FOOD AND

BEVERAGE DIVISION

6.1 INTRODUCTION

In discussing the ways that hotel organizations have hotel foodservice. Movement was away from
changed, we pointed out that in earlier times food downtown and central business district hotels.
played a significant role in the organizational Motels and motor hotels were built on highway and
structure and product/ service mix of hotels. It has freeway interchanges to take advantage of the
been speculated that the preeminent role played by mobility of the American family. Fast-food
hotel foodservice in society became significantly restaurants, too, affected the away-from-home
diminished with the onset of Prohibition and during eating habits of Americans. Consequently, many
the 1920s. People stopped going to foodservice hotel companies saw as too great the cost of
establishments where they couldn’t “get a drink.” providing high-quality competition in the face of
Prohibition gave rise to competition from street these [Link] net effect was that many hotel
restaurants that operated sub rosa as speakeasies. guests and operators came to believe that 235
These restaurants were not constricted by the hotel foodservice was little more than a necessary
visible, public nature of hotel dining rooms. This evil. For many operations, this became a self-
diminished role was compounded in many ways by fulfilling prophecy, and hotel foodservice
the depression years of the 1930s and the war years floundered for many years.
of the 1940s. This situation has been reversed in recent years.
In general, it was difficult for most hotels’ Of the many factors mentioned earlier that forced
foodservice to recover from the effects of organizational change (market segmentation, return
recognition lost during Prohibition. Recovery was on investment, demographic shifts, and so forth), it
further delayed by the Depression and the seems that return on investment has played a
uncertainty and reordered national priorities that dominant role in this turnaround. The double-
accompanied World War II. whammy issues of construction cost and return on
In 1945,at the conclusion of World War II, well- investment expectations of people outside the
documented major shifts in population and hospitality industry strongly suggest that space
economic emphasis began to occur. Freestanding devoted to foodservice should contribute at least its
restaurants continued to compete effectively with
 2

share to the profit structure of the modern hotel State University. From his perspective, looking
service system. ahead to the future state of hotel food and beverage
As a result, hotels seem to be willing to try operations, Bosselman provides an in-depth
anything to capture additional revenue, prestige, and analysis of the way the hotel food and beverage
competitive advantage. Among the tactics addressed organization has changed over the last eight to ten
in several of the articles and essays included in this years and offers tantalizing clues and examples that
section are partnering with restaurant companies, echo the prescriptions proposed by Hubsch. He also
outsourcing a hotel’s foodservice, new catering and addresses the structure of the organization,
beverage management strategies, celebrity chefs, interactions of food and beverage elements within
and rethinking the entire role of hotel food and the lodging operation, operating ratios,and potential
beverage. trends in this major—and expensive—operational
component.
Dominic Provenzano is director of operations of
FOOD the Downtown Marriott at Key Center in Cleveland,
Over 35 years ago,Allen Hubsch (1966) suggested Ohio. From the perspective of a previous position as
a number of ways to revitalize hotel food and director of food and beverage, he provides front-line
beverage service that have proved eerily detail of how Bosselman’s theory of food and
[Link] his suggestions were: beverage plays out for the food and beverage
director.
• Hotel food and beverage facilities must become In a major research effort that began in
profit centers—no more a necessary evil! 1998, Laurette Dubé, Cathy Enz, Leo Renaghan,
• Food and beverage management calls for new and Judy Siguaw of the Center for Hospitality
and increased professionalism and less reliance Research at Cornell University studied the best
on the old chef–maître d’ model. practices of hotels in the U.S. lodging industry. In
• Food and beverage outlets must become their words, “The goal of this research was to
amenities that produce room-nights. surface and summarize practices of use and value to
• Hotel food and beverage units must adopt street the entire lodging industry” (Dubé et al., 1999, 7).
restaurant philosophies;merchandising, Siguaw and Enz summarize several of the practices
advertising, decor/ambience, menu, and service from that study that have been developed by hotels
must compete with local competition. to achieve the “strategic charge of profitably
meeting customer needs” (1999, 50). The authors
• Food and beverage can be used to fill
describe how top hotels integrate the ideas of
marginally profitable space in rentals, storage,
restaurant design and conceptualization with all of
or production areas.
the variables that affect the quality of the food and
• New food and beverage outlets can leverage the experience for the guest.
existing facilities like storage and kitchens by The concept of outsourcing was mentioned
spreading fixed costs over a wider sales base. earlier in the context of how some hotel companies
Hubsch’s article,now considered a classic, is are rethinking the role of hotel food and beverage
among the suggested readings for this section. and how to maximize investments in facilities,
Robert H. Bosselman is the director of the furnishings, and equipment for foodservice outlets.
Dedman School of Hospitality and Dedman According to Strate and Rappole (1997), because
Distinguished Professor of Hospitality at Florida hotel restaurants have often been managed as a
 3

secondary function, owners and operators are conferences, conventions, meetings, and events of
questioning the conventional wisdom about how all kinds, foodservice professionals who specialize
hotel food and beverage is conceived and managed. in planning and serving meals and beverages to
They state that this new focus on hotel foodservice large groups of people are increasingly important.
results in innovative concepts and strategic alliances The authors note, “Although onpremise catering is
with well-known restaurant brands. In their article, generally the secondlargest source of revenue for
they analyze this trend outlining historic antecedents most hotels, following sleeping rooms” and “often
of the practice and use the Texas firm Bristol Hotel the highest visibility the hotel has on a local level,”
Company as a case study. banquets and catering are still too often ignored by
Few would argue that should a hotel choose to hotel school curricula. In this article, we partially
do its own foodservice, a first-class executive chef address this lack.
is essential to allow a hotel organization to compete Catered affairs represent a significant
effectively for food and beverage business in contribution to the profit picture of hotel food and
today’s market. It is, however, fairly clear that chefs beverage service. The efficacy of a hotel’s efforts in
today do not have the dominant role they had a selling and servicing the group business market may
century ago. Given the importance of the food and very well be the difference between profitability of
beverage function, as established by the fore- the food and beverage function and some less
Section 6.1 Introduction desirable outcome. Shock and Stefanelli explore the
organization, personnel, and processes of the
catering department and give the reader an in-depth
going articles, the chef is nevertheless an integral view of catering executives and banquet
part of the competitive strategy and a full-fledged organizations. The article includes Internet
department leader. He or she is no longer purely a addresses for additional information.
technician. This individual must have developed a It is the revenue and visibility importance of the
significant range of managerial skills to catering function that makes the energetic essay by
complement the technical and artistic training we Rich Benninger so intriguing. From rising at 6:00
have come to expect from an executive chef. The A.M. or so, thinking today is the day he will “get
appearance of ultra-high-profile celebrity chefs adds everything done” in the catering and convention
another interesting variable to the food and beverage services office of a 5,000-room resort hotel casino
director’s mix of challenges. If a hotel commits in Las Vegas, to hitting the sack after midnight,
much of its food and beverage strategy to the talents Benninger gives the reader an insider’s view of life
of one famous person, it can enjoy a significant in the fast lane of Vegas catering and convention
competitive advantage but also become hostage to [Link] executive director of catering and
that person’s whims and personality. Many high- convention services at the Caesar’s Palace Resort
profile hotels in Las Vegas have “name” chef Hotel and Casino, Benninger is uniquely positioned
programs, and in many major population centers, to provide these insights.
top chefs have made their hotels destination venues
due to their fame in the kitchen.
Patti Shock and her colleague John Stefanelli BEVERAGE
highlight the importance of the banquet and catering In any hotel that has more than one formal bar,there
functions of hotel food and beverage in their piece, is usually a separate function within the food and
updated for this edition. With the increased national beverage department called bar or beverage
attention and focus on the importance of
 4

management. Ideally, that office coordinates all extended in resort areas to include recreational
matters that concern liquors, beers, and [Link] areas.
beverage manager is responsibile for purchasing, A new facility popular in many hotels is that of
receiving, storing, and issuing liquor, wine and beer the in-room bar, mini-bar, or honor [Link]
inventory, and quite obviously has the managerial sometimes the responsibility for inventory of these
responsibility to control that inventory. bars rests with room service, the beverage manager
Additionally, the beverage manager: in most cases is also deeply involved in their design,
marketing, and control.
• Hires, trains, schedules, and controls all
In many ways, the beverage manager’s job can
beverage and bar personnel.
be compared, in terms of historical
• Promotes the various beverage department
services.
• Coordinates the requests of other departments
that require beverage services—for instance,
banquet and catering, room service, chefs,
management.
• Assures that his or her department is in
compliance with federal, state, and local laws
and regulations.

The beverage manager administers or manages

up to four types of bars.
The front or public bar is that in which the guest
can, if he or she so desires, interact with the
bartender and other service personnel. There are
provisions for guest seating at the bar itself,which
may be part of a restaurant or a separate room or
area. Separate tables and stand-up areas may also be
available for beverage service.A front bar may or
may not incorporate entertainment.
A service bar is a hidden bar designed for use
by the hotel’s food and beverage service staff only.
It may serve one or more foodservice areas and/or
room service, and it is designed specifically for
efficiency and economy of service. In most cases,
speed is considered the essential ingredient in
service bars. Service bars typically are centrally
located in the back of the house, out of guest view.
Portable bars are designed for maximum
flexibility and can be used in conjunction with
beverage sales associated with guest activities
anywhere in the hotel or on its grounds. This may be
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 5

stereotype, to that of the housekeeper. Often the University of Nevada, Las Vegas. Luciani’s
beverage manager has worked his or her way up essay, reprised here from the third edition, draws
through the ranks of beverage server and preparer on his industry experience, research, and teaching
and through experience, longevity, and interest beverage management and provides a view of
becomes the beverage or bar manager. There is how the modern beverage manager has evolved
reason to believe that in many ways this pattern is from his or her historical counterparts.
changing. Like many other areas of hotel The planning, preparation, service, and
management, the beverage management function management of food and beverage in modern
now faces a range of issues that are more hotels have changed significantly since the first
sophisticated and complicated than traditional edition of this book was written. The essays,
beverage management problems of the past. It research, and commentary presented here are
may be that the beverage managers of the future chosen to illustrate the breadth and depth of this
will have to bring to their job a level of process of change. The reader who is interested in
managerial, organizational, and administrative hotel food and beverage should be able to
sophistication that was previously unnecessary. synthesize an accurate vision of the practices and
The issues, responsibilities, and structural realities of this major operational division of
management of the hotel’s beverage function are modern hotels.
analyzed and discussed by Valentino Luciani,
professor of beverage management at the
lodging operations, the organizational structure of

6.2 MANAGING FOOD AND BEVERAGE

OPERATIONS IN LODGING
such departments, interactions of food and
ORGANIZATIONS beverage elements within the lodging operation,
Robert H. Bosselman operating ratios, and potential trends in the area.

Like the lodging industry in general, foodservice

in the hotel market has improved its position over
MISSION AND GOALS
the last few years. A typical characteristic is a “The goal of our food service operations is to
market posting steady but not significant growth provide the highest quality of food and service in
and emphasizing cost containment and a sophisticated, comfortable ambience, by
[Link] lodging foodservice competes with friendly and professional staff, ensuring that
the multitude of commercial foodservice every patron returns,” states the Four Seasons
operations for the consumer dollar, value remains Hotel in Las Vegas. This statement, succinct and
the focus of both operators and consumers. A focused, exemplifies what lodging operations
number of studies have identified food and nationwide are seeking. Most lodging executives
beverage services as a primary contributor of identify food and beverage operations as one of
value to a customer’s lodging experience. the more complex areas to manage in the entire
This introductory essay discusses the mission lodging arena. Lodging foodservice not only
and goals of food and beverage departments in involves the traditional difficulties associated
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 6

with both producing and serving food and the ideal outcome is that hotel and local guests
beverages but also the performance of these choose to dine in one of the hotel’s offerings. A
functions every day, often 24 hours a day. The strong food and beverage program that delivers a
resulting labor costs and operational expenses high-quality product and experience can be used
prove burdensome for many lodging as a competitive advantage as well as a sales tool
establishments. In order for these food and for the lodging facility.
beverage operations to survive and thrive, they Many hoteliers choose not to compete in this
must draw not only guests of the lodging facility environment. Instead, their strategy is to
but also consumers from the external market of eliminate food and beverage operations
the lodging property. Hoteliers are analyzing their altogether, or to lease food and beverage
operations to identify ways of increasing the operations to outside companies, either
percentage of guests who stay to dine onsite, chainoperated or an independent restaurant (see
known as the capture rate. the article by Strate and Rappole elsewhere in this
In fact, the more profitable lodging food and section). In particular, food and beverage sales in
beverage operations obtain more than 50 percent motels and motor-hotel restaurants continue to
of their business from non-guests of the decline as a percentage of overall sales when
[Link] hotel or motel guest is not a captive compared to full-service hotels, primarily as a
diner; he or she has many other opportunities for result of an increasing number of lower-priced
[Link], in order for a hotel property to be lodging operations offering free breakfast and no
profitable, a significant percentage of sales must other meal service. However, that free breakfast
be produced by food and beverage operations. To has become a competitive positioning statement
accomplish this, lodging facilities must for the property. Guests now expect it, and they
successfully compete with the numerous chains expect quality, yet such lodging facilities must
and independent restaurants that offer a variety of maintain their cost structure.
services. One advantage for full-service hotels is While the reader may start to think that hotel
the banquet business, which can be a major food services are not major players in the overall
revenue producer and operate at a high profit foodservice market, 2005 projected sales were
margin. It becomes critical for lodging operators estimated at $25 billion, according to the National
to research tourists’ specific food needs and Restaurant [Link] are five major hotel
wants, and how their specific operation can better chains whose foodservice sales per hotel average
serve these tourists. In addition, a clear, objective more than $2.3 million. At the top lies Sheraton
analysis of local competition is necessary to Hotels, whose properties average well over $4.6
determine the segment and genre in which the million in foodservice sales. It should be noted
hotel can compete and succeed. that a number of convention/resort hotels could do
If the hotel is competing with an established well over $30 million in annual food and beverage
local competitor, then the hotel foodservice sales. Clearly, foodservice professionals have as
operation must outdeliver on all levels of quality, much or more opportunity for success as in other
service, and ambience. In a large hotel, it is also segments of the foodservice industry. With
necessary not to compete directly with another potential sales like those noted, lodging food
unit in the same hotel. Units must be diverse to services remain a critical partner with respect to
give different segments of the market a choice; both the revenue and profit of the property. A
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 7

smart, resourceful manager makes the foodservice 1. To provide the appropriate level and degree
operation unique, thus attracting additional of food and beverage service to the property’s
patrons to the lodging establishment. Thus, guests.
foodservice can be looked on as a means of 2. To support the overall goal(s) of the property.
gaining competitive advantage over other lodging
operations. 3. To assist the property in gaining a
competitive advantage over other lodging
The field of lodging has a long history of
establishments.
serving people food and drink during their travels.
From the earliest days of the Roman Empire, 4. To function efficiently and effectively in
when people traveled on foot, on animal, or in order to produce a profit.
vehicles drawn by animals, to the modern age of
air,rail,and car transportation, hotels and inns
provided for their needs. In fact, early hotels were
ORGANIZATIONAL
usually the center of community activity and often CONSIDERATIONS
the only place one could eat away from home. The
glamour years of the late nineteenth and early The organization of foodservice departments
twentieth centuries produced grander hotel within lodging establishments varies depending
properties, the so-designated palaces of the on the type of facility and, in the case of chain
people, which solidified this perception of hotels operations, corporate policies. Due to this degree
as centers of public entertainment and as sources of variety, categorizing lodging properties can be
of food and drink for [Link] reputation difficult. For example, a property located in a
continued well into the twentieth century, as resort environment may also have extensive
hotels became the logical place to meet for convention space.A property known primarily as
entertainment and business discussion. a convention hotel has room enough to
Foodservice operations independent of hotels accommodate large groups. Foodservice outlets
were rare even in the larger urban centers. It was likely include restaurant(s), lounge(s), banquet
not until the post–World War II era that facilities, and room service. A resort property
independent restaurants and restaurant chains provides all the amenities that focus on guest
grew in both number and influence over the entertainment and relaxation, with emphasis on
customer. As we enter the twenty-first century, specialty restaurant(s) and room service. Unique
lodging foodservice accounts for approximately 7 problems may face resort managers with respect
percent of the total foodservice market. From total to seasonality of operations, location, and layout.
domination of the market to its role as a secondary The latter points are important because the
player today, lodging foodservice has undergone property itself, as well as individual food and
dramatic change. As properties struggle to decide beverage outlets, may be located in hard-to-access
whether or not to offer foodservice and,if so,the areas, which affects operational expenses.
number of foodservice units and the level of An example of a resort is the Renaissance Sea
service to offer, future managers must recall what World Resort in Orlando, Florida. David
the goals and mission of the foodservice operation McKeever, director of restaurant operations, is
should be: responsible for three full-service restaurants as
well as banquet and conference services. David
notes that his facilities aim for an upscale
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 8

perspective, highlighted by regional and services—particularly at breakfast—for the busy

contemporary menu influences and characterized traveler.
by upscale wine sales. He identifies the property The Four Seasons Hotel in Boston
clientele as wanting a relaxed environment in demonstrates one example of how a hotel food
food and beverage services. and beverage operation can be [Link]
Lloyd Wentzell, vice president of food and food and beverage division has four departments;
beverage, provides a slightly different view of food preparation, catering sales, stewarding, and
these services at the Riviera Hotel and Casino in sales outlets. The latter has five operations:
Las Vegas. He notes that the food and beverage private bars, room service, a full-service lounge,
operation there is an [Link] buffet and a fine dining restaurant, and banquet facilities.
coffee shop are for inhouse guests, and the (three) Each department has line employees who report
gourmet rooms are for guests including those who to assistant managers who, in turn, report to
come to the shows at the hotel’s four department heads, who then report to a director of
entertainment venues. The snack bar in Nickel restaurants and bars, who, in turn, reports to the
Town is used to bring visitors from nearby director of food and beverages. Regardless of the
properties. Room service is a necessary loss size of the lodging facility, food and beverages
leader used to maintain resort hotel status. must be produced and served. However, the
Airport properties have grown with the increased size and complexity of some operations
increase in air travel. Quite often, travelers choose makes it critical that managers communicate well
these properties based on the convenience factor. with all levels of employees. The trend may be
While occupancy rates are high during weekdays, toward flatter organizational structures as well as
weekend business tends to drag. There does not to completely separating out certain functions of
appear to be an emphasis on food and beverage the food and beverage area.
operations in such facilities.
Economy properties are coming off a period FOODSERVICE PERSONNEL
of significant growth. This is the segment that
often rejects offering foodservice Who are the key people in the organization of
[Link] brands such as Ramada Inn lodging foodservice? Our attention here is on the
and Hampton Inn are noted for their aggressive operational players, those individuals most often
growth in building new properties with little or no responsible for the work of pleasing the guest
food services. Additionally, significant growth is while holding the line on costs.
expected in the lower-tier extendedstay market. In most kitchen operations, an executive chef
However, some properties are attempting to is responsible for management related to
redefine the concept of value to the customers. An production activities. Depending on the size and
example is Courtyard by Marriott,which complexity of the operation, the executive chef
combines comfortable lodging with downsized may actually perform little in the line of food
foodservice operations. All-suite properties production. In a small operation, the chef may
remain one of the hottest concepts in the lodging also be a part owner and perform most of the
field. While some units contain kitchen facilities, food-related functions. One of the exciting trends
many offer complimentary food and beverage today is the use of bigname chefs in hotel food
services, often allowing them to create a signature
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 9

