David Koretz is the founder and CEO of Plum, the company that introduced the first super-automatic wine appliance that lets you enjoy a bottle of wine, one glass at a time. Koretz was previously the founder and CEO of Mykonos Software, which was acquired by Juniper Networks in 2012 for $80 million. Under his leadership, Mykonos was awarded the Wall Street Journal Innovation Award and won first place in SC Magazine’s Innovators Throwdown. The inventor of a dozen technology patents, Koretz was recognized as an innovator by Bloomberg BusinessWeek in 2012. He is a wine fanatic, aspiring nomad and lover of all things street food.
Perhaps taking a page from popular narratives like ‘Eat, Pray, Love’, travel and dining often go hand in hand. For most travelers, food and beverage options play a pivotal role in their experience of a new culture as well as their opinion of the hotel in which they stay. In this respect, a great location, personalized hotel accommodations, attentive service and great, locally inspired food and drink programs are the primary indicators of a trip well spent.
As such, it comes as no surprise that hotel food and beverage has experienced healthy growth over the past few years. Hoteliers are realizing just how much revenue potential this segment boasts, both in terms of ancillary revenue and utilized as a tool to enhance the guest experience. In 2018, U.S. hotel food-and-beverage revenue per occupied room (F&B RevPOR) increased 2.7% in 2018, according to total-year data from STR, while beverage revenue per occupied room grew 4.2%. However, that same report also speaks to the decline of in-room dining (IRD) revenue. While IRD still boasts a great deal of revenue potential, this reinforces the realization that hotels need to re-examine their existing strategies in favor of enhancing that experience with a more modern approach to IRD.
Even further, a trends report from Avendra found the U.S. lodging industry sees $200 billion dollars in annual revenue, with food and beverage making up 25% of those dollars. More importantly, those expenditures are increasing by 2% to 3% each year. In tandem with this growth, we are witnessing the emergence of several key F&B trends sure to disrupt the traditional picture of hotel F&B programs in favor of a more modern approach.
2019 shaped up to be an exciting year for foodies, as hoteliers actively seek ways to implement a farm-to-table approach to their F&B programs. Large hotel chains around the world are steering away from chain restaurants and are instead collaborating with local chefs and talent to create locally influenced dining options. Local, farm-sourced ingredients with unique, cultural flair, paired with specialty beverages, or — in many cases — local wine. In fact, from 2007 to 2017, farmers markets in the U.S. grew by 100%, eclipsing 9,000 in total.
This trend arrives in synchronized step with the increasing demand for sustainable practices across hotels, enhance authenticity and reduced food waste. Modern travelers are decidedly more eco-conscious and demonstrate a preference for hotels working to minimize their footprint and implement more ‘green’ processes. A farm-to-table F&B program also helps to support the local economy — an advantage that does not go unnoticed in the eyes of modern travelers eager to travel sustainably and contribute to a positive impact.
When we suggest self-service in the same sentence as in-room food and beverage, it’s easy to revert back to the traditional model: the hotel mini-bar. However, the self-service model that we anticipate to take over the F&B segment in the coming years is a far cry from the overpriced, under-performing mini-bar. While they do tap into the basic principle of self-service, and while modern guests crave enhanced autonomy over their experience, mini-bars simply aren’t equipped to succeed — at a reasonable cost to the guest or a reasonable profit for the hotel.
However, this doesn’t mean the end of in-room service entirely; in fact, according to a recent survey of meeting professionals, 43% of guests say in-room service is extremely important when selecting a hotel. Further, 28% of guests even claimed that not offering the service is a deal-breaker. So, the question becomes, if hotel mini-bars are on their way out, what can we expect to replace them?
A popular movement relating to in-room, self-service can be found in the implementation of high-end, self-service amenities. After all, with the inclusion of Netflix, smart TVs and voice-activated technology becoming popular add-ons, shouldn’t food and beverage receive the same convenience-centric treatment? Not only are many hotel rooms including self-service staples such as Nespresso, but they are also taking it a step further with the inclusion of in-room, by-the-glass wine. Guest staying at leading independent hotels and chains, like the Four Seasons, Waldorf Astoria, Conrad, St. Regis, Ritz-Carlton, Westin, Gemstone Collection, Woodside Flags and many more top-rated, upscale properties, can enjoy the convenience of self-serve, in-room wine delivered by the sleek and modern Plum device.
Plum acts as a luxury amenity, allowing guests to choose from a red or white wine to enjoy by the glass, on demand. The appliance is sleek and easy to use, relying on cloud-based tracking which effectively minimizes labor costs and ensures a housekeeper is notified when a bottle needs to be replaced. This provides hoteliers with an opportunity to not only delight their guests with a streamlined, in-room, self-service option, but can also incentivize guests to book directly by including glasses of wine in their room package. Considering over 60% of hospitality executives believe the quality of a guest’s experience will significantly improve through enhanced in-room service, innovations like Plum are an important step in the right direction.
Recently, an article was published titled, “How ‘Grab & Go’ Became the Latest Evolution in Hotel F&B.” As we witness the certain demise of traditional hospitality staples such as the mini-bar and breakfast bar, we see the emergence of a trend which gives guests more control to choose their dining experience. Further, it allows hotels to provide food selections that guests actually want — relying on limited menus, fresh ingredients, options for various diet restrictions and quick preparation.
With ‘grab-and-go’ style outlets available in modern hotels, guests can grab small, pre-packaged or easy-to-prepare meals on their own schedule and terms. Think fast, responsive service that enhances a guest’s travel itinerary.
Gone are the days of ordering room service from a tattered menu stuffed into the bedside table. Modern guests are craving something more tech-centric, and in that same breath, more visual. Many hotels are now rolling out on-screen menus, some of which may not even be a room-service menu, but allows guests to order from on-property restaurants. Not only does this help to cut down some of the profit-cutting, labor-intensive costs of traditional room service, but it provides guests with a better selection of items to choose from.
Even further, meal delivery service is expected to grow by 15% per year through 2020. In the case of hospitality, this means more hotels will be forging partnerships with popular services like Uber Eats to allow for app-based, convenient food delivery and specialized programs and offers for guests. Some hotels are even relying on their own, native apps to streamline the food-ordering process, allowing visitors to order room service or poolside drinks, ask for restaurant recommendations and more via a messaging app.
Of course, it doesn’t end there. With the adoption of voice-activated devices across various touch-points, ordering food via an AI-powered assistant is predicted to soon be mainstream as well. And as more properties install in-room, tech-enhanced services such as on-demand wine, hoteliers are able to tap into a more innovative model that is appealing, memorable, convenient and share-worthy for guests.
Recent findings conclude that one of the biggest areas of F&B investment is event catering, with 61% of hoteliers planning net growth in this area. Convenience/market concepts are also expected to proliferate, with a growing emphasis on fresh, as aforementioned when addressing the ‘grab-and-go’ model. With the growing demand for group travel and small- to large-scale corporate meetings, the subsequent demand for event catering comes as no surprise. As hotels find themselves in a favorable position to attract more conferences, events and meetings, they realize there’s an opportunity to drive revenue through group bookings and event catering. Still, tapping into the demand for self-service, event catering programs can also include options such as ‘grab and go’ and on-demand wine, to ensure the needs of event guests are always addressed.
If one thing is for certain — the hospitality industry is entering an exciting time, enhancing our perception of the ideal guest experience with countless upgrades, technological advancements and program overhauls. Food and beverage is, undoubtedly, no exception, and remains to be an especially promising area of growth for hoteliers around the globe.
This article originally appeared in Hospitality Trends. Visit htrends.com. I&FMM.