Hotel Losing Money? Bank on Booze and Cheap Chow

Perhaps the hospitality industry has been so focused on filling rooms, it forgot about it’s other business — food and beverage. According to Hotel Interactive, hoteliers can bank on boosted bar sales in a recession. And hotel owners are finding that a well-priced beer and a free cocktail hours can keep visitor money flowing throughout the hotel.

Michael George, president and chief executive of Crescent Hotels & Resorts, said bar business is up “substantially,” especially at hotels with a good atmosphere and an attractive staff. “One of the simplest things we did to drive cash flow was to properly set our beer prices,” he said. “Properly priced Bud moves rooms.”

Hilton Hotels Corp.’s research confirmed that guests left hotels to seek out restaurants, so they’re now putting an emphasis on new concepts and fresh fare, including celebrity chefs.

Bob Amick, managing partner of Concentrics Restaurants and Concentrics Hospitality Solutions, Atlanta, a company that creates freestanding and hotel concept restaurants said that hotels lost their way about 20 years ago when they simply gave up when confronted with independent restaurants. “[Hotels] decided they couldn’t make it in the restaurant business,” he told Hotels magazine. 

Several hotel chain executives from Radisson Hotels and Resorts and Wyndham Hotels and Resorts agreed that food and beverage sales at their properties were an untapped market. While some chains are focusing on cheaper, but quality fare, others are relying on familiar third-party operators.

Embassy Suites reportedly is the least affected Hilton brand, most likely, executives said, because it offers more room, a free breakfast and a manager’s cocktail hour (Analyst’s Note: Been there at cocktail hour in the greater San Diego area recently and it was packed.) As we see again, free booze and food seems to draw people like ants.

Perhaps that’s what hotels can take from all this — aside from upgrading their bland and congealed banquet fare to something tasty and fresh — guests want to go someplace where all their needs can be met. By having an available and free breakfast, a hotel has already attracted a segment of customers who may not have otherwise chosen to stay there. By offering a cocktail hour (a bed-and-breakfast staple,) it also stimulates interest and attracts customers to stop by before dinner. By also having competitively priced beer, wine or liquor, a hotel bar can also attract outside customers and keep its guests from the sports bar down the street.

I don’t know if having decent burgers, salads and entrees will automatically create a new restaurant sensation, but in this economy and with proper research, it couldn’t hurt hoteliers to update and freshen their menus. In fact, it may lead to a change in fortune.