room in the lodging property. The proper may or may not be a supervisor, often called a
positioning of the restaurant in a niche market can host or hostess, or a maître d’. This individual
also have a residual positive effect on average rate greets guests and supervises the waitstaff. At the
and occupancy. Marketing a celebrity chef as a actual service level are the captains, servers,
primary component of a hotel may yield a bussers, and cashiers. If a lounge operation is
competitive advantage among that specific present, so are bartenders and cocktail [Link]
hotel’s competitive set. one can readily imagine, working as a team is
With the trend toward downsizing operations, imperative.
it would be the rare organization in lodging In today’s cost control environment, food and
foodservice that employed numerous back-of- beverage operations are trimming payrolls and
the-house employees engaged in a single consolidating job responsibilities to cut
function. Some examples of the past might operational expenses. This cross-training of staff
include the sous-chef, the executive chef’s allows an individual to take on multiple
assistant and often the staff supervisor; the responsibilities. The Breakers Hotel in Palm
saucier, or sauce cook; the garde-manger, the Beach, Florida, utilizes a cross-training program
cook in charge of all cold food preparation; the that allows the property to completely reorganize
chef pâtissier, or pastry chef; and the banquet chef its staff annually, facilitating mobility of staff as
in charge of catering. Each of these positions well as improved service to guests. In the past, it
would have had assistants. In addition, other jobs was not uncommon for the food and beverage
were steward, purchasing manager, storeroom operation to employ workers around the clock, as
clerk, and several janitorial staff. most items were made from scratch. With modern
Some examples of how lodging foodservice is equipment and the use of more convenience food
organized today have been reported in studies of items, such as preportioned meats, it is now rare
best practices. The Boulders, located in Arizona, to find butcher shops or pastry shops in hotels.
created a food forager position to improve Again, hotel operations are concentrating on
quality of products. Menus are designed around quality, value, and cost. If the property can find a
foods actually located, which saves time spent product on the market, the trend is to purchase
trying to find ingredients to fit a menu while rather than make from scratch.
providing guests with a unique dining There has been increased attention on the
experience. The Greenbrier, in West Virginia, education level of chefs in lodging operations. In
designed a formal three-year culinary apprentice recent years, traditional culinary arts programs
program. This allows the resort to attract a have expanded from two-year to fouryear
continuous supply of talented chefs as well as education programs, while traditional four-year
create a cooking school for guests (thus adding hospitality institutions have expanded their
value to the guest experience). The Pierre in curricula into culinary arts. Under the direction of
New York City utilizes an independent the author (when he served there as department
consultant to manage purchasing. This frees the chair), the Department of Food and Beverage
chef to focus on food production and has led to Management in the Harrah College of Hotel
reduced food and labor costs. Administration at the University of Nevada, Las
The dining room can have an equal degree of Vegas, was the first four-year hotel administration
complexity, depending on the operation. There degree program to offer a bachelor of science
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 10

(B.S.) in culinary arts management. People who cleaning; engineering, in the form of maintenance
earn this degree can command rewarding pay, but and repair; and accounting, in the form of
much is expected of them as well. They must be financial analysis. For example, food and
able to produce high-quality products utilizing beverage team members must communicate their
minimal resources. They must also direct all reservation needs or restrictions to concierge and
activities in the back of the house, including the bell staffs. One example is announcing a new
training and supervision of employees. Their menu that has been initiated, or that a special
responsibility is the means by which a food and activity will occur. Likewise, food and beverage
beverage unit produces profit for its parent depends on information submitted to them
institution, the lodging facility. regarding occupancy, VIP guests, or demanding
guests.
No matter the type of lodging property, it is
OPERATIONAL critical for management and staff to meet
regularly to discuss department interaction and
INTERACTIONS better ways to service the [Link] example
Hotels are complex institutions divided into with a special case to consider is a casino resort
separate operational areas, among them rooms, [Link],food and beverage has been
engineering, administrative, accounting, human perceived as an amenity for players. The casino
resources, and sales, in addition to food and and slot departments are continually in contact
[Link] divisions interact in every with food and beverage units, particularly room
imaginable way 24 hours a day to produce the service, to request special arrangements for their
guest experience. It is necessary that the strategy clients. These requests might range from
or mission of the operation as a whole be amenities being delivered and set up in the guest
communicated to all levels of the organization to room to supplying the gaming area with special
ensure a consistent guest experience. In order to foods and drinks.
maintain continuity within the organization, all The type of client sleeping in the guest rooms
strategic moves must be consistent with the significantly affects the revenue-generation
mission of the operation and build toward the potential of a lodging food and beverage
long-term goals of profit, quality, guest [Link] a majority of food and
satisfaction/loyalty, and employee retention and beverage customers may be hotel guests, it is
growth. important to book the right type of people into the
Perhaps the best way to describe this hotel. The sales mix of the hotel is a delicate
interaction is to characterize food and beverage balancing act. Sales staff must make sure they are
and other departments as mutually dependent. contracting groups that maximize hotel revenue
Direct interaction can be observed between food per available room (Revpar). Do you know the
and beverage and the front desk with respect to utilization rate of the food and beverage outlets
specific guest service issues. Direct interaction for the various market segments? Do business
can also be observed with the sales department travelers eat more or drink more than the
and the convention/banquet department. Indirect leisure/pleasure market? Which convention uses
interaction between departments comes from the food and beverage outlets more than others?
areas such as rooms, in the form of overnight The ballroom space must be managed closely to
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 11

ensure that the best business opportunities are generate word-of-mouth advertising from travel
maximized from the rooms and food and beverage agents, corporate meeting planners, cab drivers,
perspectives. Groups with high demand for airline companies, and tourism offices. While this
banquet space must meet room-night obligations reputation can attract guests, it is the
at a given rate and provide the necessary revenue responsibility of management to plan effectively
in catering. Local niche opportunities must be for their needs.
explored when there is an opportunity to sell the Imagine you run a hotel restaurant, operate
ballroom when hotel guests are not utilizing it. It room service, provide food and beverages for
is possible that local catering sales can be a larger employees, and now are also catering several
portion of the total catering dollars, particularly types of meals/functions for different groups.
when the rooms mix changes to a larger Recall that the goal of the hotel property is to
proportion of transient guests. Your management service its clientele. Therefore, each area of the
and sales staff must know the answers to these hotel must complement the other in providing the
types of [Link] personnel cannot just be service. Managers, particularly in food and
concerned with achieving room-night quotas or beverage,must communicate effectively and train
generating revenue; they must know the impact of constantly in order to maximize the goals of the
their decisions throughout the hotel and how they lodging operation.
affect its profitability. When developing annual
budgets, the team must take into consideration
seasonality, group business and its particular
OPERATING RATIOS
needs, transient guests, and regional events that Many operating ratios are utilized by the food
may affect guest occupancy and mix. and beverage department. Controlling operational
The food and beverage manager must know expenses is perhaps the biggest challenge facing
who the customers are and how many patrons to food and beverage managers. Managers at every
expect. Information about hotel guests such as level must be controllers. In addition, it is the duty
house counts, market mix reports, group of every food and beverage manager to maximize
commitment reports, and rival/departure patterns the revenue and profit potential of his or her
assists the food and beverage team in making specific unit. An empty seat cannot be resold
decisions on scheduling, food ordering, and later. If a restaurant has a significant drop in sales
whether or not to close a particular outlet. on a given day or time of year, a strategy must be
Every hotel employee is a sales agent for the developed and implemented to fill that void and
property’s food and beverage [Link] staff thus provide a new revenue source. Most hotels’
must be trained to refer and recommend hotel food and beverage operations have a minimum
services to guests. It is clear that the quality of fixed cost that must be maintained in order to
food and beverage operations can affect overall meet the needs of the hotel.
hotel operations and profitability. Quality is It is increasingly difficult to make a profit and
particularly important for convention hotels and provide high-quality service when revenue does
resort hotel properties. Guests come to such not support the labor necessary for even minimum
properties for specific purposes. Therefore, a levels. The challenge is to maintain a strong
reputation as a highquality food and beverage revenue flow so that efficiencies of scale take
operation will attract customers. These operations [Link] kitchen is the highest cost producer of
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 12

any part of the food and beverage operation. The Food and Beverage Sales per Available
challenge of the kitchen manager or chef is to Room
deliver a highquality product, yet maintain close
controls on food and labor costs. Total Food and Beverage Sales $ Number
The key for success in this area is to have a of Available Rooms
clear understanding of production management so
as to reduce waste and spoilage, create dynamic
Food and Beverage Occupancy
menus that drive business, and continue to build
an ongoing training program to instill the best
practices into line associates. In very large Number of Covers Turns Number of
establishments, the kitchen manager or chef may Seats
find himself or herself using a computer more Sales per Available Seats
than a knife.
A number of club managers the author Food and Beverage Sales $ Number of
recently spoke with noted that operating ratios are Available Seats
important to keep expenses in check, as well as to
monitor improvements or income contributions Average Check
from one area of the property to another. They
identified food cost and labor cost percentages as
Food and Beverage Sales $ Number of
most important. A casino hotel controller from
Covers
Las Vegas utilizes operating ratios such as cost
per cover, percentage of sales, cost per employee,
utilization rate (number of covers/number of Ratio of Beverage Sales to Food Sales
guests), revenue per occupied room, sales per
hotel guest, average check, sales per employee, Beverage Sales 100 % Food Sales
table turnover, inventory turnover, revenue per
square foot, revenue per seat, cost per square foot, Food Cost Percentage
return on investment, covers per employee,
average covers per day, and average sales per day. FoodCost 100 % Food Sales
Industry professionals note that ratios are only
tools and that it is more important to have a clear
Labor Cost Percentage
idea of what needs to be measured and the impact
of each variable on the overall operation.
What we can observe is that food and Food and Beverage Labor Cost 100 % Food and
beverage managers utilize ratios to determine Beverage Sales
whether or not they have been successful in
generating revenues and minimizing expenses. Note that costs are usually stated as a
Such ratios can then be compared with figures percentage of sales. These percentages can then
from prior accounting periods of that operation. be compared with those of previous time frames.
While the dollar values for costs are necessary to
Let us examine some of the more common ratios.
determine the percentages, it is difficult to
compare dollars to dollars expended per time
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 13

period. Measures of revenue often tell beverage managers are wise to study similar hotel
management how much effort food and beverage operations as well as restaurant operations. Guest
staff have expended for the benefit of the surveys are also essential to determining
[Link] ratios combining food and customer desires. Your objective should be to
beverages can be broken down by category. Note discover what customers want and need in terms
from the comments provided earlier that ratios of food and beverage products and delivery, and
utilized vary depending on the [Link] how your operation can better serve them.
goal as manager is to gain the best information Hilton Hotels has added to its Vacation
available to assist you in making decisions. Station [Link] provides children a canvas bag
Individual units, such as catering, room with an insulated compartment to hold lunch or
service, coffee shop, and sit-down restaurants, snacks, with a mesh-net drink holder on the side.
have different as well as similar factors. For Parents can order from a variety of Snack Pack
example, average check is common to all, while a selections via room service for pickup later.
measure of seat turnover applies only to the coffee Radisson Hotels and Resorts teamed with a
shop or the sit-down restaurant. The accumulation culinary school and supplier to create a low-
of information should be as easy as possible for carbohydrate menu. Sheraton Hotels has also
management. The use of point-of-sale technology introduced a Lo-Carb Lifestyle program in its
enhances this process. Technology can also be restaurants, banquets, room service, lounges, and
applied to storeroom management, including to-go snacks.
inventory controls and purchasing. Labor Holiday Inn Hotels and Resorts is testing use
management technology has contributed to of a wireless electronic menu that allows a
attaining optimal staffing guidelines based on customer to view a list of options updated in real
forecasts, group needs, and position time. The consumer can find related nutritional
qualifications. Use of the Internet is now a information while searching for information
standard tool in marketing strategy, where the about the hotel itself. Also in an experimental
guest may book a reservation directly online. phase is their new prototype restaurant, Kem’s
Managers should not spend all their time Café, named for founder Kemmons Wilson.
determining what the ratios are or what they Guests can use the e-menu to order from a choice
mean. Management should be able to quickly of comfort food.
ascertain what has occurred in the operation and Back at the Breakers Hotel in Palm Beach,
take corrective action, if necessary. management renovated their existing formal
dining and casual dining restaurants, developing
TRENDS IN LODGING single-theme outlets to give guests choice of
cuisine rather than choice dictated by guest attire.
FOODSERVICE This has led to stronger hotel restaurant identities
In presenting trends, we must exercise caution, as and an increased capture rate. Peacock Alley in
what works in one food and beverage operation New York’s WaldorfAstoria Hotel replaced
may not in another. Recall that the goal of lodging appetizers and main courses with a variety of
food and beverage operations is to meet hotel dishes of in-between portion sizes and added
guests’ desires, with attention paid to price, value, more wines by the glass and half-bottle to
quality, service, and atmosphere. Food and complement the expanded possibilities of the new
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 14

menu. This version of a tasting menu was One of the more exciting trends in lodging
developed in response to diners, who kept foodservice operations is in hotel beverage
substituting dishes from the regular menu. operations, specifically hotel bars. In many large-
The concept of branding has also affected city properties, hotel operators have found such
hotel food and beverage operations. For example, facilities to be considerable moneymakers—as
Country Inns and Suites has cobranded with much as 50 percent bar profit margin. These bar
established restaurant concepts (see Chapter 6.5 operations are clearly driven by the youth and
by Strate and Rappole).The restaurants average vitality of the new Internet, or millennial,
approximately 20 percent of their business from generation. The bars are seen as lively gathering
hotel guests, and this cooperative arrangement places where business and personal time merge.
eliminates the capital cost of building a restaurant Lodging chains are taking notice of such activity.
on [Link] has teamed with established Starwood purchased a stake in a company that
steakhouse chain operators The Palm and Shula’s initiated a popular bar chain. Even the names of
Steak House in its properties. Doubletree also the bar operations reflect a youthful vitality
developed specialty steakhouses, but with their associated with the location: Whiskey Blue,
own proprietary concept, Spencer’s. Skybar, and Whiskey Rocks. One concern
Another example of branding your own associated with these bar operations can be their
concept comes from the Riviera Hotel and impact on traditional hotel guests. Many
[Link] created Hound Doggies as an outlet outsourced bar operations do not extend
that targets the walking traffic on Las Vegas traditional amenities to lodging guests, such as
Boulevard (the Strip). The location is only a few billing to room, preferred seating, and even
steps off the sidewalk and has been successful in reservations. In fact, the clientele of the bar may
drawing nonstaying guests into the property. be quite different from the hotel guest.
They implemented this concept only after studies In order for your lodging food and beverage
identified walking traffic as a potential operation to succeed, sound marketing and keen
[Link] goal for the outlet was quite basic: observation of what people want must accompany
Bring people in the door. Through the use of a high-quality food and service. While consumers
1950s theme,high-quality food,and low prices,the choose your hotel for specific reasons, such as
Riviera has exceeded its expectation of price or service, they seek more creativity in a
nonstaying guests. As the unit was not created food and beverage operation. If you cannot attract
specifically as a revenue-generating center, the hotel guest, you will find that attracting
success is measured by its impact in other areas, clientele from the local area is also difficult. Quite
such as increased slot play. likely, each hotel has its own character that
Some Four Seasons Hotels and Regent Hotels suggests a variation of food and beverage
and Resorts are promoting the strategic use of a operations in different markets. Management is
single food and beverage outlet coordinated with wise to remember that a food and beverage unit in
the concept of cuisine choices. This strategy has a hotel serves the interests of the hotel as well as
resulted in a more focused approach. In properties its own.
where it is implemented, the strategy has resulted While some limited-service lodging
in significant capture rates as well as increasing operations have entered into cooperative
local traffic (nonstaying guests). relationships with foodservice companies,the
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 15

concept holds significant potential for the overall operations. Some larger hotel operations
appropriate market. One example is where the are focusing on a tighter menu and faster service
hotel’s foodservice operation is marginal at through room [Link] example,one property
[Link] lodging property can concentrate its has converted a freight elevator into a mobile
resources on rooms and lease the food and kitchen unit, thereby allowing service delivery
beverage service to an identifiable brand. Hotels within minutes of an [Link] this option may
should be aware, though, that restaurant not be possible for all hotels, it again points out
companies, for example, might not be familiar knowing what to offer your specific clientele.
with room service or catering. In an extreme case Room service has seen a resurgence in certain
of moving away from foodservice, some lodging lodging properties, primarily as a result of guest
properties limit services to in-room minibars and lifestyle. With more adults working and engaged
microwaves, with limited food items available for in active lifestyles, convenience and accessibility
sale in the gift shop. The gift shop may even be become paramount. Room service fits the criteria
transformed into a convenience store. of convenience and accessibility.
We have observed that some properties sense
a rebirth of simplicity in food and beverage
operations. A good example is a coffee shop.
CONCLUSION
Over the last ten years, the coffee shop concept As you can see from the foregoing discussion, it
has been abandoned in favor of higher-priced can be difficult to pinpoint which trends may be
dining. But in letting a coffee shop be a coffee most important to any individual hotel. What we
shop, you tap into the consumer’s consciousness can say is some lodging properties, notably chain
of value as well as menu variety and fast service. properties and large-size properties, seem to be
While some find the concept boring,consumers differentiating themselves to provide excitement
often seek the comfort of knowing they can get a for their food and beverage clientele. These
good meal at a good price day after day in your operations are essentially reinventing themselves
operation. in order to keep fresh and provide creative food
Room service is also seeing significant and beverage opportunities for staff and
changes. In some properties, the concept of room [Link] operations view foodservice as
service has been eliminated, while in others it has integral to the overall success of the lodging
been revived. For example, menus are limited to operation.
particular concepts, such as pizza or Asian food. On the other hand, we can also see a trend
Food items are packaged to appear as though they toward reduced or even nonexistent foodservice,
came from a freestanding restaurant. In some primarily in smaller properties and the lower-end
cases, the lodging property has an agreement with chain lodging properties. These operations view
a local restaurant to provide the room service. their business as strictly lodging and leave
Some lodging properties even list the room foodservice to someone else, now often a well-
service phone number under the name of the food known national brand restaurant.
item (for example,pizza).The key,again, is to It should be obvious from reading this
know your clientele. But the move to simpler overview that an emphasis on cost control is
menus, accompanied by lower prices, could bring likely a key strategy for lodging foodservices.
room service back as a major contributor to With increased competition from other
 Section 6.2 Managing Food and Beverage Operations in Lodging Organizations 16

foodservice operations, hotels are finding it more

difficult to generate revenues and increase
customer counts. Attention to value and service is
of significant concern to consumers. Managers of
lodging foodservice must utilize better control
tools, such as sound forecasting techniques and
menu analysis. Banquets, catering, and room
service hold the most potential for profit
generation in lodging foodservice. These
functions allow management the best opportunity
for accurate forecasting and staffing. Beverage
areas, such as lounges, continue to be profitable
despite a trend toward less alcohol consumption
throughout the population.
The probability of producing profit in hotel
restaurants depends on their type and size. There
is no reason why a hotel cannot do well, but
attention to detail is often lacking in some
operations. It is clear that lodging foodservice
offers managers unique challenges in the dynamic
world of foodservice management. Food and
beverage operations may not be the major focus
in a lodging property. However, they may have
significant impact on the customer’s perception
of the quality of the entire property. Therefore,
food and beverage operations in lodging
properties can serve to differentiate top
performers in the crowded lodging market and
enhance guest loyalty for the specific property.
 17

