Hotels are facing a conundrum. Recent predictions state that the supply of hotel rooms will soon exceed demand, leading to a decrease in occupancy levels. This will, of course, put pressure on hotels to find revenue-making opportunities within other lines of business. While room service might seem to be an obvious choice for increasing hotel revenue, this line of business is actually considered a loss leader by most hotels, states iSeatz in a recent whitepaper titled: “The Future of Room Service: Craving for in-room dining, food delivery and online grocery delivery trends amongst U.S. Travelers.” In fact, iSeatz’s research found that “in 2018 the average F&B departmental profit was 28.4% for all U.S. full-service hotels, but only 23.2% for properties with significant in-room dining revenue, demonstrating that providing this service has a negative effect on hotel performance.”
Not only is room service an expensive service for hotels to offer guests, it has generally become regarded by hotel guests to be an expensive service in which to partake. However, iSeatz found that guests who are ordering room service are doing so for convenience sake, with 68% listing this factor as the number one reason why they use it, even when the hotel property offers alternatives such as on-property restaurants or cooking facilities in the room.
This is the same reason why customers use third-party delivery. With this in mind, hotels could turn a profit on F&B by making room service even more convenient for guests, encouraging them to use this service more often, and by cutting costs on the backend via technology implementations.
ADD TECH TO THE GUESTROOM
Technology has come a long way in recent years to help hotels make ordering room service easier than ever before. From in-room tablets to mobile apps, hotels have a wide variety of options to choose from when it comes to room service tech.
The Del Lago Resort & Casino found that a bedside tablet and mobile app combination from Intelity worked best for it in generating more room service requests. In fact, during its first year of operations, the 205-room resort has had up to 10,000 engagements a month and generated more than $25,000 in additional room service revenue.
“We believe strongly in the digital guest experience, which includes offering a mobile app so guests have easy access to information everywhere during their stay, and keeping that app front-and-center in guestrooms,” said Del Lago’s Director of Marketing Crystal Paolelli in a press release. “With ICEbedside tablets strategically located on night stands, we are making it extremely convenient for people to order room service, request valet service, ask housekeeping for an extra pillow, make a restaurant reservation, schedule a treatment and much more. ICEbedside even gives guests control of some of the in-room technologies, like lights and the TV.”
For those hotels that aren’t interested in adding a tablet to every guestroom, Aireus Inc. offers a different solution. It has created an app that works with guestroom Apple TVs to allow guests to browse the room service menu and customize their dishes. It also offers opportunities to upsell the guest with menu item add-ons. Once placed, the order is sent directly to the kitchen and a check is opened for the guest. Order notifications are sent to the room so the customer can see every step of the process and estimate when the food will arrive. Once the bill is paid, guests can have their receipt texted to their phone number. It also provides full reporting and is able to print to iPad KDS so that managers can acquire and analyze reports virtually anywhere.
USE GUEST DEVICES
Operators could also offer guests the option of using their own mobile device to order room service. For instance, RoomOrders provides hotels with a customized website that guests can visit by either typing in the URL or by scanning a QR code displayed within the guestroom. A vividly illustrated menu will then open on their device and guests can scroll through images of menu items, place an order in a few clicks from their room or while in transit, and track delivery time. After receiving their food, guests are prompted to share images on their social networks and rate their meal and service, which provides valuable real-time, private feedback directly to the hotel.
The Chedi Lustica Bay hotel in Montenegro recently implemented RoomOrders and found an increase in value per order right away for two main reasons.
“First, our menu instantly became more visual, so our international visitors were more inclined to order more of our fine dining options; second, the cross-selling and up-selling happens automatically during the order process. It’s seamless. Guests can see the progress of their order, nothing gets missed, and we can extract the data regularly to review and understand guest behavior in more detail, personalize services and continually improve quality. That’s what we’re all about,” says General Manager Jan T. Albers.
In fact, Albers found that guests seem to like using the online menu so much, that it feels like it has been able to “defend and compete against surrounding food and beverage options.”
No Room Service? No Problem.
Limited service hotels that don’t have the backend equipment or staff to offer room service in house, however, can still make money on F&B. One way is to partner with a company like HCN (Hotel Communication Network) and outsource room service altogether. It offers a program called DineIN which allows guests to use in-room tablets to order from up to 12 local restaurants that have been handpicked by hotel staff. This endorsement by hotel staff is a key to the platform’s success. Knowing that the hotel endorses a restaurant promoted via DineIN gives guests peace of mind that they will get a high quality meal. And unlike third-party delivery services that require that the guest leave their hotel room to pick up the food from the lobby, DineIN is able to charge the order to the room folio and deliver it to the room, just like a normal room service order. HCN manages the process entirely. This allows hotels to offer a service they wouldn’t normally have and to share in the profits.
After testing a popular food delivery service, a 1,500-room downtown San Francisco hotel tried the HCN-managed Room Service offering. Almost immediately, satisfaction scores jumped from 50% (achieved by the food delivery service) to 85% (realized by HCN’s DineIN Service).
Or operators could implement an upgrade to their hotel room minibar with the addition of wine-by-the-glass technology. This technology from Plum mounts to the wall and houses two standard wine bottles, preserving each bottle for up to 90 days. This allows hotel management to choose any brand of wine and to set the price per pour accordingly. As the guest uses the technology, Plum tracks the sale, bills the guest’s folio, and notifies housekeeping when it is time to replace any empty bottle. Plus, management can track revenue and profit in
“Most of our guests appreciate a fine California wine, but they don’t necessarily want to buy a whole bottle,” said Piero Procida, Director of Food and Beverage at the London West Hollywood at Beverly Hills. “Being able to purchase just one or two glasses in their guestroom becomes a very attractive proposition. Additionally, many of our guests are on the move, and this enables them to also enjoy a glass without having to wait on delivery. It can also act as an excellent tool for quick and easy guest recovery with a simple authorization from the front desk.”
Automatic minibars are another option for hoteliers to consider. According to Bartech, oneout of three hotel guests will consume from the guestroom minibar. When hotels use an automatic minibar solution, sensors can determine which items have been removed and automatically post the purchase of the item to a guest’s folio. With automatic posting, hotel staff experience less guest disputes and losses due to consumption inaccuracies. This same sensor technology then notifies hotel management of which items require restocking. Bartech adds that automatic minibars lower labor costs significantly because hotel employees only visit the minibars in rooms that show they’ve had guest activity (about 25% of all guestrooms). They also know which items specifically need to be restocked, so they’re able to bring only the items that need to be restocked, making the restocking process faster and more efficient.
Hotels with limited or no F&B operations could also make good use of the rising grab-and-go culture among today’s travelers. Stockwell is “the next generation of vending machines,” according to the company and is currently looking to expand its presence within the hospitality industry. The 5 foot wide by 5 foot tall smart store is stocked with 50 to 60 items ranging from snacks, fresh foods and cold drinks, to toiletries, basic medicines and tech accessories. It currently offers room key accessibility (which allows Stockwell to integrate with the hotel PMS and charge guests’ rooms), credit card readers and even has the ability to integrate with hotel apps in the future so that guests could use the app to gain access to it. After opening the door and taking the items they want, guests are automatically charged for what was taken. In many cases Stockwell could replace an existing hotel market to provide 24/7 access to guests with reduced operational costs.