By Frank H. Andorka Jr. H&MM Senior Editor
Properties that want to provide foodservice to guests often are put in a bind. A full-service restaurant is an expensive venture, and no matter how good the marketing strategy, it remains a hit-or-miss business. Within the last two years, a solution has presented itself that has caused the industry to take notice.
Food courts in hotels have become a popular way to meet the needs of
the consumer while keeping the investment by the hotelier at low levels.
"People don't usually want to eat in a traditional hotel restaurant," said
Barbara Shuster, director for Choice Hotels International's Choice Picks program. "There's a stigma to it. We did an analysis of our full-service hotels and found that our operators were having real problems keeping their restaurants profitable."
Shuster said most of Choice's properties were spending 40 percent to 50 percent of their investment on food costs, and 45 percent to 50 percent of their investment on labor. With those high costs, it was nearly impossible to turn a profit.
In 1995, at the company's annual convention, it launched the Choice
Picks Food Court concept. The program included setting up strategic alliances
with a number of nationally known foodservice providers-among them Sark's
Coffee, Pizzeria Uno and Nathan's Hot Dogs-to create food courts like the
ones consumers often eat at
With this concept, Choice operators were able to slash their food costs to an average of 32 percent of their investment and its labor costs to 28 percent of their investment, Shuster said. That allowed hotels to provide foodservice options that better met guests' needs without a huge investment of capital, she said.
Choice currently has 26 food courts around the country, and Shuster said it hopes to have 65 open by the end of the year. Eighteen of those food courts are in hotels, but the concept has been so successful that it has branched out into strip malls, gas stations and other ventures. The costs for installing the entire program range from $130,000 to $200,000, Shuster said.
"If you're not making $500 to $600 a day, you shouldn't be in the foodservice business," Shuster said. "Being entrepreneurial, we can be particularly flexible and meet our customers' needs more quickly."
Ned Barker, v.p of food-and-beverage for Holiday Hospitality's Holiday Inn brand, said the food court concept his company launched in 1996, called the Convenience Cafe, also has shown great growth.
The Convenience Cafe includes brands such as Little Caesars Pizza, Blimpie Subs and Salads, and Mrs. Fields.
"It looks as if the efficiencies that we thought we would see-in both labor savings and food costs-are hitting right on target," Barker said. "Consumers want brand names and that's what we're giving them."
One of the challenges that Holiday Inn faced with its concept was the
unusual nature of seeing a food court in a hotel, Barker said. While most
consumerswouldn't think twice about eating in a food court at a mall, for
something about seeing one in a hotel throws them.
"The consumer often sees a food court as giving them fewer choices than they would have at a restaurant," Barker said. "We need to combat that idea. The truth is, we actually offer them more choices, so the trick is educating the consumer."
Barker said Holiday Inn has found the food court concept appeals more to the leisure traveler than the business traveler, who is less used to the idea of eating at a food court while on business.
Bob Hamilton, director of licensing and business development for Mrs. Fields, which makes baked goods, said the company evaluates whether to get involved in these food-court ventures the way someone would evaluate any business endeavor: How much money can the firm make from it?
Before Mrs. Fields joins a food court, its representatives look at the site and decide if the location warrants its store, Hamilton said.
"If we wouldn't put a company-owned store there, we won't make the deal," Hamilton said. "You don't do anything in business if the money isn't there. "You also have to overcome the hotel-food syndrome that many consumers have," Hamilton said. "You have to have the menu that will give customers a variety, and Mrs. Fields enjoys being part of that."
Little Caesers Pizza is motivated by building brand equity through partnerships and luring in new customers, said Sue Scherbow, v.p. of corporate communications for the Detroit-based company.
"When people are out of their element, as they often are at a hotel, having a brand name product out there is comforting to them," Scherbow said. "That's why you're seeing more and more of these branded food courts in hotels. "We also like this concept because it gives people, who might not otherwise have an opportunity, to try Little Caesers because they don't have one in their neighborhood," Scherbow said. "It increases brand awareness, and that helps in other ventures as well."
Michael Beam, director of restaurant development for Bristol Hotel Co. and creator of the food court for the Holiday Inn San Antonio Downtown, said he wanted to create more than a food court, so he added some entertainment amenities.
In addition to being an area where guests can get three meals a day,
there are also pool tables, a golf simulator, virtual reality games and
video games. There's also a full-service bar for the business traveler,
"Essentially, we made this area conducive to anything the guest wants to do," Beam said. "So far [the area opened in December], our comment cards tell us it's been the overwhelming reason that guests say they will return to the property." The Holiday Inn food court concept has been profitable in two months at the San
Antonio property, which Beam said varies starkly from the previous restaurant in the hotel, which lost money continuously.
The Choice Picks food court has been wildly successful at the Clarion Hotel in Hollywood Beach, Fla., according to G.M. Tim Brennan. His hotel is located directly across the street from a beach, and it does a lot of meetings business- markets that are both well-served by the food court, Brennan said.
"For our leisure guests, it's perfect for people who want to grab something quick and head out to the beach," Brennan said. "For our business travelers, it allows them to move quickly through lines at a business break, and still have time left over to make those important calls. It's been great."
The food court at Brennan's property can move 250 people through it in 30 minutes, which Brennan said is perfect for those meetings at which 50 to 300 people break at the same time. It's a reasonably priced product that guests can get quickly, and they have a variety of foods to pick from, he said.
"Brand names make it happen," Brennan said. "It appeals to a diverse mix of people."