Section 6.3 As I See It: Hotel Director of Food and Beverage

6.3 AS I SEE IT: HOTEL DIRECTOR OF

FOOD AND BEVERAGE
Dominic Provenzano departmental managers to establish goals and
cover issues specific to each department.
A food and beverage director in a major lodging • (Monthly) Staff Meeting. Purpose: Review
property must be ready for a variety of tasks each operations by all department managers and
and every day. In one sense, this position requires general manager of the hotel.
two different individuals to keep the operation • (Monthly) Employee Recognition Meeting.
moving forward. One is the leader, or strategic Purpose: Honor employees of the month at a
visionary, looking ahead to the future of the luncheon.
operation (that may be just one or three months,or it
could be one full year out). The other is the day-to- To gain a better appreciation of the job of a
day manager, constantly moving through the director of food and beverage, we should look at an
organization to be sure all events are proceeding actual job description. Again, recognize that all job
according to plan and guests are treated beyond their descriptions are written as an ideal,and every day
expectations. brings deviations from that ideal, given the unique
In this position, I have the responsibility of daily circumstances found in any dynamic lodging
overseeing several departments: culinary, banquets, property.
room service, specialty and theme restaurants, and
all private bars. While an ideal day is spent on
planning, more often than not I find myself in Position: Director of Food
discussion with staff or guests. Regular meetings
include the following examples: and Beverage
• (Daily) Banquet Event Orders (BEO) Meeting.
Purpose:To go over BEO for the day. Reports to: General Manager
• (Weekly) Food and Beverage Meeting.
Objectives:
Purpose: Review operations with department
managers. 1. Meet and exceed guests’ needs and expectations
by ensuring proper service standards, providing
• (Weekly) Executive Meeting. Purpose:
quality food and beverages, and managing all
Overview operations with all executive
aspects of operations, resulting in an increasing
committee members and the general manager of
guest satisfaction index (GSI) and decreasing
the hotel.
guest complaints.
• (Weekly) One-on-One Meetings. Purpose:
Meet with individual food and beverage
 Section 6.4 Best Practices in Food and Beverage Management 18

2. Provide all guests with the highest quality food • Maximize sales potential through aggressive
and beverage experience by working as a team marketing of each F&B unit. Includes ongoing
with all food and beverage outlets ensuring monitoring of business levels and review of
prompt, courteous, and professional services, daily performance.
resulting in increasing employee morale, • Achieve budgeted sales and maximum
decreasing employee turnover rates, and profitability.
lowering employee service times.
• Maintain an appropriate level of community
3. Seek profitability in the food and beverage public affairs involvement.
department by decreasing all costs, maximizing
sales in all outlets, achieving budget and profit • Maintain fair wage and salary administration in
guidelines,creating promotions, and meeting the department in accordance with division
and/or exceeding long and short range goals. policy.

Specific Operations Functions:

• Provide the highest quality in food, beverage, Guest Relations
and service in all food and beverage outlets.
Includes at least one daily walk-through of all
food and beverage areas. A major part of my job involves maintaining warm,
• Maintain existing programs and develop new hospitable guest relations in all guest contacts and
programs ensuring the highest quality of food positive employee relations in a supportive
and service. Consists of daily talks with all staff environment. I also try to increase guest satisfaction
and managers, reviewing plate-ups in different index scores (our feedback mechanism) and to
outlets. lower guest complaints by ensuring prompt,
courteous, and proper service and surveying guest
• Maintain a high-quality hotel image through
comment cards to correct negative situations
effective housekeeping and sanitation in the
immediately.
F&B operation.
It is also important to ensure that my division is
• Maintain physical security for all F&B property operating in compliance with all local, state, and
and inventories. federal laws and government regulations. To assure
• Maintain knowledge of local competition and that our guests have a quality stay, I am also
current industry trends. Includes changing responsible for communicating effectively within
menus based on seasonality, product and between departments, ensuring good safety
availability, and input from staff. practices of employees and performing special
projects as requested.
Specific Management Functions: In trying to achieve or exceed budgeted sales
• Direct and coordinate the activities of all goals, our division management team constantly
assigned personnel and departmental seeks ways to operate within budgeted guidelines by
[Link] are daily contacts maintaining effective [Link] includes
with staff and performance reviews. developing and forecasting accurate and aggressive
long- and short-range financial objectives and
 Section 6.4 Best Practices in Food and Beverage Management 19

monitoring them through daily, weekly, monthly, development of staff associates, and it is among my
quarterly, and annual reviews of our performance. responsibilities to find ways to provide for this.
As you can see, the job of a hotel food and
General Functions beverage director requires a high-energy person
who loves working with people in a variety of
dynamic situations. The ability to lead a group of
I am expected to perform special projects as employees in pursuit of operational goals is
requested and to maintain a high level of paramount. Students should actively seek
professional appearance, demeanor, ethics, and experiences in their college career that provide
image of subordinates and myself. Part of our opportunity to learn the skills mentioned in this
culture in this hotel concerns professional article.
Judy A. Siguaw and Cathy A. Enz selected via an intense screening process are The
Boulders, The Breakers, Country Inns & Suites,
One critical attribute of successful hotel food and Four Seasons & Regent Hotels & Resorts,The

6.4 BEST PRACTICES IN FOOD AND

BEVERAGE MANAGEMENT
beverage outlets is their ability to appropriately Greenbrier, Hyatt Arlington Hotel, The Pierre, Walt
respond to the changing needs of the market while Disney World Resorts and Theme Parks,The
maintaining a profitable operation. Yet few hotel Waldorf-Astoria,and Wyndham Hotels and Resorts
food and beverage outlets excel at this fundamental (see Table 6.1). Through their best practices, this
strategy. Instead, generic restaurants that provide select group demonstrates the capability of
undistinguished menu items and offer guests a poor executing the strategic mandate of making money
value-for-money proposition frequently while responding to the needs of their target
characterize hotel food service. Such hotel markets through revitalized food and beverage
restaurants fail to provide menu choices, ambience, operations.
or service desired by the dining-out market (let In the following pages we first present the
alone their guests), and therefore they frequently several practices that have been used by our food
operate at a loss. Indeed, some analysts have and beverage champions to provide their outlets
declared that hotel restaurants by their nature will with a competitive advantage. We then examine the
lose money (Hanson, 1984). measures of success and report the advice our
Recently, as part of a large, comprehensive champions give others on how to prosper with hotel
study on best practices in the United States lodging food and beverage service.
industry conducted by Cornell University’s School
of Hotel Administration (Dubé et al., 1999), we THE BEST PRACTICES
identified a group of best-practice food and
beverage champions that had developed practices to
successfully accomplish the strategic charge of
profitably meeting customer needs. The champions
 Section 6.4 Best Practices in Food and Beverage Management 20

Table 6.1 Overview of Food and Beverage Best-Practice Champions

F&B Champions Practice Initiated, Developed Measure of Success

The Boulders Food forager to improve quality Increased food quality, decreased food cost,
of restaurant offerings decreased waitstaff turnover, and increased prices,
profits, and waitstaff gratuities
The Breakers Single-theme restaurant concepts Increased revenues

Country Inns & Cobranding of hotel and Increased customer satisfaction, reduced hotel
Suites brand-name restaurant capital cost (from not building a hotel restaurant),
increased lunch and dinner business
Four Seasons & Single dining venue with broad Boosted capture rate of hotel guests; increased
Regent Hotels & cuisine choices (and two dining local patronage, labor cost savings
Resorts rooms)

The Greenbrier Establishing resort as a center Maintained occupancy and reputation, retained
for culinary excellence, including skilled kitchen staff, increased off-season

a culinary-apprentice program business

Hyatt Arlington Reconceptualization and Doubled revenues and cover counts, received
Hotel redesign of dated dining room, sports rave reviews
bar, and lobby lounge
The Pierre Independent consultant made Decreased food and kitchen labor costs, reduced
responsible for food purchases number of vendors
(with preferred-vendor program)
The Waldorf-Astoria Applying revenue-management Doubled cover counts, increased effectiveness of
practices in all F&B outlets F&B marketing, improved customer satisfaction
(plus staff training)
Walt Disney World Restaurants designed to provide Achieved high customer satisfaction and
Resorts and Theme a touchable experience return rate
Parks
Wyndham Hotels Upgrade of organization’s food Achieved higher average checks, increased staff
and Resorts and beverage culture earnings and retention, increased total sales, wine
sales, and profits

The best practices adopted by our champions can be Country Inns & Suites, Four Seasons & Regent
broadly categorized into three areas. One group Hotels & Resorts, The Greenbrier, and Wyndham
stresses providing a high-quality F&B product to Hotels
their guests (comprising practices by The Boulders,
 Section 6.4 Best Practices in Food and Beverage Management 21

and Resorts).A second group emphasizes the and Theme Parks). Finally, The Pierre’s and The
elements of restaurant concept and design in their Waldorf-Astoria’s best practices focused primarily
best practices (namely, The Breakers Hotel, Hyatt on controlling costs and generating additional
Arlington Hotel, and Walt Disney World Resorts revenue (see Table 6.2).
Table 6.2 Food and Beverage Best-Practices Cases, Descriptions, Implementation, Contact People

F&B Champion, Method of

Title of Case Description of Case Implementation Contact Person

The Boulders Created position of food Forager first focused on Gray Ferguson,
Food Forager to Improve forager to obtain the best buying the highest-quality food and beverage director
Quality in F&B fresh products, allowing produce only within the

creativity in the kitchen. state of Arizona, where the 602-488-9009

resort is located. Later, the Fax: 602-595-4664

forager broadened the search
and expanded the number of
items sought. Forager hotline
keeps all F&B outlets apprised
of incoming supplies. Menus
are restructured around the
products the forager finds.

The Breakers Replaced formal dining Transformed old-fashioned Joanne Schultz,

Annual Food and and casual dining formal dining room into a director of food and
Beverage Staff restaurants and bars with modern, Florentine beverage
Reorganization and single-theme outlets to give restaurant; casual restaurant

Single-theme Restaurant the guest the choice of the into a top-caliber steak- 561-659-8434
Concepts cuisine desired rather that house; main bar into an Fax: 561-659-8452
the choice dictated by oceanside restaurant; and

guest attire. a Victorian restaurant into a

southern Italian pasta house;
plus opened a French
Riviera–style restaurant.

Country Inns and Suites Developed cobranding Seeks an “A” location that Paul Kirwin,
Successful Cobranding strategy to locate Country provides visibility, president
with Established Inns and Suites adjacent to convenience, high traffic

Restaurant Concepts (co-owned) T.G.I. Friday’s count, and proximity to 612-212-1326

 Section 6.4 Best Practices in Food and Beverage Management 22

or Italiani’s. dense residential areas for the Fax: 612-212-1338

restaurant. Positions restaurant
at forefront of property.
Table 6.2 (Continued)

F&B Champion, Method of

Title of Case Description of Case Implementation Contact Person

Four Seasons and Regent Uses only one F&B outlet Single outlet allows for a Alfons Konrad,
Informal Dining Venue with two dining rooms. focused approach for senior vice president,
and Alternative Cuisine Provides cuisine choices of improving food quality and food and beverage
Alternative Cuisine, presentation, grasp of small

homestyle, and vegetarian details, and delivering of 416-441-4306

options. higher service levels due to Fax: 416-441-4381

small, qualified staff.
Alternative cuisine was
developed in response to a
need for healthier items,
homestyle cuisine was added
for frequent travelers who
were tired of traditional
restaurant food, and
vegetarian was added due to
increased trend of
vegetarianism among guests.

The Greenbrier Instituting a formal Established relationships Rod Stoner,

Programs Establishing the culinary apprentice program, with principal culinary vice president of food and
Resort as a Center for a culinary school for guests, schools in the United States. beverage
Culinary Excellence conferences and seminars Opened formal three-year

with food critics and writers, apprentice program to 304-536-1110

and a high school culinary- graduates of two-year Fax: 304-536-7860

training [Link] culinary schools or

publishes The Greenbrier individuals with equivalent

Cookbook and sends experience. Successful

newsletters to 600,000 applicants work in all areas

guests. of the hotel’s kitchens and

attend formal classes. Promises
permanent employment to
applicants from local high
school.
Hyatt Arlington Hotel Dated dining room, sports Comprehensive research George Vizer,
Redesigning and bar, and lobby lounge were and analysis indicated likely general manager
 Section 6.4 Best Practices in Food and Beverage Management 24

Revitalizing a Food and reconceptualized into success of a fusion of

Beverage Outlet Mediterranean cuisine contemporary and 703-525-1234

restaurant. Mediterranean themes. Floor- Fax: 703-875-3298
to-ceiling windows replaced
one side of building, and
martini bar complemented
redesigned restaurant.

256
Table 6.2 (Continued)

F&B Champion, Method of

Title of Case Description of Case Implementation Contact Person

The Pierre Has given financial The consultant and . Franz Klampfer,
F&B Cost-Plus responsibility for food executive chef write executive chef
Purchasing Agreements purchasing to an specifications for food
independent consultant. products; consultant 212-838-2000
negotiates contracts with a Fax: 212-826-0319
single vendor in each food category on a
percentage markup basis. Consultant audits the
vendors’ books annually.

The Waldorf-Astoria Instituted revenue Each unit developed a plan Christophe Le Chatton,
Revenue Maximization for management for all food to increase revenue and director of food and
the Food and Beverage and beverage outlets, profitability, with a focus beverage
Department scheduled staff more on reducing labor costs.
efficiently, and repositioned Matched staffing levels with 212-355-3000, ext. 4804

outlets to attract non-hotel expected volume of business. Fax: 212-872-7272

markets. Trained line staff to ensure the

highest level of service.
Walt Disney World A touchable dining Theme restaurants are Dieter Hannig,
Providing a Touchable experience is provided via designed to be as authentic vice president of
Dining Experience the atmosphere and the as possible in the decor, food and beverage
food to transport guests to menu, beverages, and

another setting, another service. Line-level 407-566-5800

country, or another culture employees are empowered Fax: 407-560-9131

while they dine. to make decisions with respect

to service recovery.
Wyndham Created “Best of Class” Reengineered menus and Patrick Colombo,
 Section 6.4 Best Practices in Food and Beverage Management 25

An Integrated Approach program to upgrade the recipes; reconceptualized vice president of

to Food and Beverage food and beverage culture. restaurants; modified dining food and beverage
rooms and introduced exhibition concepts
kitchens;
upgraded tabletops and 214-863-1000

uniforms, and china, glass, Fax: 214-863-1665

silver, and specialty
merchandise; developed
seasonal F&B festivals and
promotions; promoted F&B
Table 6.2 (Continued)

F&B Champion, Method of

Title of Case Description of Case Implementation Contact Person

products within the hotels;
recruited culinary talent;
obtained unique product from
vendors; implemented wine-
by-the-glass program;
developed server-training
program emphasizing product
knowledge and upselling;
implemented waitstaff
incentive programs; and
reinvented room service
standard operating procedures.

Note: The case titles correspond to the cases written on each champion in: Laurette Dubé, Cathy
A. Enz, Leo M. Renaghan, and Judy A. Siguaw, American Lodging Excellence:The Key to Best
Practices in the U.S. Lodging Industry (Washington, D.C.:American Express and the American
Hotel Foundation, 1999). food ingredients. The resort’s management
responded by creating the position of food forager,
who initially focused on buying high-quality
produce locally (i.e., in Arizona). Later, though, the
forager traveled farther afield and took on the
FOCUS ON PRODUCT additional responsibilities of purchasing spices,
QUALITY shellfish, cheeses, and meats. To keep the kitchen
apprised of what items are coming, the forager uses
The problem for The Boulders was that the variety a hotline to report expected delivery dates and
and quality of the produce it was obtaining were not expenditures. The Boulders’ chefs then adjust
up to the resort’s high standards. As a result, the menus based on the incoming items. Consequently,
food and beverage department’s culinary passion the food ingredients are of the highest quality, and
seemed to be declining along with the quality of the
 Section 6.4 Best Practices in Food and Beverage Management 26

the chefs have the chance to experiment with a 13. Revised in-house marketing materials, such as
continuously changing menu. menus and in-room directories.
Also seeking to instill a passion for food and
To deliver high-quality food and beverage
beverage, Wyndham Hotels and Resorts designed products to its guests, Country Inns & Suites chose
its “Best of Class” program, with the overall to develop a cobranding strategy with restaurant
objective of making Wyndham a leader in food and
brands that are co-owned by Carlson but
beverage innovation, quality, and [Link] Best freestanding, primarily T.G.I. Friday’s or Italiani’s.
of Class was a wideranging effort that involved both
This practice ensures the guest access to a high-
sides of the [Link] chain: quality, brand-name restaurant on site, but it
1. Reengineered menus and recipes. eliminates the capital cost of building a generic
restaurant in the hotel. While the core concept of
2. Reconceptualized its restaurants.
locating a limitedservice hotel adjacent to a
3. Modified dining rooms and introduced display restaurant is not new, Carlson’s approach to the
kitchens. strategy is innovative, since it owns all the brands
4. Upgraded tabletops, waitstaff uniforms, (another brand that expressly pursued a strategy of
china, glass, silver, and specialty locating next to restaurants in the 1980s was Days
merchandising pieces. Inns). To implement this cobranding strategy,
5. Developed seasonal food festivals and Carlson seeks a large, “A” location that will support
beverage promotions. the restaurant, which is built at the forefront of the
property for visibility. Both the restaurant and hotel
6. Promoted F&B products within the hotels. benefit from this arrangement.
7. Recruited outstanding culinary talent. The goal of Four Seasons hotels is to be rated
8. Collaborated with food vendors to obtain as having one of a given city’s top three restaurants.
distinctive products and with wine vendors to To achieve this goal the chain offers a single
upgrade wine lists and conduct tastings. restaurant in its hotels—but that restaurant has two
dining rooms, one more formal and one less
9. Implemented a wine-by-the-glass program
[Link], with a single F&B outlet the hotel can
using premium varietals with high brand
offer two dining rooms that differ in design, but that
awareness.
share the same menu, chefs, line cooks, and
10. Developed a server training program that kitchens. Compared to having multiple outlets, this
emphasizes product knowledge and upselling approach allows its F&B staff members to provide
techniques. greater attention to food quality and presentation, to
11. Implemented incentive programs designed to focus on small details, and to deliver higher service
motivate servers to become better educated levels via a small,highly qualified staff. In response
about food and wines being served. to guests’ stated desire for alternatives to a heavy,
12. Reinvented room service procedures by meat-based cuisine, Four Seasons has broadened its
providing training in proper service etiquette, menu choices to include its trademark Alternative
modifying training videos and manuals, and Cuisine, comprising a nutritionally balanced menu
upgrading equipment. of alternative meals, vegetarian dishes, and
 Section 6.4 Best Practices in Food and Beverage Management 27

