Hoteliers' historical focus on room revenue has led to them lagging behind independent restaurateurs when it comes to F&B, but greater ownership of concepts and creativity can lead to success, agreed a group of experts.
Speaking at a panel discussion titled F&B Strategy at The Hotel Show's Middle East Hospitality Leadership Forum, a group of hoteliers and restaurateurs debated the question of whether hoteliers can do F&B - successfully.
Fairmont Ajman general manager Francis Desjardins said that it comes down to the leadership of the hotel as well. "We were [historically] focused on the rooms' revenue of the hotel. It used to be said that rooms have high profitability, and F&B did not have the same. But realistically, hotels are now realising that this is not the case, especially now there’s a lot of competition."
He revealed that his hotel has nearly 50% of its revenue coming from F&B, and added: "If I look at the opportunities within the rooms division to grow versus F&B, food and beverage is much bigger. A hotel like mine can reach up to 75% revenue from food and beverage. So it's really about understanding what we’re used to doing as hoteliers versus doing what the customer wants."
Whissle Hospitality co-founder Ramzy Abdul-Majeed said that the history behind this focus on rooms' revenue comes down to economics and the HMAs. He pointed out: "Historically, a high number of rooms was going to generate a lot of the [hotel] revenue compared to the restaurant. So the GMs were pushed by large corporates to say, 'push the rooms, push the rooms'. And the F&B was secondary - as a way to give something extra to the guests but never really seen as a way to attract guests from the outside."
Abdul-Majeed pointed out that the reality is that if a hotel doesn't have good F&B, the guests leave and go to another property. "The hotels are now being forced - and now also because of economics - to look at F&B. As said in a previous session, the OTAs' success at booking rooms is taking profitability away from the room rate. So hotels need to look at all the ways in which to make money."
However, the difference between hotels and independent restaurants when it comes to dealing with customers is what makes the experience diverse, said Abdul-Majeed. He noted: "A business hotel will have a guest for 2-3 days, a leisure hotel will have you for 5-6 nights... but if we have a guest for 2-2.5 hours, and with social media these days, if we don’t fix the problem in those 2.5 hours… That’s partly why, we as independents, are more sensible about how we handle guests because if we don’t, we die."
The Maine Oyster Bar & Grill founder & managing partner Joey Ghazal agreed and commented: "Ramzy hit the nail on the head: it’s a question of ownership. There’s no bureaucracy, there’s no paperwork.
"However, it’s a generalisation to say that hotels don’t know how to operate restaurants. There are international examples of hoteliers like Ian Schrager and Nick Jones where restaurants anchor the hotels.
"But definitely it’s a question of ownership, having an owner-operator model where the person is on the floor, where decisions are made a lot faster in favour of the guest. Social media today makes it almost impossible to wait on anything."
Abdul-Majeed continued: "Creativity is a key aspect. If you look at some of the examples Joey gave, hoteliers are very good at making sure everything is spot on at everything in a room and that’s a challenging task. But also with those examples, very rarely have you seen hoteliers open great restaurants but you’ve seen restaurateurs open interesting and creative hotels. A restaurateur comes at it from a different perspective."
Desjardins agreed and said that on the issue of ownership, it was important to empower a hotel's F&B team, and also to try and incentivise restaurant managers through profit sharing or similar schemes. "Not every hotel is lined up with it but it’s starting to be a trend," he added.