The Chesapeake Point of View

Turning An F&B Profit

Turning An F&B Profit

May 19, 2015

WHEN HOTEL OWNERS THINK ABOUT their primary profit centers, they don’t usually consider their food and beverage programs. According to Chris Green, senior vice president of operations at Chesapeake Hospitality, these programs are typically considered ancillary, comparable to an in-room amenity that exists simply to compete with other properties in the area. “We’ve never looked at it that way,” he says. “We’ve always asked if our F&B business units could stand on their own, and, if the answer is ‘no,’ how we can change that.”

As a management company, Chesapeake Hospitality offers its clients an extensive F&B program built upon a strong system framework. “Rooms have a lot of systems that manage the way they are handled, but in food and beverage, those systems can be extremely loose. What we’ve done is create a framework that is firm on the edges, but has a lot of room for entrepreneurial spirit and customization,” Green describes. This framework helps to ensure that the profitability, marketing, and sales portions of the F&B business unit are all in line, and that each property is delivering its expected results.

When developing their F&B programs, Chesapeake decided to partner with Vucurevich | Simons Advisory Group (VSAG), an international restaurant and hospitality consulting firm. It was through this partnership that Chesapeake created its pre-built restaurant concept. “We got the idea when we became conscious of the necessity of creating a plug-and-play system for hotels in need of a restaurant upgrade,” Green says. “VSAG grabbed a hold of the concept quickly and helped us develop something that not only is easy to implement, but has pretty much guaranteed underlying financial controls.”

These pre-built restaurant programs offer clients all the components necessary to either create a restaurant from scratch, or update an existing entity, including templates for menus, signage, design schemes, and a core menu. All of these components can be customized to reflect the location of the restaurant, such as incorporating Chesapeake’s Executive Vice President, Chris Sims, adds, “Because this program is plug-and-play, you can either customize the template slightly or use it as a platform to do a full customization. It is really up to each individual hotel how they use it.”

Chesapeake only started offering the pre-built restaurant concept in fall 2014 but client response was immediate. The first restaurant built using the concept was The Spot Eats & Drinks at the Holiday Inn West Palm Beach, which opened in February of this year. Chesapeake worked with the owners of the hotel to develop a name and a logo, as well as an overall feel for the design. Once the logistics were decided upon, Chesapeake handled the overall implementation. By all accounts, the first launch was a great success. “Feedback for this restaurant has been over the top,” Green says. “We’re seeing year-on-year gains of over 30 percent in sales across the F&B outlet side of the business, and the owners couldn’t be more pleased.”

Currently, Chesapeake is developing two other restaurants with this concept, one in Milwaukee, Wis., and another in Baltimore, Md. Green believes that there will be many more to come. “We really find the F&B component of hotel management exciting, and we feel like we hit on an area where there’s a huge opportunity to deliver value as a management company. We think that this piece of the industry is completely overlooked by a lot of operators and can really make a difference by driving guest retention, guest returns, and ADR,” he says.

In addition, Chesapeake’s pre-built restaurant program is always evolving to seize new opportunities, taking steps such as adding vegetarian and vegan options to its core menus. Green notes that clients who utilize the pre-built concepts are able to access this upgrade at any time, keeping their properties fresh and on-trend.

For hotels looking to turn a greater profit from their F&B offerings, Green says the very first thing a hotelier must do is accept that F&B can be a profit center. “You need to look outside of what is considered possible and redefine your targets to maximize your opportunities.”