Take Control
Chain brands and celebrity chefs bring in F&B revenue while Hotels stay in the operating seat.
By Rebecca Oliva, Staff Editor -- HOTELS Magazine, 5/1/2001
Ask any hotelier if he is willing to give up control
of his food and beverage outlets and he is likely to
decline. Although outsourcing has proven to be a profitable
way of boosting revenue, the loss of control and input
hoteliers endure makes it less attractive. Still, the
long time reputation of mediocre hotel fare leaves many
guests opting for outside venues. Even if a hotel offers
a unique concept and exceptional dishes, most guests
reserve the stereotype in their minds.
Yet, many hotels are finding a new success by introducing chain brands
that resonate in a guest's mind or teaming up with celebrity consultants
who leave a lasting impression. This version of outsourcing serves
more than one purpose in that it puts the control back in the hands
of hotel operators.
"Hotels want to maintain control of their food operations," says
Dan Bendall, vice president at Cini-Little International Inc, Rockville,
Maryland, a consulting firm. "With recognized chains and celebrity
chefs, they get the notoriety of the name, but still keep
control."
Historically, there has been somewhat of a clash
between hotel operators and their outsourcing partners, Bendall says. "In general hotel
operators are looking to provide their guests with service whether
it be room service, catering or elsewhere," he says. "Restaurant
operators don't always have that same goal."
But what they do have is business savvy of restaurant
operations, an element most hotels are criticized of lacking. Bendall
says the plus side of outsourcing is that "you've got a name
to put on your restaurant and drive up volume. It doesn't appear
like a hotel restaurant."
Bendall says chef consulting is the biggest trend
in outsourcing on the higher end. Most chefs are work on a consulting
fee and want to get a percentage of the revenue. "They are looking to get a guarantee
for using their name," he says.
Perhaps the most recognized area where hotels
are known to outsource is Las Vegas. Luxurious hotels and fast-paced
casinos take away from the restaurants. In recent years, hotels like
Bellagio Hotel & Resort
offers more than 15 restaurants in its vast 11-acre property, but many
of them are branded entities such as Le Cirque, Olives, Aqua and Circo.
MGM Grand Hotel & Casino offers such well-known chef personalities
as Emeril Lagasse, where guests can sample the famous Louisiana
cooking at Emeril's New Orleans Fish House.
Elsewhere, other hotels have caught on. By franchising
a well-known chain or hiring a celebrity chef to consult, hotels
can market to outside patrons without the hassle of giving up operating
control. "For
hotels, it's a negotiating game," Bendall says. "In a lot
of cases, a very low percentage of guests in eat hotel restaurants," he
says. "This is a way to bring them back."
The Name Game
Names can prove a useful tool in the restaurant
business. Hotel Plaza Athénée in Paris experienced that benefit
firsthand when it hired famed chef Alain Ducasse to add his creative
expertise at Plaza Athénée Restaurant. "Ducasse
brings a lot of attention to the hotel," says Luca Allegri,
executive assistant manager, Hotel Plaza Athénée.
Known for its elegance and charm, and nestled
in the heart of the Parisian fashion and entertainment section, Hotel
Plaza Athénée
had made an impression on guests in every arena except food and beverage. "The
decision to consult Alain Ducasse was dictated by financial reasons," says
Allegri. "F&B was losing a lot of money."
Instead of outsourcing through a lease agreement
or selling restaurant space, Plaza Athénée chose to spruce up its F&B
with a consultant. The arrangement between the two allows freedom
for both parties.
While he is being employed on a consultant basis, Ducasse revamped
the restaurant, changing more than 60% of the concept to reflect his
style and standards. Ducasse also brought along with him a team of
chefs, in which he trained at his previous restaurant. Additional hiring
of staff is verified with him as well. But Allegri says it is more
of a team effort, Ducasse and Allegri decide upon the equipment, purchasing
order and budgeting.
Ducasse consults in return for a fixed salary
and a percentage of the revenue should the restaurant become successful.
And with his name, that didn't take too long to achieve. Since the
restaurant's opening in September 2000, Allegri says "it's like having 25 extra rooms
that are full all the time." The revenue generated has exceeded
expectations. Ducasse has recently taken his name and advice
to the Essex House in New York.
