There’s Big Money In Your In-House Hotel Restaurant

The blog headline is catchy! Isn’t it?

(No! It is not clickbait. I am going to walk the talk in this blog.)

But it’s not always this way. Sometimes I struggle with my blogs.

I start thinking, “What if I fail to engage my readers? What if I’m boring them? What if my articles aren’t great enough?”

But today, I am here to talk only business. No sugar coating!

Now that you’re here, I am assuming that your hotel restaurant is either struggling to make enough revenue or thriving with limited strategies.

Whatever is the reason, in general, every hotel wants to improve their restaurant revenue. But not every hotel ends up succeeding.

And for someone who’s been writing blogs for the hotel industry for quite some time now, I feel that it’s time to give weightage to this topic.

So, in this blog, I will try to help you with some of the practical tips (as I said, no sugar coating) to make the most out of your in-house hotel restaurants.

It is a Business Within a Business

Restaurants weren’t a serious business model for hotels at the onset. It was all about offering additional services to attract more guests (which is still the case, though). 

Also, outsourcing food was a trend back then because of the hotels’ inability to manage a dedicated kitchen just for the restaurant.

But today, modern hoteliers have realised the importance of in-house restaurants and brought in a tremendous amount of zeal to deliver great hospitality. And restaurants (in-house hotel restaurants, to be precise) have become a significant part of hotels, bringing in more cash.

Now, here’s the business aspect.

According to a report, around 25% of a hotel’s revenue comes from its F&B segments.

But how come these outlets are becoming such a big thing?

Because, hoteliers are starting to think as restaurateurs, going all out with strategies and investments. They are not just serving meals to hotel guests but also to people not staying at their property.

And guess what?

The same report also suggests that the revenue share from in-house F&B services is going to grow in the coming years.

Do you see how rapidly things are evolving and how competitive it is going to be?

And you, my friend, if you aren’t betting on your hotel restaurant, then you’re missing out. Big Time!

Risk of Having In-House Restaurants

Like I said in the beginning, I am going to talk business. And it wouldn’t be correct if I only touch on the ‘rainbow and sunshine’ aspect of an in-house restaurant.

There are risks (more of challenges) involved when you operate a restaurant inside a hotel.

One of the major ones is losing out on money. A hotel invests a lot to build and maintain facilities, employ staff and train them, deliver top quality food and services, marketing, and whatnot.

However, not every hotel pulls this off successfully. More often than not, it takes a toll on a hotel’s core operations i.e. selling rooms. Which ultimately costs business.

But again, with a robust strategy in place, the perks definitely outweigh the risks. And this brings me to my next point.

10 Tips to Make the Most Out Of In-House Hotel Restaurants

Whether you are already having an in-house hotel restaurant or planning to start one, these points will help you extensively in making things work. 

#1 Decide on the right model

No! Just because there are several profitable hotel restaurants, you cannot start one right away.

You need to decide on a model. By which I mean, what sort of services are you going to offer.

For example: You could offer only dine-in or breakfast or takeaway. The business model of your restaurant has to be such that it aligns with your hotel.

Until and unless you have a robust plan in place, you can not run an in-house restaurant profitably.

Not to mention, doing anything and everything just for the sake of $$ could take a serious toll on your hotel and its reputation.

And I am sure, you don’t want that!

#2 Perform market analysis

This might sound a bit cliched; however, it is a standard action for businesses.

You cannot decide on your offerings without knowing your customers, right?

So, when I am saying market analysis, you not only have to see what is trending in other properties but also what people are into. And according to that, create an essence at your hotel restaurant.

For example: Many people don’t choose to eat at restaurants in hotels because of the notion that they are overpriced. So, you have to learn what’s affordable for people and set your prices accordingly. 

Another example is: Many travellers are inclined towards ethnic food. And to meet the needs of these folks, try adding a local concept to your restaurant and offer more ethnic food options.

#3 Make your menu enticing

A well-engineered menu is the reflection of a restaurant’s concept and intended audience.

If you haven’t considered working on your menu, then you must.

But how to do that?

Here are certain things to consider:

• Offer a balance of classic dishes and fresh food
• Decide how large your portions are going to be
• Do the much-needed math and set the correct pricing 
• Invest in design as it will show that you stick to your concept
• Write an enticing menu description to make your guests’ mouth water
• Do not neglect the local food (like I already mentioned above)
• Keep your kitchen capabilities in mind while creating a menu

#4 Work on your restaurant aesthetics

Many restaurants focus only on the design and as a result, they fail to accommodate guests coming in large groups. 

DO NOT make that mistake! 

The main focus here is to utilize the restaurant space as effectively as possible. You have to ensure that the ambience and the seating arrangement go hand in hand. 

