Limited Service Hotels Have Potential to Offer Room Service Through Tech Integration, Research Shows

New research shows potential for hotels to offer on-location dining through tech partnerships, without the F&B overhead. The findings come from a new white paper commissioned by iSeatz, a technology company providing digital booking experiences that integrate with loyalty programs, titled The Future of Room Service.

The report focused on consumers interest and usage in three main areas: traditional room service, and both food delivery and grocery delivery while traveling. Key findings include:

• 50% of leisure travelers and 51% of business travelers were either "very likely" or "somewhat likely" to order food delivery from hotels for additional loyalty points.
• Seven in ten respondents have great interest in local food experiences when traveling.
• 'Ease and convenience' are the key motivating factors for ordering both traditional room service and online food delivery.
• 67% of business travelers and 48% of leisure travelers have already used a food delivery app on a recent trip.

The number of hotels offering room service has declined by 40% in a two-year period ending in 2016. Profits from F&B departments at hotels that offer room service are substantially lower than F&B departments at limited service hotels. Food delivery apps such as DoorDash, Grubhub and UberEats have continued to grow at substantial rates.

Two of the top five largest hotel chains have already embraced food delivery. In November 2017, Intercontinental Hotel Group (IHG) was the first hotel brand to launch a food delivery partnership, allowing members to earn IHG points for food delivery with Grubhub. In April 2019, Wyndham Hotels & Resorts launched a similar partnership with DoorDash as a way to facilitate in-room dining at their limited-service hotels, which make up approximately 80% of the hotel group's portfolio.

iSeatz found that the interest in room service is still very high with travelers. Hotels can facilitate their loyal guests' dining needs through an asset-light tech partnership with a food delivery partner, instead of creating an expensive room service program, the company said.

This whitepaper is the third survey produced by Phocuswright and iSeatz. In Spring 2018, Business Travelers' Demand for Ancillary Services was published as a companion piece to Hotel Ancillaries: An Unexplored Opportunity which focused on the leisure traveler's interest in ancillary products.