Profitability in hotel bistros

The issue of profitability in hotel bistros has really come to the fore recently, as hotel operators have been forced by deteriorating economics to review the way they manage their foodservice departments. Many are finding that the automatic profit they traditionally made from high volume food sales is disappearing rapidly or has already vaporised. So, what can be done to rectify this? To begin with, I strongly suggest that you accept that economic circumstances are going to remain difficult for the foreseeable future and that there is now a requirement to run foodservice differently to the way it has been run in the past. Sitting on your hands and hoping is unlikely to prove a successful strategy.

Practically, the first thing I suggest you look at is the costings on all the dishes you sell. Because of rapidly escalating ingredient prices it is no longer sufficient to cost dishes when a new menu is activated then forget about margins until the next menu review. You now need to have a dynamic system of cost control, rather than a static system. What I mean by this is that your control system needs to be thorough enough to alert you as soon as a dish loses its margin because of rising ingredient prices. In recent consulting jobs within hotels we have costed dishes in a range of bistros and found that a high proportion of dishes on the menu have unacceptably low margins, but the chef is not aware of which dishes are causing the food costs to blow out. Most chefs seem to work on a seat-of-the-pants system of manual control and, while this may have worked OK in the past when the price of ingredients was much more stable, it is failing now. We also find that daily specials are rarely costed properly. Following this, the next issue I urge you to look at is the portion sizes going out over the pass. We have found that hotel kitchen staff in high volume bistros often take a flexible attitude to food production and sometimes overload plates with excessive quantities of primary ingredients (meat, fish prawns and poultry, etc.) and often substantially overload secondary ingredients (like chips and vegetables) and think nothing of it. This has the two-fold effect of blowing out the food costs and killing dessert sales. Moving out to the front-of-house, have a think about your bistro cashiers. They control the customer average spend of your bistro. If they adopt a passive role and simply take orders, you are likely to be foregoing up to 25% in potential revenue which would have been gathered by a committed sales person via suggestive selling and upselling. Think of it this way: ‘How much money is leaving via your exit doors, intact in wallets and purses, that guests would have left there if somebody made the right noises?’ The bistro cashier’s role is not one for an untrained junior or casual, or for a passive order taker.Further to this, are you assisting the building of customer average spend by utilising modern methods of visual merchandising? We know from practical experience that simply switching from a descriptive menu board (text only), to a pictorial menu board featuring attractive photos of all your high margin dishes will result in a 30% increase in the sales of the pictured items. The eyes are far more persuasive than the ears. Why do you think the big fast food companies use pictorial menus? They know they sell a lot more, that’s why. You might also consider the experience of dining in a hotel bistro from your customers’ perspective for a moment. You wander in, are seated, and then you join a queue for anything up to 10 minutes to place your food order, then you have to queue again to get your drinks from the bar. People hate queuing. You then receive your meal and proceed to eat it. If you finish your drink while still eating your meal are you likely to abandon your meal to go back to the bar, and perhaps risk returning to a cold meal?

You then finish your meal and still have room for dessert, but glance over to the queue at the bistro cashier or dessert counter and decide that it’s all too hard. You’ve had enough of queuing for one evening. Most bistros are organised for the benefit of the business and not for the convenience of the guest, and they kill a great opportunity for increased sales by making purchasing food and beverage a chore. This might have been acceptable a few years ago when bistro food was great value, but with the proliferation of cheap-and-cheerful Asian and other ethnic cafes and restaurants, bistro food is no longer perceived as being cheap. I don’t have to queue at a cheap and cheerful restaurant, and the food is great value and many are now fully licenced. In other words, the world has changed and you need to recognise that the dining public often have better value choices. To counter this you might consider a system of partial table service. Let guests still queue for their main meal orders, but have a few good sales staff with handheld terminals circulating among the tables selling drinks and desserts, so your guests don’t have to interrupt their dining experience, leave their tables or queue again in order to purchase more food or beverage. Well chosen sales staff will pay for themselves ten times over, and you can easily track this by monitoring their sales results.

Finally, what are you selling? If your menu is made up of standard pub fare (parmas, fish ‘n chips, sausages and the like), you are a food museum. You will find that your trade will, over time, narrow down to the bogan and the elderly, and you will miss out on the well-heeled, middle market who are currently spending $50 per head on meals at their local cheap and cheerfuls.

If you don’t change your direction, you will end-up where you are headed . . .

By Tony Eldred, www.eldtrain.com.au

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