Will hotel food and beverage services fundamentally change after the pandemic?

Local and state mandates for operating restaurants during the pandemic have hit the hospitality industry hard. Was the blow strong enough to force permanent changes to the way hotels provide food service? Could such changes fundamentally alter the hospitality industry as it is currently segmented? How will hotel guests react to these changes?

This year, the JD Power Hotel Guest Satisfaction Index study celebrated its 25th anniversary. During this period, hotel catering (F&B) activities have adapted relatively quickly to changing consumer expectations. Competition has accelerated in what is today the high-end segment due to the emergence of lifestyle brands and the bar / bistro model. In the Upper Midscale, free breakfast has become a differentiator in the consumer value equation.

Long-stay hotels (the Residence Inn began serving a free hot breakfast in 2000) have become an attractive concept for travelers and hotel owners. Full-service hotels have started to phase out 24-hour restaurant operations due to labor requirements and declining consumer perception of value for money. Hotels in all segments have elevated pantry areas beyond buyable snacks with ready-to-eat meals and alcoholic beverages. New limited-service brands have started incorporating breakfast and pantry areas into the design and decor of common areas.

New hotel construction and renovations have started to reflect general food trends such as farm-to-table cooking, market cuisine decorating, and mixology. Travelers have responded positively as these new concepts have helped improve the experience of staying at resorts, downtown convention hotels and limited-service suburban hotels. As global franchisors introduced new brands, many of which centered around these trending F&B concepts, the standards for F&B brands became more rigid. Consistency has been applied to maintain quality while ensuring that hotels deliver the F&B experiences that guests want. Year after year, the JD Power study shows that brands with a very consistent experience have customers with higher overall satisfaction. The same is true for guest satisfaction with F&B, driven by breakfast in limited-service hotel segments.

As the industry emerges from an unprecedented shock caused by COVID-19, we must take a look at what has been learned and how to move into the post-pandemic era. Given the effect of the pandemic on restaurants and hotel catering operations, does hotel catering matter more to customers? How does F&B influence the satisfaction of your hotel stay? Should large hotel franchisors provide hotel owners with more flexible F&B standards or none at all? In our opinion, the best way to answer these questions is scientific, that is, an analysis of the available data from which conclusions can be drawn.

Before the pandemic, our research showed that 4 in 5 guests had had an F&B experience during their stay, and more than half of Upper Midscale and Midscale guests considered the free breakfast a “need to have” part of the stay. Additionally, there were no major differences in F&B satisfaction when comparing those who paid for breakfast and those who ate free breakfast in the limited-service segments. In the full-service segments, four in ten customers visited the hotel bar and six in ten used the hotel restaurant for at least one meal. Among full-service customers, satisfaction with food and beverage costs was on the rise.

How has the pandemic affected the hotel restaurant experience when franchisors could no longer apply consistent standards amid different and ever-changing national and local guidelines? For guests who have stayed at a hotel in the past year, they probably didn’t know what to expect. As full-service hotel restaurants closed, room service was suddenly fast and free. With the self-service breakfast areas closed, hotels did what they could to provide their guests with take-out bags, which were often insufficiently contained. Franchisees and operators did their best to manage expectations, however, customers were generally unhappy with the lack of F&B options during their stay.

The newly published results of our 2021 Customer Satisfaction Study showed a decrease in F&B satisfaction compared to 2020 in all segments except the Economy segment. These decreases are due to lower customer satisfaction with the quality and variety of foods, especially for breakfast. These declines were particularly marked at the upper end of the middle scale. In fact, Upper Midscale F&B satisfaction has seen the biggest year-over-year decline in recent memory.

Indeed, the JD Power study showed that fewer customers experienced F&B as expected due to the closure of breakfast areas and restaurants. Those who have experienced an altered breakfast in limited service hotels were generally not happy with the on-the-go solution. The lower satisfaction rates at breakfast are partly due to lower customer perceptions of quality and variety. As more customers used the pantry for their meals, satisfaction with the pantry declined year over year, also due to lower scores for variety. Guest reviews indicate that many hotels have struggled to keep pantries fully stocked. F&B satisfaction also declined in the full-service hotel segments, but only slightly as more guests were satisfied with the improved room service.

No debate about hotel food and drink would be complete without a discussion of the importance of health and wellness today. While this was a trend before the pandemic, health and wellness took on new meaning for consumers. Our recent data shows that the proportion of customers citing healthy living / wellness equipment as “need to have” increases in all hotel segments over the past year. Yet many hotel brands still lag behind when it comes to sourcing healthier foods, preparing healthier foods, and providing nutritional information to guests.

As the pandemic severely reduced hotel revenues, franchisors quickly revised breakfast standards, allowing owners to cut operating costs. Then, in late 2020, a group of hotel owners wrote an open letter to the brand’s major franchisors with a request to change or eliminate free breakfast standards after the pandemic. Whether franchisors will take this step remains to be seen, but caution is required. While reducing operating costs is a laudable goal, no one wants to operate the only hotel in the lineup without free breakfast. In addition, there is a risk of segment blurring, particularly in the upper mid-range, mid-range and economy sectors where the quality and variety of breakfast (rather than the room rate) demarcate the segments of the market. product point of view.

In the limited-service segments, breakfast retains its role as a brand differentiator. The brands that won the 2021 JD Power Award for customer satisfaction all have unique, well-executed breakfast concepts (think Tru by Hilton’s breakfast bar and do-it-yourself toppings). These brands benefited from very high breakfast satisfaction, despite adjustments to breakfast standards linked to the pandemic. As hotels return to pre-pandemic breakfast standards, owners and operators need to be aware of guest’s higher expectations for quality and taste. Consistency, delivered in the form of adherence to brand standards, is always extremely important. The fundamental principles of quality, variety and taste of the F&B hotel remain essential to the guest experience.

Now is the time to consider the F&B operation less as a cost to be reduced and more as an opportunity to be seized. Two decades of measuring customer satisfaction have taught us that customers want value for money, not necessarily the lowest price. F&B plays an important role in this value equation, especially in limited service, and will continue to be a factor in branding for at least half of hotel guests. Given the current state of consumers and their eagerness to spend on travel, we expect most would accept a few extra dollars in room rate in exchange for a free, high-quality breakfast.

Additionally, our data shows that Upper Midscale and Midscale customers who receive free breakfast are much more brand loyal than those who don’t. We expect breakfast to continue to be a brand differentiator in limited service segments. Brands that innovate with unique F&B concepts, refreshed menus and modernized amenities will stand out and have the ability to raise room rates more than enough to cover F&B costs. The availability of on-site F&B also sets hotels apart from the house-sharing and house-rental industry, which has grown even faster during the pandemic.

Our current “reopening” environment offers franchisors of major brands a unique opportunity to refresh F&B standards taking into account both customer needs and operational efficiency. Owners and operators also have the opportunity to test higher room rates while delivering more value in the form of better F&B. As the post-pandemic economy continues to improve and with more than 1,500 new construction hotels slated to open by the end of 2022, competition for guests will be fierce. Maintaining the F&B status quo, especially in the higher-priced limited-service segments, is not an option.

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