homestyle preparations. Alternative Cuisine items as a culinary center—and to remain in contact with
are low in fat, cholesterol, sodium, and calories to potential guests.
correspond with guests’ greater interest in health
and fitness. Similarly, vegetarian recipes have been RESTAURANT DESIGN
added to the menu in response to an increased trend AND
of vegetarianism among guests. Homestyle recipes,
on the other hand, are just what the name CONCEPTUALIZATION
implies:they have been developed from the chefs’ The common thread of the following cases that
favorite family recipes. The latter cuisine choice feature restaurant redesign is that the existing
suits travel-weary guests who wish for a restaurants were operated in a functionally
homecooked meal. competent fashion. They had lost their competitive
The Greenbrier has instituted several practices spark, however (or stood in danger of doing so),
to establish itself as a center for culinary because of changes in guests’ preferences. In
[Link] resort had to address two major response, operators took a lead from freestanding
problems, both of which stemmed from its remote restaurants and focused tightly on customers’
location. First, for a time the resort was having current wishes for theme-based casual dining.
difficulty attracting and retaining experienced
The Breakers recognized that the public has
culinary personnel. To end a constant cycle of
long had an aversion to hotel restaurants, which
recruiting and training workers and to improve the
stems from the days when hotel restaurants tried to
food product being offered to guests, The have some of every variety of food they thought a
Greenbrier established a three-year
guest might desire—none of it particularly
culinaryapprenticeship program. The resort recruits
distinguished and all of it seemingly overpriced. In
candidates from principal culinary schools in the
response to guests’ negative feelings about hotel
United States to complete an apprenticeship in all
restaurants, many hotels have dropped food service
areas of the kitchens, as well as attend classes.
entirely, but this option is not open to a five-star
Because the program runs for three years, the
hotel or resort. Instead, The Breakers chose to
apprenticeship has helped to stabilize the kitchen
create its own strong restaurant identities through
staff. Further stability comes from an agreement
single-theme outlets that replaced the resort’s
with the local high school by which the resort will
existing formal- and casual-dining restaurants and
provide permanent employment to interested
bars. The practice not only helped The Breakers
students. The second problem is attracting guests
change the public perception of hotel restaurants,
during shoulder and off-season times. Continuing
but it allowed guests to choose their cuisine
with its theme of culinary education, The
according to what they wanted to eat, rather than
Greenbrier established cooking classes for guests
what they wanted to wear. Thus, the resort’s
and promoted symposiums conducted by food
oldfashioned formal dining room became a modern,
critics and [Link] Greenbrier issues a quarterly
Florentine-style gourmet restaurant. The owners
newsletter to 600,000 guests and has published The
converted the former casual dining room to a top-
Greenbrier Cookbook to further identify the resort
caliber steak house—with ambience to match.
Perhaps most strikingly, the resort converted its
 Section 6.4 Best Practices in Food and Beverage Management 28

main bar and lounge, which had virtually no authentic as possible so that all elements of the
business during the day, to a beautiful ocean-side physical facility and operations combine to
seafood [Link] former Victorian restaurant transport the guest to another setting, country,or
became a Southern Italian–style pasta house, and [Link] dining adventure is intended to produce
the Beach Club was converted to a French Riviera– the feelings, tastes, sounds, and excitement the
style [Link], the resort now has five guest would experience at the actual locale being
restaurants that feature their own distinctive decor replicated. Access to the restaurants is designed to
and ambience, without a loss in food quality. be easy and uncomplicated. Accordingly, many
The food and beverage outlets of the Hyatt restaurants are freestanding so that guests do not
Arlington Hotel similarly had lost their customer have to walk into hotel lobbies or down corridors.
appeal because of their dated concept and design. Further, line-level employees are empowered to
After the hotel undertook a comprehensive market- make decisions to improve service recovery and
research study, the hotel’s managers selected a ensure a great dining experience for the guest.
restaurant theme that blends contemporary
(postmodern) and Mediterranean concepts. In CONTROLLING COSTS
developing the new theme, the hotel replaced the
restaurant’s outer wall with floor-to-ceiling Our last two champions focused on costs and
windows to transform the previously dark and revenues in the food and beverage [Link] Pierre
unimaginative restaurant into a sun-drenched venue focused on upgrading its restaurant’s purchasing
splashed with the Mediterranean’s vivid colors. To function—that is,setting specifications, selecting
complement the new restaurant, the hotel installed a vendors, obtaining best prices, and monitoring
quintessential martini bar. receiving. However, The Pierre’s management was
Walt Disney World Resorts and Theme Parks concerned that controlling purchasing activities
has long recognized the value of themes to a guest’s would divert the executive chef’s attention from the
experience—not only in its parks, but also in its kitchen’s culinary [Link] allow the executive
many restaurants. Consequently,WDW set out to chef to focus on the menu the hotel delegated
create a “touchable” foodservice experience for the financial responsibility for food purchasing to an
guest that combines design, decor, ambience, food, independent consultant, who worked with the chefs
service, and entertainment in such a way as to to develop specifications for all food products. The
stimulate all of the senses, not just the palate. The consultant analyzes available foodstuffs and may
idea is to “offer a personal experience which is recommend changing specifications if a less
highly customized, memorable, and judged by our expensive item can be substituted without
guests to be worth the price,” remarked Dieter comprising quality or when off-site preparation
Hannig, vice president of F&B. would be equally good but less expensive than
With more than 500 theme food-andbeverage preparing the food item on site. The consultant also
outlets, WDW’s managers realized that a trained kitchen employees to adhere to strict
restaurant’s design is crucial to providing the receiving standards. Most important to cost control,
“touchable” experience for the guest. Each the consultant negotiated contracts with each
restaurant is designed to be as thematically vendor specifying that the vendor would earn a
 Section 6.4 Best Practices in Food and Beverage Management 29

given percentage profit over its cost. (Some existing forager program at The Boulders, for instance,
vendors may have blanched at this proposal, but improved the quality of the food and lowered food
most signed on to keep the hotel’s business.) To costs. With new and interesting foodstuffs, the chefs
ensure that costs are in line and that vendors are have developed distinctive menus that allowed
fulfilling their agreements, the consultant regularly price increases—boosting average checks and
audits inventory and cost lists from each vendor and profits. As a result of the increased average check,
annually audits the vendors’ books to verify that the waitstaff gratuities are higher and employee
vendors are accurately stating the cost of each item. turnover has been reduced. The resort also
The Waldorf-Astoria’s management also implemented menu meetings in which chefs explain
believed that the revenue potential of the hotel’s their creations to servers. Chefs are once again
foodservice operations was not being achieved, but passionate about their creations, and the meetings
they looked beyond cost controls. Instead, the hotel have created a greater rapport between the front and
took several steps to boost F&B revenue— back of the house.
instituting a revenue management program, Wyndham’s “Best of Class” program also
implementing costcutting measures, training chefs reenergized the chain’s F&B culture—resulting in a
to schedule employees more efficiently, and 15 percent increase in total sales and a 40 percent
repositioning F&B outlets to attract guests from increase in wine sales. Since costs were controlled
outside the hotel. The hotel created a marketing as part of the program, the hotels enjoy a 55 percent
position to coordinate the marketing efforts of all profit flow-through on the newly generated
food and beverage units and to help implement revenue. As at The Boulders, Wyndham’s higher
revenue-maximization efforts. Service recovery average checks have increased staff earnings and
systems were [Link] hotel trained line improved retention. In addition, the promotion of
employees on wines to improve their efforts in highquality food has upgraded the chain’s overall
selling and serving wines. A new restaurant image.
reservations system was introduced to improve At The Breakers the new theme restaurants
dining-room use, cut telephone use in restaurants, have increased F&B revenue by 70 percent over the
and improve communication with guests. Lastly, a last four years, with much of the growth being
diningout program, which allowed servers and fueled by the substantial amount of local business
kitchen employees to dine in various attracted by the new outlets. Likewise, the Hyatt
WaldorfAstoria restaurants, generated many ideas Arlington Hotel has doubled cover counts and
WALT DISNEY WORLD’S F&B AWARDS: A SAMPLING
for improvement and created an increased revenues since its restaurant renovation, and the
awareness of food and service quality. restaurant receives rave reviews.
SUCCESS OF THE Since 1989, Walt Disney World properties have
PRACTICES earned more than 100 food and beverage awards.
Listed below is a representative sample of those
The success of these practices can be gauged by
honors.
various indices, depending on the practice. The food
 Section 6.4 Best Practices in Food and Beverage Management 30

• “Award of Excellence” (1999), fromWine • “Best Cover” (1998), from Restaurant

Spectator magazine, awarded to Victoria & Forum, awarded to Flying Fish Cafe.
Albert’s. • “Restaurant Wine Award” (1995),from
• “Best Wine and Spirits Restaurant ofthe Wine Enthusiast, awarded to Artist Point.
Year” (1999), from Santé magazine, awarded to • “Most Imaginative” (1993), from
California Grill. theNational Restaurant Association, awarded to
• One of the “Top Ten Sports Bars inthe Grand Floridian Café.
Country” (1998), from USA Today, and one of the • “America’s Best Bar Menu” (1993),from
“Top Five Sports Bars in the Country” (1998), from Cheers magazine, awarded to Crew’s Cup Lounge.
Men’s Health, both honors awarded to ESPN Club.
• “Top of the Table” (1991, first place),from
• “Best Kid’s Menu” (1998, Readers’Choice Restaurant Hospitality magazine, one each awarded
Foodie Awards), from Orlando Sentinel, awarded to Beaches and Cream Soda Shop and the Yacht
to Chef Mickey’s. Club Galley.
• Among the “Best New Restaurants”(1998),
from Esquire, awarded to Citricos.
One of many reasons that guests choose to stay function,The Pierre was able to reduce food costs
at The Greenbrier is its excellent culinary by approximately 5 percent and kitchen labor costs
reputation. Thus, its reputation as a center for by 2 percent. In addition, the number of vendors
culinary excellence plays an important role in used has decreased, resulting in greater efficiency
maintaining guestroom [Link] ability of for the hotel. Finally, The Waldorf-Astoria’s
Walt Disney World Resorts and Theme Parks revenue maximization strategy improved cover
restaurants to provide a “touchable” dining counts by a staggering 100 percent, while
experience contributes significantly to WDW’s increasing wine sales and guest satisfaction.
profitability. Furthermore, both the number of
return guests and percentage of satisfied customers
are high—and several WDW restaurants have won
INSIGHTS
awards in recent years (see sidebar). Our food and beverage champions offer the
The Country Inns & Suites cobranding strategy following advice and observations to managers
has been a winning situation both for the hotels and seeking to implement similar programs:
for guests. For guests, having a popular brand-name
1. The foundation for successful implementation
restaurant adjacent to the hotel ensures that their
is meeting challenges with enthusiasm and
dining needs will be satisfied. For the restaurant, the
passion.
hotel guests account for 15 to 20 percent of its
business. For the hotel, the proximity of a 2. Some practices, such as food purchasing by an
namebrand restaurant is an amenity that can independent consultant, may not be warmly
encourage guests to book a room. received by staff or vendors, but the
By using an independent consultant to negotiate commitment of upper management and a
with vendors and to monitor the F&B purchasing demonstration of benefits will help gain
acceptance.
 Section 6.4 Best Practices in Food and Beverage Management 31

3. Those practices that require constant adaptation practices of other properties and other industries. As
(like the food forager) will not work in a rigidly a result, forward-thinking managers will be able to
structured organization. identify those best practices that will serve as the
4. Cobranding strategies are suitable only when catalyst for improving customer satisfaction and
the hotels are partnered with restaurants that are financial performance.
targeting the same market segment.
5. Hotel F&B outlets’ development must
incorporate the guest’s total experience (and
focus on competing with freestanding
restaurants).
6. Resources must be focused on a relentless
commitment to food and beverage consistency,
even when business is slow.
PROFITABLE AND VITAL
Contrary to much conventional wisdom, the
experience of these F&B champions shows that
hotel restaurants can not only turn a profit but can
contribute greatly to the hotel’s overall competitive
position. We note, however, that virtually all the
F&B champions are operating in the upscale,
deluxe, and resort segments of the lodging
[Link] many hotel restaurants at all levels
struggle to turn a profit, the actions of our
champions indicate that focusing on guests’ needs
can radically reverse the downward trend of hotel
restaurants. As Rod Stoner, vice president of food
and beverage at The Greenbrier, pointed out,
managers must stay abreast of industry trends, study
the programs of other properties, and seek
distinctive ideas for adaptation to their own hotels.
This overview of best practices in food and
beverage champions provides a starting point for
what Stoner [Link] hope that those managers
seeking to revitalize or maximize the revenue
potentials of their F&B operations will carefully
examine the practices discussed here and will
continue their progress by also investigating the
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 32

6.5 STRATEGIC ALLIANCES BETWEEN HOTELS AND

RESTAURANTS
Robert W. Strate and Clinton L. Rappole correct F&B concept to the target market for which
the hotel has been positioned. We will identify key
Over the years hotel restaurants have often been criteria for establishing a seamless partnership
managed as a secondary function of the hotel—that between the hotel and the restaurant. The results of
is, as a costly amenity rather than a revenue center. such a marriage should be an improved property
In part because of the high cost structure of hotel image overall, enhanced customer value, increased
restaurants, which means high prices relative to revenues, and a competitive edge. The following
other restaurants, they developed among potential four main topics will be addressed:
customers a reputation for being a poor value, • The value of a brand-name partner
offering indifferent service and inferior food.
• Existing hotel-and-restaurant alliances
Today, however, many hotel companies are
rethinking how to integrate food and beverage • A description of Bristol Hotel Company’s
services into lodging facilities. In the process of alliance with Good Eats Grill (including
doing so, hotel owners and operators are asking at critical-decision elements)
least four key questions about their property-level • Future trends
F&B service.
• What are the hotel customers’ food and ALLIANCES
beverage needs and expectations?
Developing alliances between brand-name hotel
• Which food and beverage concept best aligns
with the positioning of the hotel? and restaurant companies is not a new business
strategy, but it does seem that this approach is
• Would converting the hotel’s restaurant to a currently being used more frequently than ever to
brand-name restaurant concept improve the help companies maximize their profit potential
property’s overall bottom line? (Lodging, September 1995). There are at least five
• Would turning to a brand-name F&B operation reasons for [Link] alliance may:
give the property a competitive edge?
1. Create financial benefits.
Two results of owners’ and operators’ new 2. Provide customers with greater value.
focus on hotel food service are that (1) innovative
3. Improve a property’s overall image.
hotel F&B concepts are being created, and (2)
strategic alliances are being established between 4. Strengthen an operation’s competitive position.
well-known brand-name hotel and restaurant 5. Create operational advantages.
companies. One of the first branded restaurant concepts to
The primary focus of this article is to answer operate in hotels was probably Trader Vic’s,
the four questions stated above and provide the founded by Victor Bergen in 1937. By 1949
basic decision-making framework for matching the Western Hotels (which became Westin) integrated
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 33

Trader Vic’s into 13 hotel-based restaurants in nine travelers both food and lodging. The Marriott
countries (Withiam,1995a, 14). Other chains also Corporation is a good example of a hotel company
hosted the restaurants and today, 60 years that has used this strategy of going it alone. John
later,Trader Vic’s still operates in such hotels as the Randall, Marriott senior director of food and
Beverly Hilton, the Palmer House (Chicago), the beverage concepts, states that it is Marriott’s
Table 6.3 Hotel and Restaurant Company Strategic Alliances
Hotel Companies Restaurant Companies

Holiday Inn Worldwide

Damon’s, Denny’s, Ruth’s Chris Steakhouse,T.G.I. Friday’s, Convenience
Courts (Mrs. Fields, Little Caesars, Blimpies,Taco John’s, Sara Lee)
Doubletree Hotel Corporation New York Restaurant Group (Park Avenue Café, Mrs. Parks Café)
Marriott Hotels Ruth’s Chris Steakhouse, Studebakers, Benihana,Trader Vic’s, Pizza Hut
Hilton Hotels Trader Vic’s, Benihana, Ruth’s Chris Steakhouse, Damon’s
Four Seasons Bice Ristorante
Choice Hotels Picks Food Courts, Pizza Hut
Promus Corporation Grace Services,T.G.I. Friday’s, Olive Garden, Pizza Hut
Radisson Hospitality Worldwide* Carlson Hospitality* (T.G.I. Friday’s, Country Kitchen), Damon’s

