Hotel restaurants

Expert Voice: Top Ten F&B Revenue Management Tips for Hotel Restaurants

Silvie Cohen and David Israel of hotelAVE suggest practical steps hotel restaurants can take to increase revenue and minimize the impact of spiraling costs.

As restaurants emerge from the Covid19 pandemic, operators continue to face nationwide labor shortages, rising wage costs and rising cost of goods.

To mitigate these profitability issues, just as hotels and airlines deploy revenue management techniques to drive sales, there are strategies that F&B teams can deploy to optimize their revenue as well. This article brings you F&B revenue management tips to help restaurateurs improve their profitability.

Top Ten F&B Revenue Management Tips for Hotel Restaurants:

  • Fixed price menus: Explore the offer of a fixed three-course menu for a fixed price, which will help you check the average. It’s a popular option for weekday lunch as well as weekend brunch (bottomless brunch) or family/holiday meals.
  • Dynamic pricing: Evaluate surge pricing based on demand levels or meal period to generate additional revenue (weekdays vs. weekends, lunch vs. dinner). Given the increased use of digital/mobile menus (e.g. using QR codes), this strategy can be implemented at minimal cost.
  • Entry Additions: Highlight some additions to menu entries. For example, offer the option of adding bacon to a burger, a fourth taco (if the dish serves three), or egg white substitutes among other combinations for an extra boost. If it’s highlighted on the menu, customers are likely to order it.
  • Time management: Consider how long customers are seated at their table to maximize the number of turns during service. Set table limits or offer express meal options (such as an energizing hour-long lunch) to optimize the number of covers the restaurant makes during certain meal times. Offer additional points or incentives through reservation systems (OpenTable, Resy, etc.) to entice customers to book outside of peak hours. Allow customers to pay via mobile QR code to speed up the checkout process.
  • Cross-collaboration with hotels: Encourage hotel guests to come to the restaurant by offering them various benefits. Destination fee: If the hotel has a destination fee, include F&B offers in the fee to encourage guests to come to the restaurant. Data suggests that a modest discount or a free drink/aperitif generates substantial additional revenue for hotel guests when offered. Prioritize hotel guests: Give guests priority access to seating and booking to drive covers.
  • Competitively priced shop: Complete a quarterly shop of comparable prices for food, beverages and events in the competitive set. Be sure to assess whether menu prices are too low or too high and adjust them if necessary.
  • Look for the ‘stars’ menu: Evaluate product mix (PMIX) and menu cost to understand which menu items are highly profitable and sell (e.g. french fries). Train servers to understand what items to sell in real time based on inventory and prices (e.g. avoid guacamole if there’s a shortage of avocados). Eliminate loss leaders during times of high demand and eliminate menu items that take a long time to cook or require additional culinary/reception resources to execute.
  • Lucrative happy hours: Provide enticing happy hour deals to increase foot traffic in the early hours after work. Another creative option is to offer a “reverse happy hour”, which is a reduced price during the late hours of the evening (from 9 p.m. against 4 p.m.). Use limited menus with tempting deals (US$1 oysters, half-price cocktails, etc.).
  • Additional expenses: Offer your customers the opportunity to buy their favorite restaurant products to take home (eg homemade cookies, do-it-yourself pasta kits, Bloody Mary mix, etc.).
  • Flexible seats: Evaluate flexible seating options to ensure that the four tops can be turned into two tops to mitigate revenue loss due to differences in group size and available seating.