Attracting Outsiders
Having a celebrity chef can not only improve
a hotel restaurant's reputation, but it can make it recognizable
to the general public. In a move similar to Hotel Plaza Athénée, Sofitel Hotels
and Resorts have gone the consultant route. "If you want to
attract customers other than hotel guests, you need to have a name
behind your restaurant," says Christophe Marziale, corporate
F&B director, Sofitel Hotels and Resorts. Recently, the company
created a program called Café du Chef, in which celebrity
chefs will be hired for their expertise and of course,
the use of their name. So far, the Sofitel has implemented the program
in Paris, Nice, Leon and Strasbourg and plan to have it running in
the U.S. by 2002.
"Café du Chef is designed for customers outside the hotel," says
Marziale. Particular details must be met before the program will be
implemented in the hotel. "The region must have a strong market
and be a vibrant business area," he says. The Café concept
was designed to portray the new French café simple and light.
Each café is small, seating a maximum of 75 covers.
In the program's first implementation at the Sofitel Le Faubourg,
celebrity chef Alain Dutournier has already brought with him a stream
of customers, about 80% of the restaurants customer's for both lunch
and dinner are not guests of the hotel. Despite the average bill running
US$50 to US$60 for lunch, a figure higher than the average lunch price,
Marziale says it's less than what you would expect to pay for Dutournier's
cuisine.
Plaza Athénée has seen similar
results with Ducasse's name on its restaurant. People flock to eat
at a restaurant that bears the Alain Ducasse name on the door, says
Allegri.
With the consultant arrangement, neither hotel
has seen a problem with in terms in other F&B outlets. Both chefs' restaurants maintain
their own kitchen, while room service and breakfast preparations are
done in other areas. Some of the items are available from the restaurants
are available on the room service menu and catering choices. Allegri
says room service has not been affected but other F&B venues have
vastly improved. "We have tremendously increased the turnover
for banquets since the arrival of Dutournier," Allegri says.
Chain Recognition
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While well-known chef consultants draw the elite crowd,
some hotels rely on brand recognition to solve their
outsourcing problems. Wyndham International developed
a partnership with Shula's Steak House, an upscale dining establishment
named after the popular football coach Don Shula.
"It's mainly geared toward the outside customer," says Patrick
Colombo, senior vice president of F&B operations, Wyndham Interntaional. "If
we can't get the outside guests, the hotel guests won't
use it."
Colombo says Wyndham has conquered the stigma
of poor hotel fare with the addition of Shula's Steak House in 13
of its properties. By 2004 Wyndham intends to roll out more than
30. The hotel chain purchased a portion of ownership in Shula's company
in 1998. Shula's consults with each property to maintain a consistent
look and feel, but it is franchised to Wyndham. "Shula's is very active," Colombo
says. "It's a team effort."
Although Colombo doesn't dismiss that brand recognition
plays an important role in attracting guests, he does believe that
franchising is a good thing. "There's a certain connectivity aspect to the hotel and
restaurant that needs to be maintained," he says. "Outside
operators are not used to dealing with other hotel duties.
I can't walk away from my obligation to room service. We want the brand
and we want to operate it."
Since its partnership with Shula's, Wyndham's
F&B outlets have
more than tripled in revenue, an estimate Colombo says "is conservative." All
properties are running some of Shula's menu items on their
room service menu as well, but Colombo admits that in the hotels haven't
been able to use the brand to attract more banquet business, as that
type of cuisine is not that type.
Perhaps the most important aspect of franchising
a restaurant chain is whether it fits into the hotel's market. MHI
Hotels owns nine properties throughout the Eastern seaboard and in
the Southern part of the U.S. Brands such as Hilton, Sheraton and
Holiday Inn Select are among the company's portfolio. The company
already franchises Ruth's Chris Steak House in some properties but
wanted an outlet that catered to the mid-market family sector. Most
of its mid-market hotels like Holiday Inn are situated in areas heavily
populated with family-oriented restaurants. A low score rating in
F&B operations on the GST's forced the company
to rethink its strategy. "We wanted to improve F&B, but we
were limited with our payroll resources," says Steve Smith, executive
vice president of operations, MHI Hotels.
"The types of hotels we are in have a lot of family
appeal," says
Bob Beall, president of Ledo Pizza Systems. "Our concept lends
itself to servicing the neighborhood and hotel."
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Smith says Ledo Pizza Systems counteracted his
problems by giving him a menu that was less demanding in labor. "Franchising gives
hotels the benefit of bulk product pricing, brand recognition and the
ability to maintain control," Smith says.
But Smith also took into consideration that he
already needed a staff to run breakfast and banquets, so to have
someone else come in and run his other F&B outlets, seemed useless.