*The relationship between Radisson Hospitality Worldwide and Carlson Hospitality is not an alliance per se
but rather an example of a hotel company that owns and has vertically integrated both its lodging and
foodservice products into one corporation.
Sources: See “Restaurant Chains Partner with Hotels to Satisfy Different Needs,Tastes,” Lodging, September 1995, pp. 1, 8–
9;“Holiday Inn Offers Assorted Food Options with New Quick Food Concept,” Hotel Business, June 1996, p. 9;“Holiday Inn
Offers Convenience Court Concept,” Nation’s Restaurant News, May 1996, p. 208; Frank H. Andorka,“High Recognition
Restaurants,” Hotel & Motel Management, November 1995, pp. 43–44; Cherie Hensdill,
“Partnerships in Dining,” Hotels, February 1996, pp. 57–60; Judy Liberson,“A Working Marriage,” Lodging, February 1996,
pp. 63–66; and Madelin Wexler,“Partnerships That Pay Off,” Hotels, May 1995, pp. 47–50.
Marriott Royal Garden Riverside (Bangkok), and primary strategy to “completely manage our own
the New Otani properties in Tokyo and Singapore. F&B services to provide food, service, and quality
Ruth’s Chris Steakhouse is another example of a consistency from property to property” (Hensdill,
popular restaurant brand operating successfully in 1996).
unison with hotels, including properties operated by The strategy of developing their own F&B
Hilton, Marriott, Holiday Inn, and Westin. concepts has not been successful for all hotel
Despite the evidence of successful alliances companies. This is evident from the fre-
between brand-name hotel and restaurant
companies, most hotel companies manage their
own food and beverage services, including those
that also host Trader Vic’s. In part that approach
reflects the long industry tradition of offering
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 34

quent “reconcepting” found among hotel

restaurants. A hotel might run a lounge one year,
BRISTOL AND GOOD
convert it into a brasserie the next year, and later EATS GRILL
decide to make it a [Link] end result is
inconsistency in F&B service and quality, and To comprehend fully the rationale and advantages
therefore low sales and profits (Parseghian, 1996). of a hotel’s decision to turn to a brand-name
Several factors may contribute to a general restaurant for the hotel’s foodservice, we analyzed
manager’s believing that she or he can operate the the Bristol Hotel Company’s decision to match two
hotel’s restaurant services better than a branded of their hotels with Good Eats Grill (Withiam,
restaurant company, not the least of which may be a 1995b, 13). Before creating the alliance with Good
sense of self-assurance. Some hotel general Eats Grill, the Bristol Hotel Company’s primary
managers want to prove that they can provide a fine- F&B strategy was to use its own internally
dining experience whether or not a market actually developed restaurant brands. This is a strategy that
[Link] say it is because some hotel F&B has worked well for Bristol—for example, eight
operations continue to try to be all things to all outlets produced 32.4 percent F&B profit margins
people rather than providing a product that is in 1995, and 20 out of 22 Bristol hotel-restaurants
affordable and matches customer expectations continue to use their own internally developed
(Wolff, 1995, 24). Moreover, hotel restaurants in restaurant brands.
general have a high cost structure relative to the Despite the success of Bristol’s own F&B
freestanding F&B operation down the street. Hotel operations, the firm decided to link two of its
restaurants have to contribute to the overall properties (Holiday Inns in Jackson, Mississippi,
property’s expenses while the restaurant next door and Houston, Texas) with a franchised restaurant
has little capital expense and is probably just leasing brand called Good Eats Grill—a concept developed
square footage. by Gene Street, who also developed the Black Eyed
A current trend among hotels that have Pea and Dixie House restaurant brands. We
reevaluated their F&B operations is to replace the wondered why Bristol deviated from its successful
formal fine-dining, white-tablecloth concept with a formula, and so we decided to investigate why the
more casual and relaxed dining experience (Allen, Bristol Hotel Company elected to team with Good
1996; Liberson, 1996). Another trend indicates that Eats Grill. We narrowed our focus and analysis
more and more hotel companies are looking to even further by evaluating just the Houston property
establish strategic alliances with brand-name using interviews of the principals involved.
restaurant companies. Doing this has allowed hotel We asked executives from both Bristol and
companies to focus on managing the hotel Good Eats Grill 70 questions in all, conducted site
[Link] in Table 6.3 are examples of strategic visits, and found additional research information in
alliances between hotel and restaurant companies. various hospitality periodicals. Additionally, Mike
These examples illustrate that some of the largest Feldott, of HRC Consultants, L.C., was a key
hotel companies have already established strategic adviser on restaurant brands and operations for
alliances with major restaurant chains. hotels.
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 35

PRODUCT BRANDING

Product branding refers to establishing a price, quality, convenience).Within the hotel well-
known name for a given product or industry a multitiered branding strategy has service whereby the
particular product or evolved among lodging companies. The folservice and its attributes are highly
recog- lowing table illustrates how some hotel nizable and easily recalled by consumers. brands have
become associated with differThe basic concept behind such so-called ent [Link] that some
companies have debranding is to establish a standard on which veloped products for more than one
tier. consumers may rely to predict value (e.g.,

Economy, Middle Luxury, All Limited Service Market First Class Suites

• Motel 6 • Holiday Inn • Four Seasons • Marriott Suites

• Days Inn • Ramada Inn • Ritz-Carlton • Embassy Suites
• La Quinta • Sheraton • Marriott Marquis • Residence Inns
• Hampton Inn • Hilton • Beverly Hilton • Homewood Suites
• Travelodge • Courtyard by Marriott • Hyatt • Bristol Suites
• Sleep Inn • Radisson • Westin • Clarion Suites
• Guest Quarters

Source: Ron N. Nykiel, “Corporate Strategy within the Hospitality Industry,” in The Complete Travel Market
Handbook, [Link] Vladimir (Lincolnwood, IL: NTC Business Books, 1988).

An example of the multiple-branding Courtyard by Marriott, Marriott Suites, Resstrategy can b

illustrated by examining the idence Inns, and Embassy Suites.
different hotel brands of the Marriott Cor- A somewhat similar branding strategy poration. Marriott
has developed Marriott also exists in the restaurant industry, as Hotels, Marriott Resorts, Marriott
Marquis, shown in the following chart.
Bristol Hotel Company. The Bristol Hotel 1995 required renovation, and many of these rooms
Company is a 39-property chain with corporate were out of order, which negatively affected year-
headquarters in Dallas,Texas. In January 1995 end 1995 financial numbers.) The revenues
Bristol acquired a Memphis-based hotel company, predicted for 1996 are around $250 million. The
United Inns, Inc., that had 26 hotels based in six following key indices summarize Bristol Hotel
states. By the end of 1995 Bristol Hotel Company Company’s performance in 1995:
had grown from 8 to 38 properties with more than
10,000 rooms, which generated $192 million in
total revenues. (Many of the properties acquired in
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 36

Quick Service Casual, Family Upscale Theme

• McDonald’s • Red Lobster • Ruth’s Chris Steakhouse • Planet Hollywood

• Taco Bell • T.G.I. Friday’s • Trader Vic’s • Hard Rock Café
• Pizza Hut • Damon’s • Del Frisco’s • Benihana
• Domino’s • Good Eats Grill • Bice Ristorante • Lettuce Entertain You
• KFC • Chili’s • Palm Restaurant • Front Row Sports Grille • Church’s •
Olive Garden • NY Restaurant Group • Country Kitchen
(Mrs. Parks)
The Country Hospitality Partnership, a KossFeder, “Radisson Seeks Marketing
subsidiary of Carlson Hospitality Worldwide, is an Advantages,” Hotel & Motel Mangement, pp. 3, 43;
example of a restaurant company with a multitier Ron Ruggles, “T.G.I. Friday’s Cruises into
branding strategy. The Country Hospitality Summer,” Nation’s Restaurant News, June 1996,
Partnership restaurants include Country Kitchen pp. 14, 43; and Lawrence White, “Growth Meister,”
(252 restaurants), T.G.I. Friday’s (365 restaurants), Lodging, September 1996, pp. 52–58).
Italiani’s (14 restaurants), and Front Row Sports The Marriott Corporation is another example of
Grille (3 restaurants). Additionally, Carlson a hospitality company that owns and integrated its
provides a good example of a hotel company that own restaurant brands into its hotels. The key point
owns and has vertically integrated both the hotel is that the brand is recognizable, and this
and the restaurant product into one corporation. recognition equates to reliable value from the
Carlson Companies, Inc., owns both Radisson customer’s perspective. This enhanced customer
Hotels Worldwide and Country Hospitality perception can be used by a firm to gain a
Partnership. The T.G.I. Friday’s concept is being competitive edge and, in turn, increase revenues and
integrated into many Radisson Hotels (see: Laura profits for the company.
Average occupancy 64.10%
Average daily room rate $62.67%
RevPAR $40.20%
Gross operating margin 29.62%
Rooms margin 71.61%
Food, beverage margin 24.84%
Bristol primarily uses an owner-operator
strategy versus management contracts in
managing its hotels. As of the time of our study it
owned 36 of its properties (93 percent) and
managed the other three properties. Bristol’s
primary focus was in the full-service segment,
with 35 full-service properties (89 percent) and
only four limited-service properties.
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 37

Its primary target market is the mid- to upper- operating and financial results during the
level corporate traveler (the source of 90 percent industry’s recent recession.
of the company’s revenues). It also does Second, it maintains a distinct corporate
substantial group-meeting business. Bristol is culture and management style that translates into
anticipating that full-service hotels will play an low executive-management turnover.
important role in meeting the future lodging and Third, its centralized management structure
business demand of those two market segments. allows managers to focus on the quality of a
John Beckert, the chief operating officer of guest’s stay as the number-one priority.
Bristol, considers the “full-service segment as a The company’s primary operating strategies
segment that has been somewhat abandoned, but are listed in Table 6.4.
Bristol considers the segment to be ‘solid’ as far Throughout our discussion we will analyze
as demand (anticipate 6 to 10 percent increase in Bristol’s six operating strategies. However, our
demand) and a segment that allows for greater emphasis will be on understanding why Bristol
pricing power.” Hotel Company aligns its F&B services within
Bristol’s overall strategy is to provide their hotels in a certain fashion and how it reaches
customers with a first-class-hotel experience— the decision to do so one way instead of another.
but without being stuffy—and extraordinary Among its 39 hotels Bristol has 22 hotel
overall value (price and quality). While those restaurant outlets and uses three internally
goals are not unusual among hotel companies, developed restaurant brands in 20 of those
Bristol has distinguished itself in several properties, as shown in Table 6.5.
[Link],it has an excellent track
record,established in part by achieving strong
Table 6.4 Bristol Hotel Company Operating Strategies
Strategies Implementation

Unique management culture Entrepreneurial and team-oriented

Control over hotel operations Owner-operator focus
Assets in select geographic markets 28 properties located in Atlanta, Dallas, and Houston (fast-growing
markets)
Direct sales and marketing Focus on local market
Flexible use of brand names Operate under its own brand names:
Harvey Hotels, Bristol Suites, Harvey Suites Operate
under national franchise brands:
Holiday Inn, Marriott, Promus properties, Hospitality Franchise
Systems brands
Emphasis on food and beverage services Bristol’s F&B profit margins (32 percent original eight and 25 percent
overall) are above December 1994 national industry levels of 17.1
percent.

Source: Bristol Hotel Company 1995 Annual Report

Table 6.5 Bristol’s Own Restaurant Brands
 Section 6.5 Strategic Alliances Between Hotels and Restaurants

38

Brand Concept

Scoops Diner (4 units)

• Theme restaurant with a 1950s concept
• Comfortable and casual
Remmington’s (4 units) • Eclectic
• More upscale than a Scoops
• Nice hotel coffee shop
Bristol Bar and Grill (12 units) • Designed as a hotel restaurant
• Flexible in handling fluctuations in sales volume
• Self-serve
• Friendly and fast

In addition to Bristol’s own restaurant concepts The following key indices summarize Good
and the two franchised Good Eats Grills previously Eats Grill’s 1995 performance:
mentioned, Bristol executives are considering Total revenues $23 million
leasing space to a branded restaurant in two of their Food-revenue percentage 94%
limitedservice properties. Beverage-revenue percentage 6%
Good Eats Grill. The Good Eats Grill Overall F&B cost percentage 28.5%
Company is a privately held firm that currently has Food-cost percentage 29%
17 restaurant outlets, of which 16 are located in Beverage-cost percentage 22%
Texas and another in Mississippi. Four of the 17 Average check $8.12
restaurant outlets are franchised, while the others Covers/year (approx.) 2.8 million
are owned and operated by the company Table 6.6 summarizes the Good Eats Grill
founder,owner,and president, Gene Street. Bristol menu.
Hotel Company is the only hotel company that is At the time of this writing, Good Eats Grill was
currently allied with Good Eats Grill. In 1995 Good doing business with no other hotel company besides
Eats Grill’s annual revenues were $23 million. the Bristol Hotel Company. We wondered why, and
Good Eats Grill is a casual, family restaurant asked key people within the Good Eats Grill
stressing food quality and low price. A Good Eats management why they had agreed to team with
Grill can seat 150 to 200 diners, serves lunch and Bristol Hotels. The key factors from the perspective
dinner, has a comfortable decor and casual of those managers were:
atmosphere, and offers excellent food quality at an • The companies share similar proactive, team-
affordable price. Good Eats Grill’s best-selling oriented management styles.
entrees are its chicken-fried steak and vegetable
plate. The approximate square footage required for • The firms’ corporate cultures blend well.
a Good Eats Grill is 4,000 to 6,500 square feet • The projects were financially feasible.
(includes both front and back of the house).
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 39

• Bristol was looking for exactly the product that This particular Holiday Inn, a 400-room
Good Eats Grill could deliver (i.e., customer property opened in 1971, recently underwent $11.5
value in terms of quality and price). million in renovations (of which some $1.5 million
• Both companies wanted the deal to happen. was for the conversion of the previous restaurant
into a Good Eats Grill).This hotel generates
Good Eats Grill executives believe more hotel- approximately $7.5 million in room revenues,
and-restaurant alliances are imminent and such operates at an 85-percent occupancy level,and has
deals represent a trend that is here to stay. Good Eats an average daily rate of $60 and RevPAR of $48.
Grill’s management expects to do more restaurant- Restaurant revenues are targeted to be
franchise deals with hotel companies as doing so approximately $1.5 million; food profit, 25 percent;
offers a viable option for expanding quickly without beverage profit, 55 to 60 percent; food cost, 28 to
intensive capital requirements. 29 percent; and beverage cost, 20 to 22 percent.
Property location. For our study we selected Property selection. During 1995, the year
the Holiday Inn Intercontinental, a Bristol Hotel Bristol acquired the United Inns properties, Bristol
Company property located near the Houston Hotel Company executives evaluated all of their
Intercontinental Airport. From the outside, the hotel-restaurant outlets and made decisions as to
Good Eats Grill appears as if which restaurant concept best supported the
targeted positioning of each individual hotel.
Among Bristol’s development strategies was a
decision to use the Good Eats Grill concept in two
Table 6.6 Good Eats Grill Menu of its properties. Just as we asked the Good Eats
it is a freestanding restaurant, but in reality the Grill executives, “Why Bristol?” we asked Bristol
restaurant is as much a part of the hotel as the lobby. executives, “Why the decision to go with Good Eats
Grill versus going with proven internally developed
Menu Items Price Range Comments

Appetizers 6 $1.99–$4.99
Soups and salads 5 $2.19–$5.79

Burgers and sandwiches 7 $5.29–$6.29

Entrées 20 $5.99–$8.99 Steaks, pork chops, chicken, pasta, grilled fish

Served with garden-fresh vegetables
Add salad for 99 cents
Desserts 5 $2.49–$2.99

Beverages (alcoholic and Full service

nonalcoholic)

Source: “Ride the Branding Wave,” Lodging, September 1996, pp. 62–73.
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 40

restaurant brands or renovating the existing concept,also reminiscent of a coffee shop but more
restaurant?” The key element in upscale than Grand Cargo Cafe in price and quality,
Bristol’s selection of Good Eats Grill for two new was not considered sufficiently different to achieve
locations was in Bristol’s overall assessment of that goal. Moreover, Remmington’s did not
which restaurant concept would be the best match completely match the “casual and comfortable”
for the repositioning strategies for those specific atmosphere desired to complement the overall hotel
hotels. repositioning strategy.
At the Houston Holiday Inn Intercontinental, Bristol’s Scoops Diner concept offered a close
the existing restaurant, the Grand Cargo Cafe, was match to Bristol’s goal of providing the customer
a typical hotel restaurant with a coffee-shop feel. with good overall value in a casual and comfortable
The Grand Cargo Cafe had average food quality and atmosphere. Scoops’ 1950stheme concept,
service, low profit margins (5 percent), low sales however, was developed primarily for walk-in
volume, high employee turnover, little name diners rather than a hotel’s overnight and meeting
recognition, and a below-average reputation among guests. Like Remmington’s, then, the Scoops
those customers familiar with the operation. In concept did not exactly fit the needs of the
short, the Grand Cargo Cafe was a costly amenity property’s new target markets.
for the hotel’s previous owners and Bristol While hotel guests were to be a prime customer
executives quickly determined that a change was base for the Intercontinental’s restaurant, the
required. property was seen to also offer great opportunity for
Bristol first looked at the possibility of walk-in business. (Here are some of the key site-
replacing the Grand Cargo Cafe with one of specific characteristics of the Holiday Inn
Bristol’s own internally developed F&B concepts Intercontinental that indicated a freestanding
(i.e., Bristol Bar & Grill, Scoops Diner, or restaurant could generate substantial walk-in
Remmington’s). After some consideration it was business: (1) the physical layout of the property—
determined that Bristol’s own concepts did not parking, entrance, signs, and size—was considered
adequately complement the property’s excellent; (2) the property is located close to
repositioning strategy. The Bristol Bar & Grill is a Houston International Airport on a major highway;
quick-and-friendly self-serve concept that is and (3) there was limited restaurant competition in
primarily focused on serving hotel guests (i.e., the area despite the potential for customers from
banquet guests). Such a foodservice arrangement local businesses and surrounding hotels, some of
would be inappropriate for the repositioned Holiday which are limitedservice properties.) With that in
Inn Intercontinental, which has a large sales-volume mind, Bristol executives realized that the Scoops
potential comprising both walk-in diners (85 and Remmington’s concepts did not have sufficient
percent of the lunch trade and 40 percent for dinner) preexisting customer brand awareness in Houston
and overnight guests (15 percent at lunch and 60 to generate substantial walk-in traffic. In the final
percent at dinner). assessment, then, Bristol purchased the franchise
Another objective in replacing the Grand Cargo rights to operate a Good Eats Grill in Houston (and
Cafe was to change dramatically the perceived at one other location).
atmosphere of the outlet from that of a coffee shop A good match. Bristol management considers
to a substantial restaurant. Bristol’s Remmington’s Good Eats Grill to be a competitive concept that
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 41

offers a quality product, a casual environment that The “right” match between the hotel and the
customers enjoy, a respected and recognizable restaurant can vary from property to property. At
restaurant name in the Houston area, and proven Bristol, all 39 properties were evaluated to
sales volume. Another key factor mentioned by determine which F&B concept best fit each
Bristol executives was that the two organizations property, and only two locations were selected for a
clicked, meaning that the corporate culture of each Good Eats Grill franchise. As we will point out
was well matched with the other. Both have an later, several key factors such as conversion costs
entrepreneurial base, both are flexible, and both and nearby competition must be taken into
have high-quality standards for a midlevel product consideration prior to making the final decision.
at an affordable price. Shown on the next page is a Turn up the volume. Another element related
table that compares the hotel, restaurant, and to positioning is to determine the volume and
combined marketing strategies of the two customer mix [Link] example, let’s review
companies (Table 6.7). Bristol’s existing company-owned restaurant
Key positioning criteria. We found that a brands: Scoops, Remmington’s, and Bristol Bar &
critical factor in the selection process of a hotel’s Grill. Bristol management will locate a Scoops or a
Remmington’s in those properties that have above-
F&B brand or concept is to determine the customer average hotel volume, and where restaurant-

Hotel Restaurant Combined

• Primary market • Family-style restaurant • Appeal to corporate and family travelers

