Isabella
January 14, 2021
With their entire business revolved around services, and the people who deliver them, how can hotels execute a socially distanced service model during and after a pandemic?
The hospitality industry has suffered greatly this past year, second only to the airlines. As of late April, 80% of hotel rooms in America were empty. Cancellations are staggering. Huge swathes of staff were furloughed or let go altogether — from housekeeping and food and beverage, to bellhops, reservationists, and valet.
(There were, of course, anomalies such as Marriott International, which somehow still managed to turn a profit in 2020 by slashing costs.)
Some of the trends noted in this article were observed even before the pandemic started. However, COVID-19 certainly accelerated these trends as people now expect new standards and service upgrades to meet the new customer demands post pandemic. We believe that regardless of the size of your hotel, it’s important to keep up, or at least be aware, of the modern developments and adapt with the evolving consumer needs.
What’s your plan to welcome guests back next year?
Data from a sample of 65 five-star hotels across the MENA region reveal that over half of a hotel’s payroll expenses originates from the F&B department. Rooms payroll contribution ranges from 30% to 33%, whereas in the F&B department, that percentage is between 55% and 59%. Furthermore, profitability for rooms is 77%-80%, and for F&B it’s 35-38%.
There’s lots of room for improvement when it comes to F&B margins for hotels. Especially when it comes to room service, that typically accounts for an average of 4% of total F&B revenue, and in many hotels, room service operates at a loss. However, is eliminating room service the answer? We don’t think so, especially if that comes at the expense of sacrificing guest experience — particularly during a time when people prefer to stay within their rooms to minimize interactions with strangers.
We strongly believe that technology is the answer. Many hotels have adopted on-premise mobile ordering and digital order management to reduce labor needs and increase operational efficiency. When the guests can scan a QR code and order on their phones, you remove the need for servers and greeters. The order go straight to the kitchen, and all you need is someone to deliver the food to the table, or pool side, or rooms.
Not only does this process reduce labor costs, but it also increases the efficiency of your foodservice operations. That translates to more orders fulfilled within the same period of time, and more customers served. This will lead to an increase in F&B profitability and a reduction in operational and payroll cost.
When COVID-19 hit, Montage International, a luxury hotel brand that also includes luxury residential real estates, was right in the middle of a major expansion. But of course, the timing couldn’t have been worse.
Montage was lucky though, in that the properties were large, spacious resorts and hotels in non-urban areas. That certainly played in their favor compared to high-rise downtown hotels where the population density is higher within the building. On top of the existing large horizontal square footage, Montage also put additional outdoor restaurant seating in gardens and on lawns around the pool. Lobby furniture was configured to be farther apart to support social distancing.
Be it spread out resorts or downtown hotels, it’s expected that space will be deconstructed and re-connected in new ways more than ever. Common areas might be redesigned to appear more spacious. Floor-to-ceiling windows could rise in popularity to give lobbies the airy and open feel. More plants and greenery could be introduced in the indoor areas and guest rooms to alleviate any stuffy feeling of being indoors.
Even slight changes would make a huge difference to how guests feel when they are at the property. After all, it’s all about giving guests the peace of mind and make the feel comfortable staying and spending on the hotel property.
According to a report by Colliers International, on-premise F&B contributes to 35%-39% of a hotel’s total revenue. That percentage certainly fluctuates in different cities and for different types of hotels, but one thing is certain: competition has been on the rise. Be it from independent restaurants, or simply because of the fact that people are less willing to dine-in on premise in the pandemic times, how to maintain or even increase F&B revenue is a problem that hotels need to tackle.
What we’ve found is that technology could easily solve this. At SLS Lux Brickell hotel in downtown Miami, on-premise restaurants use our mobile ordering platform to serve guests anywhere within the property without needing any physical interactions. Be it for room service, table service or delivery to pool side, guests can scan a QR code, order from any restaurant within the hotel, pay on their phone and have it delivered.
What we’ve realized is that guests are much more likely to place orders, order more frequently during their stay and check out more items in their carts when using the ordering platform — simply because of how convenient it is, and how safe this new system makes them feel.
If anything, the pandemic has raised awareness around supporting local businesses and buying local. Also, partly influenced by Airbnb’s local focus, guests prefer designs and merchandise that reflect the unique character of the destination.
That includes every aspect of the hotel operation, from design, to foodservice, to gift shops and supply chain management. If possible, source locally and integrate local artists or cultural themes – and make sure to include that in your marketing messaging. People would be more excited to discover local chefs, artists, stores and experiences when traveling. And there’s no better time to incorporate those elements than now.
For years hospitals have been referencing designs from the hospitality industry to create a more welcoming patient experience. However, now we’re seeing the trend reverse a little – with hotels learning the protocols common at hospitals to improve their safety standards.
These modifications are not hard to achieve. The basic ones include having hand sanitizers located throughout the hotel property and enforce stricter hand-washing policies for staff. At common areas, install ultraviolet light and disinfecting wands to regularly and quickly clean the public spaces. Replace regular surfaces with anti-microbial surfaces at lobbies and rooms…The list goes on.
These practices are not ground-breaking, but the enforcement of which will certainly be given higher priority nowadays. We will also see hotels adding more language in their flyers, handouts and marketing messaging highlighting the sanitary protocols they’re abiding by.
What new policies and upgrades has your hotel adopted and what more are on the roadmap?