Profit margins rose 2% in properties with Ledo
Pizza, Smith says, even at times when the overall market was down
6%. A good portion of the business comes from outside ustomers. In
some properties that is as much as 50% of F&B revenue. And, Smith
says room service has also improved. Ledo's is convenient for guests
to order from, as Smith says it acts as a deterrent from guests ordering
other carryout pizza brands.
Smith believes the success of F&B revenues is also due to the
low average check at Ledo. "Most of the families who come spend
so much money on the attractions that they want a cheap meal," he
says. All of the LEDO restaurants have their own separate
entrance and are not found directly off the hotel lobby. In part, Smith
says it was done because of the high traffic of carryout business,
but it also provides the illusion that the restaurant is a separate
venue from the hotel.
Ledo Pizza Systems initially trains hotel employees, provides products
and redesigns the restaurant, in exchange for 5-6% franchise fee and
an initial fee of US$20,000.
On the Side
Mariott International Re-Starts
In response to heavy demands to provide better
breakfast, Mariott International is set to launch an improved breakfast
program in mid-May. The Re-Start program will offer seven
to eight choices of regional specialties. "We see breakfast
as a key driver whether the guest will return," says Robin Uler, senior
vice president of F&B and retail services. "It's one of the most important
things to which guests pay attention."
The new menu includes dishes such as corned beef hash with poached
eggs and green chile huevos rancheros, salmon hash and for those from
the West Coast, Joe's Special featuring scrambled eggs with ground
beef, spinach and parmesan cheese.
International properties will offer traditional
American breakfasts as well as breakfast from that region. "We know that when people
travel, they like to east what they are familiar with," she says. "Or,
they like to try specialties of the region they are in."
Specific diets were also taken into account as
the new breakfast program offers whole wheat and no sugar products. "You don't have to do
the same things in all the hotels," Uler says. The program gives
each property a variety of choices from which to choose
to suit their style and region. Mariott will roll out additional changes
to include Re-Plenish, to improve room service and Re-Store, to revive
its gift shops.
Keeping it Local
Located in the heart of Malaysia's Sarawak jungle,
The Royal Mulu Resort offers guests a chance to escape the mundane
reality and experience exotic culture. Its restaurant serves a blend
of authentic tribal foods, straying away from the usual hotel fare. "We're in Borneo- why would anyone fly to the
heart of the rainforest for a club sandwich?" says Walter Kohli, the
resort's general manager. Yet, offering dishes such as Ayam Panoh (chicken
cooked in Bamboo) and Umai (raw fish with chilies and lemon) proved to be
a challenge without the help of the local tribes.
So since its opening in 1993, the resort has
been developing a tribal kitchen staff. About 85% of the kitchen
staff have never worked before, Kohli says. Most of the training
for the local staff is done on-the-job and takes about five months,
averaging employment costs at about US$252 per month. "We assign new staff to different stations, until we
see where their talent lies," Kohli says. And since salaries are
based on experience, overall wages tend to be a bit lower
than city hotels in Malaysia, he says.
There is also less attrition with tribal staff. "Our local staff
build their career and their lives here," says Head Chef Nikal
James, who is himself a part of the Iban tribe. "Staff from the
city tend to stay only about one year," he says.
And the benefits? "They bring a host of ideas and traditional
dishes to the kitchen," says James. "They already know how
to cook jungle plants and local fishes. We create some
innovative and fun menus."
F&B People
Mullen 
Leuck The Westin Bonaventure, Los Angeles, appointed Patrick Mullen executive
chef...
- The Resort at the Mountain, Welches, Oregon, named Stephan Earnhart
the director of food and beverage...
- The Phoenician, Scottsdale, Arizona, appointed Douglas Dodd as
chef de cuisine at Windows on the Green...
Walt Disney World Swan and Dolphin, Lake Buena Vista,
Florida, named Helmut Leuck executive chef...
The Melrose Hotel, Dallas, Texas appointed Mark LaHood
director of food and beverage...
- Hotel Le Bristol appointed Marlene Vendramelli-Pouysegur sommeliere...
- Sheraton Hotel Concord, San Francisco, California named Rico Villegas
as executive chef...
- Hotel inter-Continental, New York, promoted Julien Debarle regional
director of food and beverage...
- Nemacolin Woodlands Resort & Spa, Farmington,
Pennsylvania, promoted Scott Cape as executive chef...
- Paradise Point Resort, San Diego, California appointed Thierry
Cahez as executive chef...
- The Regent, Hong Kong promoted Berhard Mayer to executive chef...
- Arizona Biltmore Resort and Spa appointed John Zaner executive
chef...
- The Cliff House at Pikes Peak, Colorado, named
Scott Coulter executive chef.
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