• —Corporate business travelers • Excellent food quality • Mid- to upper-market value
• —Mid- to upper-range travelers • —Fresh • Casual and comfortable
• Secondary market • Value • Best overall value
• —Family travelers • Brand recognition • —Price and quality
• Brand recognition • Casual, comfortable decor
• First-class hotel, but not stuffy
• Physically competitive

perception that you want to create at the property customer volume comprises primarily walk-in
and then select a restaurant theme that complements diners who are not using the hotel’s other services.
A Bristol Bar & Grill concept is used when the F&B
the overall Table 6.7 Operating Strategies market is primarily hotel guests and banquet
property’s image. Bristol COO Beckert illustrated business. The Bristol Bar & Grill is targeted
this by saying, “At Bristol we try to identify specifically to serve hotel patrons with a quick-
uniqueness in our F&B concepts, which then serve breakfast, convenient lunch, and buffet-style
become selling points for the property. The dinner. The Good Eats Grill concept, on the other
restaurant then goes on a short list that our sales hand, generally operates as a freestanding
staff use to sell rooms.” restaurant, has a proven sales volume ($1.5 to 2
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 42

million per year),offers consumer value, and has a • The high-traffic location of the property (in a
comfortable decor that’s attractive to both walk-in commercial area near the airport).
diners and hotel guests. • Since there was only one freestanding
During Bristol’s examination of its hotel restaurant within a two-mile radius, the
restaurants, it was determined that a Good Eats Grill potential for non-hotel-guest business was
should be used when (1) it is necessary to reposition great.
the hotel, (2) a great restaurant-volume potential
exists, (3) the physical layout and location of the
property can sustain a freestanding restaurant, and
SELECTION PROCESS
(4) the market mix comprises both hotel guests and A summary of the key advantages and
walk-in customers. disadvantages to consider when going with a
Why Houston? Bristol’s management felt that franchised restaurant brand in your hotel are listed
the Houston Holiday Inn Intercontinental needed below (Lodging, 1995), while illustrated on the next
repositioning and a recognized restaurant brand like page is a flow chart of the basic steps to take when
Good Eats Grill was essential for any repositioning evaluating and choosing which franchise restaurant
strategy to work. Good Eats Grill already had two company to use (Figure 6.1).
successful freestanding restaurants in the Houston
region. Additionally, Good Eats Grill maintained an Advantages
ongoing investment in local advertising. By • Integral part of repositioning the hotel
contrast, a Remmington’s, a Scoops,or even the • Potentially increases revenues,occupancy,
Grand Cargo Cafe did not have anywhere near the profits
same level of local brand awareness and consumer
acceptance. • Restaurant franchiser is continually assessing
The following list summarizes the key factors the menu, whereas a hotel’s tendency is not to
that Bristol’s executives considered when selecting change the menu
Houston as a location for a franchised Good Eats • Franchiser is knowledgeable about the
Grill. restaurant business
• The property was being repositioned. Disadvantages
• Financial feasibility was evident. • Franchise fee
• The property’s existing hotel restaurants were • Requires a certain level of volume to warrant
producing low revenues. utilizing a franchise brand
• The physical layout of the property allowed for • High initial investment
conversion.
• Parking, entrances, and signs would be
relatively easy to provide.
• The local labor market could support the
concept.
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 43

• Brand can lose reputation and recognition or and (2) determined to minimize the bureaucracy to
quality levels could drop during the term of the
franchise agreement make the deal Summarized below are critical
• Room service and banquet service could still elements to consider when assessing which
require a separate kitchen operation restaurant brand concepts will best match a
As previously noted, Bristol chose the Good particular hotel property.
Eats Grill concept over other restaurant companies
because the Good Eats management was (1) flexible

CRITICAL ELEMENTS TO CONSIDER

 Section 6.5 Strategic Alliances Between Hotels and Restaurants 44

1. Determine the desired hotel market • New recipes on a regular basis

position and customer perception you want to create • Cooking specifications
for each property. This includes knowing all about • Franchise fee
the property’s competition, environment, and • Restaurant decor
customers, and involves creating a unique image for • Training support
your property. • Management support
2. Make sure that you objectively assess the • The ability to handle room serviceand
revenue and expense potential of each operational banquets
option when examining your financial trade-offs. 7. View the hotel’s restaurant outlet as a
Such options include running your hotel company’s selling point that can enhance rooms sales and as a
own brand, buying and operating a franchised profit center that can be held accountable for
brand, and leasing space to a brand-name restaurant achieving established profit. happen. In today’s
company. competitive market, business decisions must be
3. Select a restaurant company that has a made quickly and accurately or else the window of
corporate culture that mirrors your hotel’s corporate opportunity may be lost. In this particular example
culture and also shares the same basic operational the basic deal was struck after two executive
goals. meetings (however, it did take the lawyers a little
longer). The rest of the steps in the process caught
4. Evaluate each property on a standalone up with the decisions that were made after those two
basis using all available facts and data. Avoid executive meetings. Such a quick decision was
making generalizations about what will work for all possible because the two companies have similar
properties. proactive management styles, the project made
5. The key criteria in identifying which financial sense for both companies, the corporate
properties could benefit most from a brandname cultures blended well, and the decision-makers
franchise-restaurant concept are: went with their instinct.
• Desired positioning of the hotel
• Financial trade-offs and feasibilityanalyses
• Competitive marketing analysis
CONTRACT
• Physical layout of the facility(parking, RELATIONSHIPS
entrances, signs, location of kitchen)
There are four basic types of operational options
• The site location
that can be established between the hotel and the
• The local labor market
F&B outlet in a hotel. Those four options are (1)
6. The key criteria in selecting a particular internally developed restaurant brand, (2)
restaurant company are: franchised restaurant brand, (3) straight lease, and
• Similar business goals and corpo-rate (4) management contract. Bristol’s first choice
culture (used for 20 of its 22 restaurant outlets) is to use its
• Initial investment cost own internally developed restaurant brands. Bristol
• The menu offered believes it has a proven track record in managing
• Ongoing new menu development F&B operations profitably (Hotel Business, 1996).
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 45

When Bristol introduced Good Eats Grill into the competition, (2) customer expectations, and (3)
two of its 22 hotels with food service, it showed a advertising.
willingness to purchase a franchised brand, Competition. The primary hotel competitors
provided Bristol could maintain full control of for Bristol’s Houston Holiday Inn Intercontinental
restaurant operations and products (as long as all are a Marriott hotel (569 rooms), a Hyatt hotel (315
franchise agreements were maintained). Currently rooms),and a Sheraton hotel (450 rooms). As for
Bristol is also assessing a leasing arrangement with nearby foodservice competition, Marriott uses
yet another restaurant company for a couple of internally developed restaurant brands (Allie’s
Bristol’s Fairfield Inn properties. In those cases American Grill and CK’s) along with a Pizza Hut
Bristol managers seem to be indicating that it would kiosk, while the Hyatt and Sheraton offer typical
be more profitable for them to lease out square hotel restaurants. Additionally, there are some
footage in the hotels versus operating the F&B limited-service hotel properties in the area that
outlet themselves. factor into the secondary market competitive
Key franchise elements. Bristol has purchased analysis.
the franchise rights for its two Good Eats Grill The freestanding restaurant competition in the
operations. The key elements of the franchise area is negligible. There is a Kettle Restaurant
agreement are the menu, recipes, cooking nearby, but it does not pose a strong business threat
specifications, franchise fee, restaurant decor, to Good Eats Grill as it has a different target market.
music package, training support, and negotiated There is a Bennigan’s and T.G.I. Friday’s within
special provisions (e.g., use of Good Eats Grill three miles of the Holiday Inn, but there is no other
recipes for banquets). Basically, Bristol purchased notable restaurant competition within a twomile
a turnkey operation from Good Eats Grill. radius of the hotel. As it turns out, the Holiday Inn’s
Moreover, Good Eats Grill provides pre- and Good Eats Grill is popular with Marriott’s, Hyatt’s,
postopening training support, new and updated and Sheraton’s hotel guests, and also with those
menu development, and such regional management hotel guests that are staying at the surrounding
support as consulting, auditing, and trouble- limited-service properties. It can be expected, then,
shooting. that a guest who stays at a hotel other than the
In exchange for the franchise and its Holiday Inn, yet eats at the Good Eats Grill, may
management services Good Eats Grill receives 3.5 decide to stay at the Holiday Inn on return trips to
percent of lunch and dinner revenues as a franchise [Link] value of the strategic alliance between
fee. the hotel and the restaurant is that it establishes a
unique identity for this property that sets it apart
from its competition and provides a marketing edge.
MARKETING Customer expectations.A primary
We have already mentioned how the Bristol sales missionstatement goal of both companies is to
office uses the company’s restaurants as a selling exceed customer expectations. With the alliance of
point to assist in booking rooms, meetings, and the Holiday Inn Intercontinental and Good Eats
banquets. In addition there are three other Grill, Bristol management believes the customer is
marketing concerns that need to be considered: (1) pleasantly surprised with the overall product and
services that the property provides. Even though the
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 46

hotel and restaurant renovations were completed the property receives maximum management focus
just recently, in July 1996, the perceived overall for all of its key operations.
value of this property to the customer is already Another distinguishing operational element at
generating new corporate accounts. Bristol this property is the way room service and banquets
management believes the hotel repositioning are handled. The Good Eats Grill kitchen serves
strategy in combination with the addition of the them. There is no separate kitchen or menu to
Good Eats Grill is a major reason it is landing those handle room service. Bristol also uses the Good Eats
new accounts. Grill kitchen for banquets, and has the final say in
Advertising. Bristol Hotel Company believes establishing banquet menus and costs. Moreover,
in a direct sales-and-marketing approach. The Bristol has the option of using Good Eats Grill menu
company therefore relies less on national promotion items and recipes in preparing the banquet meals
activities than many other firms. The Holiday Inn (provided that the recipes are followed exactly).
Intercontinental is no different in this regard. The
hotel does some limited local advertising, but it FINANCE
relies primarily on a direct-sales approach along
with making personal local contacts. Other than the We have shown how the correct match between a
signs around the property, there is no joint restaurant company and a hotel operator can help to
advertising or promotion done between the hotel reposition a hotel, increase occupancy, and increase
and the restaurant. Good Eats Grill has four lighted F&B profit. We can
signs on the property, and Bristol purchases no
billboard ads for this property. There are two other
Good Eats Grill restaurants located in Houston, and
Good Eats Grill does do some radio promotion and Table 6.8 Profit–loss Comparison
rents billboards for those two restaurants. investigate other potential financial gains by
comparing a summary of the actual 1995 profit-loss
statement of the Holiday Inn’s original (pre-Bristol)
OPERATIONS foodservice concept (Grand Cargo Cafe) with a
As a franchisee Bristol maintains total operational conservatively estimated profit-loss statement of
control of the restaurant, but Good Eats Grill recipes the Good Eats Grill for 1997 (its first year of full
must be followed exactly. Unlike other Bristol operation; see Table 6.8).
properties, the restaurant has its own general
manager. Bristol determined quickly that this
particular property needed to establish the
restaurant as a priority, but did not want the hotel
general manager to get distracted from managing
the rest of the hotel. Bristol therefore elevated the
restaurant-manager position to that of restaurant
general manager at this property. The restaurant
GM reports to the hotel GM, and the result is that
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 47

A quick comparison of those profit-loss figures

shows how establishing a strategic alliance between
a hotel and restaurant can improve the overall
profitability of the property. Other expenses such as
franchise initiation fee ($40,000–$50,000), cost of
renovation ($750,000), cost of signs ($5,000), and
other miscellaneous marketing costs (grand
opening, flyers), must also be factored into
assessing the feasibility of converting or opening an

Grand Cargo Cafe Good Eats Grill

Actual Projected

1995 % Item description % 1997

831,519 70.5 Outlet revenues 1 59.8 1,269,455
199,920 16.9 Banquet revenues 28.4 601,000
148,072 12.6 Other revenues2 11.8 251,430
1,179,511 100.0 Total revenues 100.0 2,121,885
405,354 34.4 Food cost 26.4 561,137
525,634 44.5 Payroll3 43.2 917,621
43,561 3.7 Other expenses 7.1 148,532
974,555 82.6 Total expenses 76.7 1,627,289
204,956 Profit in dollars 494,596

17.4 Profit percentage 23.3

1 Outlet revenues include restaurant revenues and room service. 2 Other revenues
include banquet-room rental, house portion of the gratuity, and miscellaneous banquet
fees. 3 Including employee benefits and payroll taxes. Source: Bristol Hotel Company.
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 48

Table 6.9 Key Property Performance Indicators demonstrates the importance of evaluating each
property on an individual basis rather than making
Projected generalizations about what will work for all hotel
1996 1997 properties.
In conclusion, from our perspective there is no
Hotel occupancy 72% 85% question that now and in the future we will see more
ADR $49 $60 hotel and restaurant companies establishing
Food profit 5% 25% strategic alliances. It is no longer financially
Beverage profit 50% 60% feasible for a hotel restaurant to be operated as just
a support function to the hotel’s lodging operations.
operation prior to proceeding with a project like the The hotel restaurant must now be viewed as a
one between Holiday Inn Intercontinental and Good selling point to generate increased room and
Eats Grill. restaurant [Link] hotel restaurant must be
Final analysis. Throughout this case study managed as its own profit center where the goal is
analysis, we emphasized how important the to maximize overall property profits. For the entire
repositioning strategy was in turning around the property to be profitable, the restaurant concept and
Houston Holiday Inn Intercontinental. A quick look the hotel’s market position must complement each
at key property performance indicators (Table 6.9) other. Put another way, in today’s competitive
demonstrates the success of that repositioning business environment the hotel restaurant cannot—
strategy. and should not try to—be all things to all people. To
Moreover, we focused primarily on only one achieve a competitive edge, hotel companies must
part of the hotel’s repositioning strategy, that is,its consider operating a franchised restaurant brand or
strategic alignment with a particular restaurant leasing space within the hotel to a restaurant
concept. Other factors also contributed to the company. Doing so may improve customer
property’s improved performance, including new perception and value, and as a result increase the
ownership and management, an influx of cash for overall profitability of the
6.6 CONTEMPORARY HOTEL CATERING
renovations, and its new market position. property.
Nevertheless, the alliance between Bristol and Good Patti J. Shock and John Stefanelli
Eats Grill is seen as key to the property’s
turnaround. The property’s previous restaurant, the Although on-premise catering is generally the
Grand Cargo Cafe, was being operated as a hotel second largest source of revenue for most hotels,
amenity rather than as a profit center. To capitalize following sleeping rooms, the on-premise catering
on the restaurant’s potential, the Bristol area has been virtually ignored in the hotel school
management team recognized that a new restaurant curriculum. The colleges that do offer a course in
concept was [Link] objectively evaluating catering usually focus on hands-on classes
their options, including their own F&B concepts, consisting of planning, cooking, and serving a meal,
the team determined that a Good Eats Grill franchise which is good background, but is not the role of the
matched Bristol’s restaurant needs for this hotel catering department.
particular property. The Bristol experience
 Section 6.5 Strategic Alliances Between Hotels and Restaurants 49

Catering is often the highest visibility the hotel client contacts and service [Link] role is to
has on a local level. Catering can create an image sell and service functions. They must seek and
for the hotel, both locally and nationally. consult with clients,plan menus,themes,room set-up
and decor; negotiate prices; and coordinate with
inside departments and outside vendors. There are
DEPARTMENT several excellent graphic room-setup software
packages available on the market.
ORGANIZATION The Catering Department may also employ
In most hotels the Director of Catering reports to the Catering Sales Representatives who are usually
Director of Food and Beverage, with Banquet involved only with selling, leaving the servicing to
Managers and Banquet Set-Up Managers reporting others.
to Catering. In other hotels you may find a Director The Banquet Manager implements the Director
of Catering and Convention Service reporting to the of Catering’s requests; oversees room captains;
Director of Marketing, with the Banquet positions supervises functions in progress; staffs and
reporting to Food and Beverage. In the latter schedules servers and bartenders; and coordinates
arrangement, Convention Service usually handles all support departments. He or she is the operations
food and beverage functions for groups with 20 or director, as
more sleeping rooms with Catering selling and
servicing the local social and business markets.
Convention Service then does not sell; the room
sales department handles that aspect. Convention
Service in most hotels, however, handles all of the
nonfood related logistics, including room set-up,
audio-visual requirements, etc. In hotels where
conventions are not an important market segment,
Convention Service may not exist, in which case
Catering would handle all food and non-food
logistics.
The Director of Catering assigns and oversees
all functions; oversees catering sales managers;
oversees all marketing efforts; interacts with clients
and catering managers;coordinates with the hotel
sales director; and works with the chef to update and
create menus.
Under the Director of Catering there may be an
Assistant Catering Director who helps with
marketing,oversees Catering Sales Managers, and
services one or more accounts. There may be
several Catering Sales Managers, depending on the
size of the hotel. Catering Sales Managers maintain
 50

opposed to catering executives, who primarily sell bles; and attend to guest needs. Beverage Servers
and work with clients to plan events. serve alcoholic beverages, usually at receptions. Bus
The Assistant Banquet Manager reports to the persons, whose primary responsibilities are to clear
Banquet Manager and supervises table settings and tables, restock side stands, and serve ice water, rolls,
decor. There may be two (or more) assistants; for butter and condiments, sometimes back up servers.
example, a hotel may have one for the day and one The Bartender concentrates on alcoholic
for the evening shift. beverage production and service. Bartenders are
The Banquet Set-up Manager supervises the often assisted by Bar Backs, whose primary
banquet set-up crew; orders tables, chairs, portable responsibility is to initially stock and replenish the
bars, and other room equipment from storage; and bars with liquor,ice,glassware and other necessary
supervises the tear-down of the room after the event supplies.
has concluded. Housemen (sometimes referred to as porters) set
The Scheduler, often referred to as the Diary up function rooms with risers, hardware, tables,
Clerk, enters bookings in the Master Log (now chairs and other necessary equipment. They report
usually computerized);oversees the timing of all to the Banquet Setup Manager.
functions and provides adequate turnover time Attendants “refresh” meeting rooms during
between functions; is responsible for scheduling breaks by emptying ashtrays when smoking is
meeting rooms, reception areas, pool-side areas, permitted, refilling water pitchers, and removing
meal functions, beverage functions, other functions, trash. Some catered functions also require Coat-
and equipment requirements; keeps appropriate Check Attendants or Restroom Attendants.
records to ensure against overbooking and double The Clerk (or Secretary) handles routine
booking of space; and is responsible for correspondence, types contracts and banquet event
communicating this information to relevant orders (BEOs),handles and routes telephone
departments. messages, and distributes documents to relevant
The Maître d’Hôtel is the floor manager. He or staff members and other hotel departments.
she is in charge of all service personnel and oversees The Engineering Department provides
all aspects of guest service during meal and necessary utilities service, such as air
beverage functions in the various function rooms on conditioning/heating, setting up electrical panels for
the floor. major exhibits, hanging banners, and setting up
The Captain is the room manager and is in audio visual displays.
charge of service at meal functions in a specific Other miscellaneous positions include the
room. Captains typically oversee all activity in the following. A Sommelier (or Wine Steward) is used
entire function room or, depending on the size of the only at fancy, upscale events. The Cashier sells
room, in a portion of it. They also supervise the drink tickets to guests at cash bars. A Ticket Taker
Servers in their room or section of the room. may be required to collect tickets from guests at the
There are two types of Servers, Food Servers door to the function. Finally, most catering
and Beverage Servers. Food Servers deliver foods, departments employ Stewards to deliver the proper
alcoholic and non-alcoholic beverages, and utensils amount of china,glassware,and silver to function
to the table; clear ta- rooms.
Section 6.6 Contemporary Hotel Catering
Whatever the organizational structure,
catering’s favorable impact on hotel profitability is
 51

primarily due to the fact that catering has more If the contact is by phone,be sure the person
control over the variable expenses than does the answering the phone can answer questions, or that
manager of a typical restaurant. In a restaurant, labor someone knowledgeable is always available. Too
must be scheduled, heat/air conditioning must be on, often a low-paid, untrained person in the office
and food must be kept in inventory, whether or not answers the phone, and this can hamper the selling
any guests are present in the facility. In catering, a effort. The phone should always be answered within
function must be booked before these items are three rings. Always secure the name and phone
scheduled or purchased. So there are more variable number of the caller.
costs in catering, and more fixed costs in restaurant If the initial contact is by letter, email, or fax,
foodservice. try to answer with a phone call. Copies of the letter
were most likely sent to several caterers and it is best
to be the first to respond. More information is often
THE SALES AND SERVICE needed, such as the budget the client has for the
event or the objective of the function. This initial
PROCESS contact also provides the opportunity to invite the
Selling is a vital part of catering (see Figure 6.2). To potential client to the property for lunch and a
sell a catering event, potential markets must be [Link] effort should be made to get the potential
identified and cultivated. Target markets must be client into the hotel, on your home turf.
established. Potential markets include association Sometimes a letter will include a Request for
meetings (local monthly meetings as well as the Proposal (RFP), which is a written prospectus from
national annual conventions); corporate meetings, professional meeting planners. An RFP usually
including training sessions and incentive banquets; indicates that the potential client is very
weddings and anniversaries; bar mitzvahs; proms; knowledgeable about catering and is usually a
garden clubs; holiday parties; reunions, both school sophisticated negotiator.
and military; and fraternal organizations, such as
Rotary and [Link] list is endless.
A marketing plan should be developed that
clearly defines the desirable target markets; defines
the demand; describes competing caterers; sets
financial goals; considers other potential income
that catering can generate for the hotel; and
describes standardized procedures that must be used
to canvass for new clients, qualify leads, make sales
calls, develop contracts,and provide required
products and services.
The initial contact for a function can come from
the client or the catering department. In many cases,
the potential client makes the first inquiry. He or she
may contact you by phone, by letter, fax, email, or
in person.
 52

