The Chesapeake Point of View

Rethinking Room Service

Rethinking Room Service

October 17, 2013

Joe Smith, executive vice president of Chesapeake Hospitality, says operating expenses associated with room service are high, from the labor costs down to printing charges for in-room menus. And to meet brand standards, hotels have to offer room service during set hours that may not make financial sense when analyzed from a cost perspective. Chesapeake manages more than 20 hotels, the majority of which are branded, full-service properties with room service. “Our food and beverage departments are profitable,” Smith says. “It’s not like we’re running away from F & B. Our restaurants lounges, catering and banquets will make money. Room service is typically not an area where we will make a large amount of revenue, because there is a lot of overhead.”
From the guest perspective, room service has earned a bad rap for being slow, mediocre, and overpriced. Choice Hotels CEO Steve Joyce says he has been eating room service while on the road for 30 years. “I never liked it in the ‘80s, and it hasn’t gotten any better now,” Joyce says. “Nobody wants to wait 45 minutes for a dish that comes up relatively congealed and isn’t that good to begin with and pay $60 for breakfast.”
Contemporary room service needs to provide a valuedriven experience, says Beth Scott, vice president of global products food and beverage, and wellness for Hilton Worldwide. “Increasingly, guests are looking for more relevant delivery options that provide greater value by being fast, convenient, and portable,” Scott says.
Much like technology dried up profits form in-room phone calls and on-demand movie rentals, the proliferation of fastcasual restaurants and grab-and-go markets has impacted the in-room dining experience. “How many people really sit down to two eggs, bacon and toast with Jelly?” Smith asks. “Most people are so much more comfortable grabbing a yogurt, some fruit, maybe a glass of orange juice, and boom they’re on their way.” A recent Mintel survey revealed that sales at quick-service restaurants have increased to nearly $30 billion in the last five years. To make up for lost revenue, many hotels are finding ways to reinvent room service.
The New York Hilton Midtown now offers in-room delivery from its new self-service restaurant and market, Herb N’ Kitchen. The menu includes seasonal salads, artisanal sandwiches, and brick-oven pizzas, as well as regional New York favorites.
Meals arrive in an environmentally friendly retail bag rather than on a fancy silver tray, and there is no delivery charge attached. Instead of 24-7 access, however, delivery is restricted to 6:30-10:30 a.m. and 5:30-10:30 p.m. Guests with mid-day hunger pangs or late-night munchies can still order delivery from outside restaurants, but they must come to the lobby to retrieve it for security and safety reasons.
“Traditional room service has become less relevant in certain types of hotels and markets,” Scott explains. “In large urban environments where there are many options for destination restaurants within the city, guests are often more likely to go out and explore the dining scenes as they aim to experience local culture.”
Yes, in a culinary mecca like New York City, the odds are less likely that travelers would choose to stay in their hotel rooms to dine. But there are definitely circumstances where a hotel should or has to have room service, Mandelbaum says, such as in isolated markets with limited dining options nearby or airport locations where travelers come and go at odd hours. At five star hotels, where guests expect to be pampered, highend, 24-hour room service is part and parcel of the luxury experience. “The Ritz Carlton, Four Seasons or Mandarin traveler has the budget to afford it, and they’ll pay $50 to have a hamburger delivered to their room so they don’t have to go downstairs,” Mandelbaum says. “That’s why those hotels will probably retain it, because they can get the premium pricing that justifies keeping the service.”
In an age where free WiFi tops travelers’ must-have amenity list, true opulence is less sought after, says Jacob Tomsky, a veteran front desk agent and author of Heads in Beds. Even so, there will always be a home for room service at luxury hotels, he agrees. “The affluent will always want to experience fine cuisine in the privacy of a suite, wearing a robe, delivered on a rolling, sheeted table on wheels,” Tomsky says. “But as alternatives continue to present themselves hotels will continue to drop the yolk of room service and focus on what a hotelier is truly great at providing; lodging.
Scott declined to go into financial details regarding how Herb N’ Kitchen may generate a healthier return on investment for the hotel, but says that with casual dining on the rise, the restaurant better meets guest desire for reasonably priced, high-quality meals on the go. “Herb N’ Kitchen offers more options to guests so they don’t have to leave the hotel to buy what they want, and at the same time we increase our business, so it’s a win-win,” she says. “It also attracts new local clientele and provides an alternative for meeting attendees who may not have time for a full-service experience.”
As of late, a number of clever twists on room service have been popping up in the hotel industry. The Amway Grand Plaza Hotel in Grand Rapids, Mich., opened a free-standing pizzeria, Piezelli’s, a couple of years ago after realizing how many guests ordered outside delivery from national pizza chains. “Our approach allows guests the convenience of signing the costs to their room while eliminating the need to wait in the hotel lobby for their food to be delivered,” says Andrew Bowen, associate director of food and beverage.
The Amway Grand has experienced a steady decline in overall room service revenue in the last decade, Bowen says, which is why the staff has been looking for ways to manage costs more effectively and better appeal to guests’ needs. The hotel still offers a traditional room service menu, but Bowen says there has been a cultural shift away from in-room dining across the board. “The business of packaged, grab-and-go foods has blown up over the last decade and travelers are well acquainted with where they can get the most bang for their buck,” Bowen says. “It’s our job as hoteliers to listen and implement new and innovative concepts to keep them happy and satisfied when they are guests in our hotel.” Piezellis now represents roughly 15 percent of overall room service revenue, and that number continues to grow.
Mandelbaum says more hotels are forming partnerships with local restaurants and grocers where they can arrange for delivery and get a commission for every order. “It’s just reinventing the way you continue to offer that service but making it profitable for the hotel,” Mandelbaum says. Other innovative concepts include Affinia Hotels’ partnership with Fresh Direct to provide grocery delivery service to all New York City guests at the Trump Hotel Collection’s express in-room menu of healthy meals that are delivered in 15 minutes or less. Guests who order room service at the Public Chicago will receive a brown-bagged gourmet meal at their door within minutes. The recently-opened b2 Miami Downtown is also brown-bagging its tavern fare for guests. The recipe for room service may be changing, but hotels that pin down the right ingredients can satiate guests.