
You would be surprised how many hotel restaurants operate without a revenue management strategy. Managers use ad hoc strategies and tactics and assess their credibility by looking into short-term results. That’s why Fairmont Raffles Hotels International decided to standardize a revenue management program for its restaurants and implement it as a system-wide solution.
They first started with an analysis of base data. To discover the opportunities for increasing revenue, hotel managers decided to implement a 5-step revenue management process. The restaurant staff was included in the program development to ensure the viability of strategies.
After a thorough analysis, they’ve found out that all strategies can be grouped into three categories:
- All-purpose strategies.
- Strategies to use when a restaurant is busy.
- Strategies to use when a restaurant is not busy.
🏆 Results
One year after implementing standardized revenue management and new strategies, the hotel restaurant generated five times more revenue growth than the hotel restaurants without such a program.
2: Staff Training
International Hotel Company
When hotels undergo internal restructuring, things can go slightly out of hand, especially in business areas such as food and beverage operations. Instead of generating profits, hotel restaurants can cause a substantial cash drain, putting the entire operation at risk. How do you turn the tides? The best thing to do is turn to your restaurant staff and revisit operations, procedures, and operating templates.
Due to the scope of operation, the hotel chain had to look for uniform solutions. First, they improved the operations related to food maintenance. They followed that up by outsourcing food and beverage operations to local restaurants. Finally, and most importantly, they organized staff training.
🏆 Results
The restaurant staff was introduced to operating procedures and templates. This enabled the team to understand better the role of the restaurant within the hotel’s ecosystem. After these changes, the hotel managed to make the restaurant a success again. Instead of generating losses, it became a profitable venue.
3: Outsource Management to a 3rd Party
Glenn Hotel
Successfully running and managing hotel operations is not easy. Add a restaurant to all that, and you can potentially get overwhelmed. Instead of draining your last ounce of energy trying to improve something again and again only to see it fail, why not outsource it to someone who has the necessary expertise to manage this task? This is what managers at Glenn Hotel decided to do.
Glen Hotel has two food and beverage operations on-premises – Glenn’s Kitchen, a restaurant at the hotel’s ground level, and SkyLounge, which serves as event space and a rooftop bar. The hotel management decided to outsource both of these operations.
🏆 Results
A 3rd party came in and introduced some exciting changes. They created a new F&B concept from scratch to cater to the preferences of both hotel guests and local clientele. They also improved food quality and service level. The results? The revenue went up by $255,000 in the first nine months post-takeover, while the expenses went down by 17%.
4: New Reservation System
Fire & Vine Hospitality
Marketing your F&B operation can be inefficient when you are using an obsolete reservation system. It can become a real problem to chain hotels because loyal guests can easily get denied service in other locations because they are nothing but strangers there. That’s exactly what was going on in the hotels operated by Fire & Vine Hospitality.
They needed a better reservation system that would allow them to track, record, and store guest data. After all, 1 in 5 guests who use F&B services provided by Fire & Vine Hospitality are repeat guests. Ensuring that host stands across venues recognize repeat guests is paramount for the next-level guest experience.
🏆 Results
After implementing a robust and modern reservation system, the hotel experienced significant improvements. After five years, the hotel restaurant had pocketed $1.5 million extra revenue thanks to this improvement. They say it was primarily due to identifying and capturing revenue opportunities through data.
5: Pre-Arrival Room Upgrades System
Orchid Hotels
Sometimes a hotel can’t do much to increase revenue in the restaurant. The operation is well-optimized, staff well-trained, and they provide F&B that are high quality. Yet, hotel revenue doesn’t line up with ADR and occupancy rate. What option do these hotels have then? You can try to step up your upsell game, but you need cutting-edge tech to do it in a way that’s modern and less intrusive.
Orchid Hotels solved this issue with UpStay. They implemented UpStay to make it easy for their guests to buy pre-arrival upgrades. For instance, with one click of a button, they can upgrade to a bed and breakfast, half board, or a full board before they even go through the hotel’s front door.
🏆 Results
UpStay was easy to integrate as it supports integration with all popular property management systems, booking engines, and channel managers. Finally, Orchid Hotel was able to convert up to 20% of their guests to buy F&B services at their hotel.
As you can see, there are plenty of ways to increase revenue in your hotel restaurant that are far more creative than simply aiming to increase profit margin. These real-world examples are there to inspire you and get you on the right track.
Graduated from Standford University, Arielle has over 5 years of experience in the Hospitality industry. She holds an MBA in business administration from the IDC Herzliya, Israel. She currently works as Account Manager at UpStay, building and maintaining strong, long-lasting customer relationships. She is deeply passionate about helping hoteliers unlock significant new revenue streams from unsold premium inventory.