If potential clients stop by in person without an function, to get them involved in the planning
appointment, have someone see them as soon as process right away. Also, keep a binder handy for
possible. Offer some light refreshments to keep browsing that contains testimonial letters from
them occupied until someone is available. Give an happy clients and photos of previous events.
accurate estimate of how long they will have to wait. A Group History File should be created
Section 6.6 Contemporary Hotel Catering

Have the receptionist obtain preliminary whenever initial contact is made. The file should
information, such as their desired date(s) and type of include all facets of the business relationship, from
 53

initial contact to final disposition. Standardized foods, presentations, cleanliness, and ambiance
information includes name of contact, name of must meet desired quality standards; professional
decision maker, titles, organization, types of events attention must be paid to all details; the function
held, number of events held, when events are held, host should be made to feel like a guest at the event,
attendance figures, all correspondence, notes from instead of a harassed and worried manager. Last
phone conversations, contracts, credit history, minute requests and crises must be handled quickly
potential for future business, and client preferences. and efficiently. It is imperative to be flexible.
The manager responding to client inquiries must Follow-up is vital for repeat business.
understand the hotel’s capabilities. He or she Standardized procedures should be developed for
especially needs knowledge of food and beverage thank-you calls and individualized, personal thank-
production and service. Planning a menu for a small you letters. Completed events should be evaluated
group is quite different from a large group. For with staff and client input. Referral business should
example, soufflé for 1,000 would be quite be solicited. Appropriate souvenir gifts may be
impossible. presented. And outstanding accounts should be
When planning a menu, the caterer must first settled.
know the occasion or reason for the [Link] style
of service also depends on the occasion. It would be FUTURE ISSUES
inappropriate to have a deli sandwich buffet for an
auspicious awards banquet. Issues facing the catering department in the future
With international events, protocol must be include new alcohol restrictions; the demand for
considered in everything from decor to dietary more menu alternatives, including low-fat,
restrictions. The World of Culture website pesticide-free, generally safe, uncontaminated
([Link] provides good products; the competition from off-premise catering
information on a variety of cultures. firms;waste disposal regulations and recycling;
Public space or function rooms must be forecast consumers becoming more value conscious; and
for space utilization, just as the hotel sales service becoming a more important point of
department forecasts sleeping rooms requirements. differentiation.
Working well with inside departments is Subcontracting will become more common,
critical. Linens have to be requisitioned from the especially for labor and food. Calling one company
linen room;engineers must insure that the room to provide servers is more efficient than having staff
temperature is appropriate; tables must be set up; on the phone calling individual on-call workers. The
and purchasing must order the correct amounts and independent labor contractor trains staff and does all
types of food and beverages. of the payroll and paperwork.
Outside vendors, such as decorators, audio- Caterers can’t afford to have all types of
visual companies, florists, printers, and expertise on their staffs. With a Japanese theme, a
photographers may be needed by the client to ensure sushi restaurant may be subcontracted. Or a local
a successful event. barbecue specialist, oyster roaster, or coffee service
Performing well is the next step. Here the company can handle unique events. The hotel would
emphasis shifts from sales to service. Guests must add about 20 percent markup to the subcontractor’s
Section 6.7 A Day in the Life of an Executive Director of Catering Sales and Convention Services
be treated with care; service must be punctual; bill,
 54

and then add the cost of the rest of the meal prepared There are a multitude of resources available on
in-house. the web, including, for example, Room Calculator
In the past, menus rarely changed. Today, many ([Link]
menus are changed with the season. In the future it meetings/Workshop/[Link]), which will
will be important to be able to distinguish between a determine how many guests you can fit into a room
fad and a trend. Fads, such as Nouvelle Cuisine, are in various configurations. Many caterers have their
shortlived. Trends, such as the demand for fresh menus online which are interesting to see. Special
foods and more nutritious food, are more permanent. Events Magazine
Probably the biggest challenge is the perception ([Link] and
among guests that all caterers are exactly alike. Event Solutions ([Link]
Buyers may feel that there is always another caterer have timely articles that are archived online and are
able to provide similar service. It is imperative for searchable.
the successful caterer to differentiate their food and A large collection of useful catering web links
service from their competition. The price/value can be found at: [Link]
relationship will become more important as caterers Tourism/Catering_and_Special_Events.html.
attempt to rise above the competition.
Rich Benninger operation. Now, please allow me to take you on a
journey through a typical day in the life of a catering
Each day I wake up saying,“Today is the day I will director. But first I must make coffee. Nobody else

6.7 A DAY IN THE LIFE OF AN

EXECUTIVE DIRECTOR OF CATERING
SALES AND CONVENTION SERVICES
get everything done.” It is my optimist side taking in the office notices that 1 ounce of coffee left in a
control before my realist side has a chance to ruin pot does not mean “There’s coffee in the pot.”The
my day. Because I ply my trade at a 5,034-room following describes what I did today.
hotel with over 380,000 square feet of banquet
space, it is usually around 8:00 [Link] my realist
BOOKING BUSINESS
side kicks in. By this time I have been at work for Customers are the number-one component of a
an hour or more and start taking victories as soon as successful catering operation. Without customers,
they come. The day is half over for the dedicated the grandest ballrooms, the most spectacular
line cast members who started working at 4:00 A.M. cuisine, and the best service are all moot points. So,
so our thousands of guests can enjoy their morning every day you must work to fill the pipeline with
[Link] employees are the backbone of customers. The rooms sales managers are really
catering. Their workday here will end in four more doing a great job. They are booking over quota and
hours, and many will go to a second job. getting contracts with great food and beverage
The day will not end for the catering director minimums. For just a moment, I fantasize that this
until a few things are [Link] director has will never end and life will always be good.
just one job, sort of, and is the front person for the
 55

Oh no! We have just been asked why the week Next I make a hasty trip across property to
between Christmas and New Year’s does not have check on a breakfast we are doing on the stage of
any events. Transient room sales are strong, but our production [Link] are lucky to have an
they do not use function space. It’s up to catering incentive house tour our property, and we have
sales to fill in the hole. My team tells me that had pulled out all the stops to let this VIP group know
sales not already done so they could easily fill space we value their business. I am pleased with the
a week before or a week later, but that holiday week spectacular stage sets and the look of the breakfast.
is going to be tough to fill.I know this is true,but the I laugh with the sales manager when he apologizes
senior vice president does not care that something for only giving us 36 hours notice on the breakfast.
is tough. He wants to know what we are doing to get I assure him the financial rewards of getting large
[Link] by the way, not discount business. We incentive bookings will more than make up for the
start out looking for fullpaying customers and if that short notice. I make a note to send each guest a
does not work, then we will look at discounting. thank-you note for taking the time to tour our
I am excited to meet a customer for a site visit property.
at 7:30 A.M. I am the first property she is looking at
for a 2,500-guest reception and concert. I just talked
to her yesterday for the very first time. All our
meeting space is booked but I’m in luck; we have
FINALIZING PROGRAMS
space in our arena. I work with the arena for about The only time a program is truly finalized is once
an hour to get the space and brainstorm on things
the customers are gone and the final bill is paid. And
we can do to book this business. The arena
then just the physical stuff is over. Conversations
operations guys are great to work with. They enjoy
about the really good stuff and the sometimes bad
coming to the catering office for cappuccino. I smile
stuff can go on for years. Repeat customers are
when I think how cheap cappuccino is and how
usually the best ones to have, but they tend to
many favors it buys from operations cast members.
remember that five years ago the potato salad did
Section 6.7 A Day in the Life of an Executive Director of Catering Sales and Convention Services
We spend an hour walking our customer not have a spoon in it when the company president
through her event. Her company sells very large went to the buffet 15 minutes before it
industrial trucks, and when we tell her we can put a was scheduled to open.“Let’s not let that happen
concrete mixer right in the middle of her reception this year.”
she is all smiles. I make note to get the dimensions You spend months working to get everything
of the roll-up doors. We are going to be more planned at least three weeks in advance. Then you
expensive than the competition, but we provide give all the information to the operating
more value. We can make this a one-stop shopping departments two weeks out. For some groups this
experience. I make a note to call transportation works really well, and once you work out the details
companies and gather quotes. I know the other they only make minor changes. Other groups are not
properties will not get involved in dealing with all quite so tidy in their planning.
the outside vendors, and I use this as a selling Today I had a group arrive on site, and we
advantage. I make a note to list this as a tentative reviewed their banquet event orders. It would be
piece of business worth $165,000 or more. easier to say we redid their banquet event orders
(BEOs). At 9:00 A.M. we started reviewing 45 meal
 56

function BEOs. By 2:15 P.M. we had made major would hate to send someone the same custom menu
changes to 42 of them. I wonder aloud if they would twice.
like to change the other three just for good measure. In this world of ever more sophisticated
The chefs are circling the catering office like customers, the quest for new menus has taken on a
[Link] the food ordering is on hold until the life all its own. The unfortunate side of this
revised BEOs are signed off on. While I’m working sophisticated customer often comes with fond
with the clients to refinalize, the chefs and memories of a gourmet dinner for two at some
purchasing agents are on the phone undoing all the exotic trendy restaurant. Other favorite sources of
ordering they did days ago. Purveyors are all on wonderful ideas are glossy cooking magazines and
standby to rush product to us. I am thankful we have TV cooking shows. Now the simple task of any
excellent relationships with these wonderful people, caterer is to figure out how to make these menus,
who will now pull off miracles to get us product designed to serve eight, work for hundreds or
over the weekend. thousands. Of course, you are not alone in this
My assistant is ready to shoot someone. Making situation. The culinary staff is right there with you.
the changes once is enough of a challenge, but now Please don’t take it personally that many of them
we are changing things for a second and third time think you are crazy.
in one day. I smile as I say, “Yes, I’m sure I can get
you a completely new set of BEOs by 5:00 P.M.” Just WORKING EVENTS
as I tell myself we must be done with changes, my
contact calls and changes two of the remaining
Luckily for my catering department, we work at a
original three BEOs. I get no comfort from the fact property where we are cast in the role of
that the one lone original BEO is for an event that salespeople. Another team of professionals handles
does not happen until five days from now. I do, operations. Still, I can’t resist taking 10 minutes and
however, get great comfort from the knowledge that going down to see how setup is going for a poolside
my clients will spend over $800,000 in the next reception. Somehow I spend 45 minutes at the pool,
eight days. and now I’m going to have to rush to a pre-con
meeting. The clients who spent the day making
CREATING MENUS changes are very big customers, and the precon will
I promise a major corporate client that I will write be a big production. We have all our top executives
coming by to say hello. I am anxious to see how the
three custom menu options for their opening
eight cheerleaders will do with the dance number
reception. I tell them I will do it on Saturday and I’ll
they are performing in the center of the hollow
fax the menus so they have them for a Monday
square. I am very pleased to see the banquet and
meeting.I promise myself I will not commit to doing
entertainment departments have everything in
any more projects on Saturday. It is going to be my
perfect order.
catch-up day, and I’ve been filling the day with new
projects. I may have to work a few hours on Sunday
to get on track for next week. The great thing about LEADING AN OFFICE
writing custom menus is every time I do one I add One of my catering managers comes into my office
it to my hot menu file and just keep reusing it. I do
and asks to talk. In two days she will renew her
make a notation of whom I send each one to. I
wedding vows and she is very nervous. I go into
father mode and we make a list of things she has to
 57

do. I laugh when I ask her why she is nervous about the National Association of Catering Executives
having a party for 30 people when every day she (NACE). I also have a protégé from the university,
books parties for hundreds of guests. I try to ease and it would be nice if all three can work together
her burden of preparing some of the food herself. I on projects. I feel pressure to provide these students
suggest she just bring in the bowls she wants to use with an overwhelmingly positive experience. Last
and I’ll have the kitchen fill them up with whatever year I was voted Outstanding Mentor of the Year,
she wants. I smile when she says, “No,thank you,I and now I feel a higher level of expectation.
make really good salads myself.” I wonder, does Unfortunately,I have to cancel my NACE
that mean our salads are not really good? Board of Directors meeting scheduled for today. I
Throughout the day, my staff gives me am the president of our chapter, and I have not had
encouragement while I am working to get all the time to work on the things I need for the meeting. I
changes made on my group. They all offer to help, do not want to waste the board’s time. I make a note
and I notice the number of things I am asked to look to call our NACE intern and schedule a meeting to
at is very low today. I am proud of my staff and see what tasks I can have her handle for the Board.
make a note to have a special breakfast at our Involvement in NACE is rewarding,
catering meeting next week. It has been almost two
months since we started a new format for our
catering meetings, and I must say they are much
better and everyone seems happier with them.
BUDGETS
Yesterday we had our review for next year’s budget.
I must start working on a really aggressive
marketing plan to make the revenue number we are
after. For today, I’ll just start by having a binder
made so I feel like I’m making progress. I ask my
assistant to run some reports so I can take them
home and look at them. I know I’ll never look at
them while I’m home, but if I find spare time I’ll
have them, just in case.

MENTORING AND
INDUSTRY INVOLVEMENT
I call two new interns from the university to confirm
their Saturday appointments with me. I need to meet
with them to determine their interests and what
program they are going to follow for the eight
months they will spend with us. I hope they will
want to work on the marketing plan and be active in
 Section 6.8 The Organization and Management of Hotel Beverage Operations 58

but it is like a part-time [Link] was I thinking My four golden retrievers are really happy to see
when we agreed to do a fund-raising dinner for me.I know they have had dinner and were well
1,000 in February? I’m sure it was the same thing cared for while I was gone, but I feed them again.
I thought when I said I would love to teach an It is the most wonderful thing I do each day. I take
extension class at the University. It all seems so my suit off and get into sweats. It’s time to go for
far away when I say yes. Somehow it all works a walk and tell them all about my day. They agree
out. that making so many changes is just not right. We
devise a plan to keep others from making my day
ENTERTAINING so stressed. Then we talk about the three-day trip
we are taking to Utah the day my inhouse group
It’s 5:00 P.M. and I need to leave for a cocktail ends. It will be our first motor home trip, and we
6.8 THE ORGANIZATION AND
MANAGEMENT OF HOTEL BEVERAGE OPERATIONS
Valentino Luciani

people [Link] have always

BRIEF HISTORY OF made an impact on the evolution of humankind.
BEVERAGES Thanks to modern technology and more advanced
carbon-dating techniques, archeoloA beverage
such as a glass of wine, a beer, or gists have now established with certainty a cocktail has the magic
power of bringing that our species has been around for several

party at a sister property across the street. I am are all excited. It seems my golden retrievers are
joining the vice president of sales and the tired of camping in a tent. Additionally, I plan to
executive director of convention services to spend time working on my online masters degree,
entertain [Link] have a cocktail party and and a motor home will be a good place to work.I
then a 7:30 P.M. dinner and a 10:00 P.M. show. The try not to think too hard about my degree. It
evening is wonderful. Our clients really enjoy the makes it hard to sleep when I think of working on
special attention we give them. When 10:00 P.M. my final project.
comes, I wonder if I’ll stay awake at the show. Now it’s 12:30 A.M. and I need to get in bed.
My fears are unjustified. The comedian is so As I lie down, I resolve that tomorrow will be “the
funny my sides hurt from laughing. I think, what day I get everything done.” hundred thousand
a great career. I get to have fun while I [Link] years—a lot longer than was estimated 50 years
the evening ends at 11:30 P.M. I confirm that I’ll ago. In accepting the fact that alcohol is as old as
play golf in two weeks—just another sacrifice for we are, it would be of great interest to discover
my clients. what type of beverages were consumed over such
a span of [Link] can only assume that the
PERSONAL LIFE earliest beverages were fermented cider-type
 Section 6.8 The Organization and Management of Hotel Beverage Operations 59

concoctions made from various kinds of fruit, or the Mayflower’s captain, the ship was not
brews made from grain, seeds, and anything else scheduled to dock on Plymouth Rock but was
nature had to offer. These drinks were perhaps made to stop there mainly because it had run out
enriched with spices,herbs,and probably more of beer.
exotic flavoring agents, some of which have been Nonalcoholic beverages such as coffee, tea,
forgotten or lost over the centuries. fruit juices, and, later, carbonated beverages have
What is known for certain is included in also made a considerable impact on our evolution
recorded history, and it is relatively recent when and lifestyle. During the past five decades, Coca-
compared to the newly found lifespan of Homo Cola has taken the world by storm. Of the hot
sapiens erectus. In recent excavations,some of the beverages, coffee and tea are the uncontested
first evidence of eating food and consuming a kings. One has to only observe the proliferation
beverage in a communal fashion is found in the of specialty coffee shops and kiosks to begin to
Orkney Islands, close to Denmark. It was a understand the impact of this beverage.
custom then to build dwellings around a common
dispenser where foods and drinks were prepared.
Egyptologists have recently published photos
OVERVIEW
of wall paintings found in pharaohs’ tombs. In The beverage industry grows in popularity every
these remarkably preserved works of art one can [Link] U.S.A.,the official publication of
clearly see Egyptian workers harvesting grapes the National Restaurant Association, reported in
and preparing them for winemaking. The 1995 that total sales for bars and taverns neared
(presumably filled) wine vessels were then placed the $11 billion mark. For the year 2005, total sales
in an orderly fashion next to the tomb. The for bars and taverns are expected to exceed the
Egyptian nobles believed that these beverages threshold of $15 billion in
made the best companions for the pharaoh’s [Link],restaurants,and resorts have for some
eternal travel. time regarded the beverage sector as a profitable
Greek and Roman historians report that wine one. In a medium to largesize hotel, a typical
and other alcoholic beverages played a vital role beverage department can produce a profit of over
in their [Link] fun-loving Romans went as 50 percent of sales. In comparison,a food
far as worshiping a beverage deity: Bacchus, the department shows,at best, a profit of between 15
god of wine. Wine and brew shops, which are and 18 percent of sales. Beverage is also
thought to have been introduced approximately gradually gaining a larger share of sales. Hotel
6,000 years ago, could be found at every street operators report that while two decades ago the
corner of ancient Rome. In the United States, the sales ratio was 85–15 (85 percent food sales, 15
first person on record to own a tavern and sell percent beverage sales), today the average is
alcoholic beverages to patrons was Samuel Cole. closer to 80–20.
His beverage business was already prospering by Before World War II, in a small to medium-
1634. sized hotel and restaurant operation, the person in
Beer,which presently accounts for 51 percent charge of the beverage department was the
of alcoholic beverage sales, carries on a fine restaurant manager. In many properties, a lead
tradition in our [Link] to the diary of
 Section 6.8 The Organization and Management of Hotel Beverage Operations 60

bartender or the wine steward was given the properties the executive chef, who in most cases
responsibility to run the department. acts more as a food director than a hands-on chef,
Today, in a medium to large-size hotel is placed in charge of the food
operation, the beverage department has a distinct
place in the organization chart, and the beverage
manager is the person in charge of running and
supervising all of the department activities. The
organization chart is a diagram
that shows the operation’s Figure 6.3 Organization Chart of
working positions and how Beverage Department in a
they interconnect. The Medium to Large Hotel
beverage manager usually
reports to the food and
beverage director. In a very
large hotel operation (over