Do some basic math and see how many seats approximately you would want at your restaurant. And plan your seating arrangement accordingly.

You can also opt for a flexible floor plan to have enough available space for all your interior elements and to not turn any guest away. 

Word to the wise: There are services available that help restaurants with the same. So, do consider opting for one. You’ll save a lot of time that you can use to optimize your operations.

#5 Improve on your table turnover rate

If you don’t know what a table turnover rate (or table per turnaround time) is, it is a metric used to determine the average amount of times a seat will be occupied in a restaurant during a meal period. 

It is calculated by dividing the number of parties served by the number of tables.

So, for example, if you have 7 tables at your restaurant and you have served 35 parties for dinner, then your turnover rate is 5 turns per table during the dinner hour.

The more turns you have, the more likely you are to generate better revenue. However, it is not advisable to go all out and increase your turns because it might affect the guest experience and increase the load on the staff.

Rather, you can always try maintaining a decent table turnover rate. By which, I mean, allow your guests to have enough time to enjoy their meal, and also keep it ideal to ensure minimal waiting time for new parties.

Here are some tips for a better table turnover rate:

• Do not delay in greeting guests.
• Try to learn about their time constraints. A single question like “What brings you folks in today?” could say a lot about it.
• Train your wait staff and maitre’d to optimize the time spent behind each table.
• If there are repeated guests at your property, do not explain the menu.
• Always keep items ready in your mind that can be quickly prepared.
• Keep specials every day and try to promote those. This will be easy on your kitchen staff too.
• Make sure you have two or more servers for large tables/parties.
• It is completely okay to ask campers to leave. Period. (Just be polite enough in your approach)
• Try to avoid reservations on busy nights.
• Ensure that your kitchen has two sections — one for room service and another for dine-in guests.
• Drop the check before the meal ends (if the bill isn’t from an in-house guest). However, this is a tricky thing. It all depends on the ability of the wait staff to read the table properly and drop the check at his/her discretion.

And the list goes on. There are so many things you can do to ensure better turnovers.

Do let me know in the comments if you have points to add!

#6 Create packages

Remember, while I am talking all about restaurants, do not forget that it is an in-house one, a part of your hotel.

You have to make sure that you are also clubbing your hotel’s core business with the restaurant. And one of the best ways to do it is by creating packages.

For example: You can offer free breakfast to your hotel guests. Also, you can club it with discounted lunch and dinner.

Word to the wise: Don’t forget to personalize their experience if they are your repeat guest.

#7 Turn to technology to offer a personalized experience

Talking about personalization, the right set of software can be of great benefit.

A hotel PMS and an integrated restaurant management system can help you not only streamline operations but also store guests’ preferences. These systems work in sync and make sure the data flow is smooth without any discrepancy.

For example: When a guest checks into your property and then opts to dine in at your restaurant, you can always store their preferences. Now you know what kind of food they like. So, the next time they are at your restaurant, do offer them that bottle of Italian Scotch.

#8 Get listed on food delivery apps

If you want to take full advantage of your in-house restaurant, you must focus on guests outside of your hotel as well.

Getting listed on a food delivery app helps you achieve just that. And it’s all because people have realized the ability of a restaurant and these apps. 

Food delivery apps are a great way to attract more outside guests. People can not only order food but also reserve a table. Which in turn, improves your hotel’s bottom line.

Additionally, marketing and data gathering become easier.

So, do consider partnering with such apps if you want to scale your overall hotel business.

#9 The overlooked avenues of generating revenue

Many hoteliers have cemented a notion that if they have an in-house restaurant, they should only deal with F&B. Which is not true at all!

Your restaurant is a great boulevard of revenue. You just need to know how to utilize it.

One of the best ways is to turn your restaurant space into a banquet hall where you can host various types of events.

For example: It’s the ‘World Food Day’. And wouldn’t it be great if you host a culinary workshop at your restaurant? Or how about hosting a seminar on becoming a chef and offer hands-on training for beginner and intermediate Chefs.  

It’s all about thinking out of the box. You have to be agile and make sure you are reaping benefits in every possible way.

#10 Turn to revenue management

Now, this point is really important.

Either you could choose to perform all the above-mentioned actions by yourself or opt for services like revenue management.

Now, are you aware that there are revenue management services for F&B?

If no, never mind. Let me explain.

Just like for hotels and airlines, revenue management for F&B is about predicting market demand (or you could say, understanding your customer base) to maximise revenue. 

Furthermore, it also helps you control food-and-beverage costs, manage inventory, price availability, and change prices while continuing to provide consistent, high-quality meal experiences. 

If you’re new to the restaurant business, I highly recommend you to seek help from RM experts and then get started.

“Applying revenue management to F&B is important. Hotels ultimately need to understand their market, customer, and demographics if they want to drive business to their restaurant.”