2,000), the F&B director reports to the vice

president of food and beverage.
During the last decade, some properties have
adopted a different strategy where there are
separate food and beverage directors. In these
 Section 6.8 The Organization and Management of Hotel Beverage Operations 61

department. He or she enjoys a higher degree of and [Link] wise and competent bar
independence and reports directly to the general manager applies and adapts the fundamental
manager,vice president of operations, or, in some principles of each of these functions to the
instances, directly to the hotel president. The specific needs of the operation. All five functions
same is true of the beverage director. are determining factors in meeting the operation’s
Both of these directors are considered equal ultimate objective: profitability.
in the organization [Link] strive to work It all begins with planning and continues in
together effectively and to communicate daily. directing and organizing so that the staff on a
They are interdependent in many ways but also daily basis diligently adheres to the established
aware of the need for communication. In addition, standards. Examples: checking bartenders’
each must establish a sound working rapport with opening and closing duties, standardizing drink
department heads of other hotel sectors. These recipes, verifying that the bar par stock
include front desk supervisors, executive (established amount of beverage product) is at the
housekeepers, human resource directors, and so proper level, scheduling, forecasting, frequently
forth. Typical of this case, the food manager and communicating with other fellow managers (in
the beverage manager, particularly, come together particular the catering manager and the executive
at the end of the month, when the results of their steward), and so forth.
efforts are included in the same profit and loss The competent bar manager always finds
statement. sufficient time to inspect the underbars (the
Although larger properties find this working area behind and underneath the bar
organization chart modification beneficial to the counter), the jockey boxes (the small
operation,the majority of hotel properties retain compartment next to the ice bin), and the speed
the traditional hierarchy, structuring the chain of racks (where the inexpensive, or well, bottles and
command in the same fashion as for the past six the more popular brand-name liquor are placed).
or seven decades.A typical example of a classic The above are also the areas where managers
organization chart for a beverage operation in a cannot place enough emphasis on how vital it is
large hotel is shown in Figure 6.3. to the operation to continuously apply sanitary
standards and practice the utmost cleanliness.
Glassware must not only be cleaned but sanitized
SHOP TALK AND THE as well.
An important organizational and training
ACTIVE MANAGER function is the sequencing of beverage stock. This
The bar manager or beverage director is the is the order in which spirits and cordials are
person who makes it all happen in relation to hotel placed on the shelves or speed rack. It also refers
beverages. Although specific responsibilities may to the order by which the drinks are called to the
vary from one hotel to another, the fundamental bartender by the serving staff, and it must always
role of the manager is to make certain that the five be the same. Supervising the beverage staff and
basic functions of management are applied ensuring that control methods are foolproof are
effectively. As in many other business sectors, crucial and demanding tasks; sequencing
these are planning, organizing, directing, staffing,
 Section 6.8 The Organization and Management of Hotel Beverage Operations 62

provides part of the structural mix that helps • Checking city and county ordinances
assure consistency of product and service. regarding the service of alcohol and
reviewing state and federal laws on handling
MARKETING AND liquor responsibly.
• Preventing bartenders from committing fraud
MERCHANDISING and attempting illegal practices.
Throughout the competitive hotel industry, • Ensuring proper sanitary standards are
beverage managers consider smart marketing and applied throughout the bar outlets and the
effective merchandising the keys to success. The storage and the service areas.
marketing of the overall operation and the
• Making certain everyone in the department
merchandising of the beverage product require
adheres to proper safety standards.
time, experience, and commitment. To make the
beverage operation attractive to different types of • Writing, rewriting, and updating bar working
patrons and to convey a message of value in the manuals and handbooks according to need.
service of beverages, bar managers and directors • Evaluating the bar menu offerings and,
regularly brainstorm. More trendy cocktails are whenever possible, substituting slowselling
being created daily. Light and refreshing blush liquor brands with more attractive and trendy
wines and sparkling wines are introduced in the ones.
preparation of new drinks. Promotional programs
• In particular, renewing beverage product
and attractive entertainment are featured to keep
selection of specialty beers (e.g., by featuring
lounges full and patrons eager to return.
microbrewed products), brandies, and
Conscientious beverage managers never rest
cordials.
on their laurels—they are always on the lookout
for profitable ways to stay ahead of the • Tracking trends. For example, a current trend
competition. As the beverage sector grows and is apparent in cordials or liqueurs. Beverage
patrons’ expectations increase, there are always operators are finding that light, sweet, and
new and challenging tasks to deal [Link] pleasant-tasting cordials such as Godiva
following is a list of managerial tasks with which White Chocolate, Nocello, Grand Marnier,
beverage managers are occupied on an ongoing Frangelico, Drambuie, and Bailey’s Irish
basis: Cream are enjoying newfound
[Link] are also seeing lots of
• Introducing control systems that are more movement in attractive new products such as
effective in monitoring the operation—for Remy Red and the fabulous premium tequilas
example, upgrading forms for properly and Polish vodkas.
storing and issuing beverage products and for
inventory purposes. • Last but not least, assuring the consistency
and quality of the service provided to the bar
• Establishing ongoing training sessions.
and lounge patron.
• Evaluating beverage staffs’ work
performance. HUMAN RESOURCES
 Section 6.8 The Organization and Management of Hotel Beverage Operations 63

Outstanding service is the result of a sound volume so that potential revenue can be
organization and diligent recruiting. Bartenders maximized. It also helps greatly in effectively
and beverage servers can be talented and willing, managing beverage stock, payroll, staff
but if they are not provided with the necessary scheduling, and other expenses.
resources, total management support, Many hotel executives agree that the first
encouragement, and guidance, their efforts will decade of the twenty-first century will be
be in vain. A situation may arise where the significant for the beverage industry. One
deciding factor in the delivery of fine and peculiar prediction is that, although total hotel
consistent service depends less on personnel revenues are expected to grow considerably, the
skills and attitude than on the role played by ratio of beverage sales to room sales will remain
management. the same or decrease slightly. Because of the
Service is the backbone of the hospitality terrorist attacks in 2001 and the ongoing wars in
[Link] to Kotschevar and Luciani the Middle East, hotel revenues have not met
(1996), “with the new millennium passing by, expectations. Beverage sales, though, have seen
customers’ expectations are on the rise.”An an increase in revenue growth. Much of this is due
effective leader finds the proper ways and means to vigorous promotion and merchandising,
to provide the employees with the tools they need particularly of new cocktails and ambitious—
to meet these expectations. even spectacular—wine sales programs.
Progressive beverage managers now also use Independent bar and lounge operators also feel
the empowerment concept. Empowerment is a confident that, unless more unpredictable events
management decision by which an employee is take place, the rest of the decade will be
given authority to take steps outside the spectrum challenging but prosperous.
of regular duties and make certain decisions that Beverage distributing firms are also
are normally in management’s domain. optimistic. They foresee a wider availability of
According to many new beverage managers, the beverage products not only for the hospitality
progressive coach approach seems to yield industry but also in areas such as convenience
positive results among beverage staffs. The old stores, supermarkets, and beverage-specific retail
disciplinarian management style is increasingly outlets. Beverages that are expected to
out of place in today’s beverage business world. substantially increase in sales volume are bottled
waters, bottled specialty teas, single-malt Scotch
whiskys, Cognacs, aged bourbons, premium
THE FUTURE OF tequilas, and [Link] is a general
consensus among vendors that beer sales will
BEVERAGE OPERATIONS remain static and that wine will experience a
In medium to larger hotel properties, like all marginal but steady growth, particularly from
department managers,beverage managers are new areas of production, both nationally and
required to prepare a business forecast based on internationally.
historical data, hotel occupancy, and special event It is expected that federal and state liquor laws
bookings for the forecasting period. An accurate will remain substantially unchanged, with minor
forecast helps the manager prepare for clientele [Link] also appears that the states will
 Section 6.8 The Organization and Management of Hotel Beverage Operations 64

maintain the basic structure of belonging either to concerns. During the past decade, it has been
control or license categories. frequently reported that staffing or finding the
Many beverage managers are concerned about person most suitable for a particular job is
government-imposed taxes on liquor and hope becoming a tougher management function. Many
they will not be increased. managers agree that staffing responsibilities are
Beverage managers are concerned about the requiring more time and effort than ever before.
continuing lowering of the blood alcohol Part of this is attributed to labor trends. The pool
threshold for driving under the influence (DUI) of of steady and loyal workers is decreasing in size.
alcohol or drugs. The lower the threshold—say, In addition, the hospitality industry is
0.08—the more careful in hiring, training, and experiencing unprecedented employee turnover.
supervising managers have to be. Over-service of A major restaurant company has recently reported
alcohol is an industrywide problem that presents to me employee turnover of nearly 200 percent
managers with a variety of challenges. It is for hourly employees, 60 percent for clerical and
important to have policies under which the secretarial staff, and 25 percent for managerial
manager and operation work that minimize the staff. The turnover ratio of bartenders and
risk to the business and to the public while legally cocktail servers was reported to be almost the
selling and serving beverages. same as that of typical dining room staff such as
Education in beverage management is food servers and bus persons (Lattin, 1998). One
expected to extend to new horizons. Sonoma State can imagine the frustration of a beverage manager
University offers a bachelor of science degree in who, after spending considerable effort, time, and
wine management. Through a wellplanned company money in coaching and training a new
university extension program, the University of bartender, finds out she is planning to quit the
California, Davis, is expanding on specialized following week.
short courses associated with their degree What can be done to deal effectively with this
programs in enology and viticulture. The William concern? Rewards as motivators provide some
F. Harrah College of Hotel Administration at the positive results. Other means of providing
University of Nevada, Las Vegas, started a monetary incentives so the operation can retain
beverage management major commencing in the employees longer may also be effective.
fall semester of 2001. Cornell University’s School It is strongly recommended here that the best
of Hotel Administration, among others, is measure management can undertake for this
considering expanding their professional purpose is to provide the employee with a
development courses and adding courses on comfortable working environment, promote
handling and serving alcoholic beverages with teamwork and camaraderie, and foster healthy
care. working relationships. In short, the beverage
manager is challenged to become the employer of
AS I SEE IT choice for beverage professionals.
In general, the beverage future looks brighter
While reviewing the industry’s projections, it than most other sectors of the hospitality industry.
would be difficult to leave out hotel executives’ However, the managers and directors who truly
most recent comments on labor issues and will make a difference will be those who step out,
 Section 6.8 The Organization and Management of Hotel Beverage Operations 65

participate, and make things happen. The and list bar special drinks, promotions, and happy
aggressive new manager always finds ways to hour times; and never rests on his or her laurels.
establish a good rapport with community leaders The modern beverage manager is no longer
and is tireless in devising and developing new just the head bartender. This professional is
means of attracting additional [Link] responsible for millions of dollars of the hotel’s
possible,he or she makes the effort to attend assets and operates in a highenergy, fast-paced,
beverage conventions and trade shows; uses the and challenging environment. It’s a lot of fun,
hotel website to reinforce marketing strategies though, and rewarding, too. It is a managerial
position with a solid future.
wearing short pants, fell into a puddle of his own
COURT bloody feces as he hit the floor. As it all happened
Nancy Swanger so suddenly, those who were witnesses said it was

6.9 CASE STUDY: CRISIS IN THE FOOD

Morgan Black is the director of operations of an like the boy must have voided as he was
on-property food court made up of five branded collapsing, as there were no signs of any problem
quick-service restaurant concepts and one full- prior to the actual fall.
service casual dining outlet. The resort hotel, of As one might expect, the scene caused quite
which the food court is a part, attracts affluent a stir among guests in the area. One of the shop’s
guests who are traveling with their families. The employees promptly called 911 for an ambulance.
food court is located in a common area not far Within a very short period, paramedics arrived to
from some of the resort’s most popular, kid care for the boy. It was several minutes before he
friendly recreational activities. It also attracts was stable enough to transport, as they could not
local guests who are not staying at the resort, but get the bleeding to stop. Morgan, who was on
just visiting. property, arrived just as the boy was being
One Sunday afternoon, when the hotel’s transported to the local hospital for treatment.
2,500 rooms and suites were nearly at full Of course, a crowd had gathered, and talk
occupancy, an incident occurred at the branded
sandwich shop that was both bizarre and
frightening to those involved.
As was typical of the property, lunchtime in
the common restaurant area was busy and
extended well into the afternoon as families
arrived for weeklong stays. A father and son
approached the counter of the sandwich shop to
order a bite to eat. They were nearing the register
to pay for their meal when the son suddenly
collapsed and fell to the floor, hitting his head on
the glass window separating the customers from
the sandwich preparation area. The boy, who was
 66

Section 6.10 Case Study: Outside the Box in the Food and Beverage Division

of the tragedy was spreading rapidly throughout Points to Consider

the property. The store was immediately closed • Involvement of the health department?
and the area around the sandwich shop cordoned • Notification of the brand’s corporate office?
off. In trying to assess the situation, Morgan Condition of the boy?
discovered the following: • Clean-up process?
1. When the young boy hit the floor, the puddle • Treatment of contaminated items?
of bloody excrement splattered
• Handling affected guests and employees?
everywhere—even hitting other guests who
were in line. • Methods to reassure resort guests?
2. One of the employees, who probably reacted • When to reopen and resume business as
without thinking, began to clean up the mess • usual?
with her bare hands. Implications of what happened—short and
3. The identities of the father and son were not • long term?
known. Role of the resort’s crisis team?
4. A reporter from the local newspaper was a • Training gaps?
guest at the food court that day and wanted •
comments on what happened.
Suggest a plan for Morgan’s handling of the
situation.

6.10 CASE STUDY: OUTSIDE THE BOX IN THE FOOD AND

BEVERAGE DIVISION
 Republic of the Philippines
Cebu Normal University
Osmeña Blvd. Cebu City, 6000 Philippines
Email: info@[Link]
Telephone Trunk Line: (032) 254-1452 / (032) 254-6814
Website: [Link]
COLLEGE OF TOURISM, HOTEL AND HOSPITALITY MANAGEMENT

The Corporate Food and Beverage Committee, through its executive director, has ordered each hotel in the SunRise
Hospitality chain (11 medium-size, full-service hotels situated in the Southeast,South,and Southwest) to submit a
plan to completely rethink one restaurant in each hotel. SunRise Hospitality specializes in catering to the upscale
business traveler and, increasingly, the high-tech companies that are now moving to the South from California, the
Seattle region, and the Northeast. Their average room rates are consistently in the top 15 percent of all hotels in
their market areas. Historically, though, this has been a fairly conservative and risk-averse hotel company.
The corporate office wants to change this and, in the process, to involve each hotel in decision making. The
executive director of F&B wants to evaluate plans from each hotel’s food and beverage director that “think outside
the box.” Among the ideas floating around the company on the F&B directors’ grapevine are the following:

• Feature menus that emphasize local or regional cuisine. The idea here is to utilize fresh ingredients and local
meat, produce,
and seafood,and to feature the ethnic and cultural diversity of each hotel’s local market area. One goal of this
plan is to make the hotel restaurant appeal to local clientele in addition to its guests.
• Outsource one restaurant to a wellestablished regional independent operator.
• Outsource one restaurant to a national chain.
• Hire a celebrity chef to bring prestige and favorable publicity to the hotel.
These are only a few of the possibilities. As food and beverage director, you have brought this plan to a meeting
of your staff for purposes of general background discussion and ideas about how to proceed. Included in this meeting
are the executive chef and chief steward, the manager and assistant manager of your formal French-service dining
room, the wine steward, and the director of purchasing.
After presenting the corporate plan, you ask for ideas and comments. The chef, who is French, is absolutely
devastated and seems to be treating the corporate directive as a personal insult. He walks out in a huff, threatening
to pack up his knives and recipes and go back to [Link] restaurant manager is interested in the corporate idea
but says she has just spent the last five months hiring and training about half of her restaurant staff in tableside
preparation and service of the French menu. She is worried that switching menus this fast may cause her operation
to suffer, at least in the short term.
The wine steward considers the challenge somewhat ambiguous because, depending on what eventually is
decided, he will have to choose a complementary wine list to enhance the new concept or lose his job to an outsider.
The director of purchasing is intrigued by the idea of exploring new local [Link], he too worries that
some of the options may diminish his responsibilities.
Your job as director of food and beverage is to help each department head to develop a plan that will satisfy his
or her concerns while following the dictates of corporate policy.
(Note: Additional insights into potential solutions to this case may be gained by reading the essay by C. Lee
Evans later in this book.)

SDF-EAI-403-001-01