Almost every hotel management company brand has specific guidelines regarding the design of all-day dining concepts. Usually, the size of the all-day dining outlet is proportionate to the number of rooms; therefore, a hotel with a greater number of keys will have a larger all-day dining area. In addition, the greater the number of rooms, the greater the linear length of 'buffet offering' is required to support those rooms. This can ultimately result in the space being underutilized, which in turn, leads to a potential revenue loss should the area be used for other purposes.

Conventionally, the function of an all-day dining is to support the rooms department, serving as a convenient F&B outlet for internal guests. As the industry gradually shifts away from this model, it is the hotel asset manager's responsibility to advise both their owner and appointed operator to revise the dining concept. This article addresses four key reasons.

Firstly, the function of the all-day dining should not solely support the rooms department. Hoteliers and owners should view it as an independent, concept substantiated, outlet and revenue generator. According to Deloitte Tohmatsu FAS, among full-service hotels in Japan, 34.3% of revenues are generated by the rooms department, and 60.5% originate from F&B activities. Based on STR Global, all-day dining revenue comprised roughly 59% of total F&B revenue in Japan, implying that 37% of total revenue could potentially be generated from all-day dining. This highlights the importance of such outlets in generating revenue, calling for hoteliers and asset managers to assess the space which is often conceived as an all-day dining outlet and revitalize the concept.

Second of all, hotels should not be limited to solely addressing the needs of their in-house guests. They should activate their dining concepts and increase revenues by catering to the local neighborhood. Doing so requires considerable capital and time to be invested into executing a successful F&B concept and design that entices both internal and external guests, taking into account the tastes and habits of the local community. The main outlet for the hotel needs to be designed to be 'friendly' to its neighborhood through design, pricing, quality and service, otherwise, the purpose of a conventional all-day dining outlet will only be to support half-board, full-board or bed and breakfast packages.

Thirdly, the all-day dining space is commonly underutilised and only optimised during breakfast, remaining empty for the rest of the day. The square footage allocated to the all-day dining is often calculated based on the number of guests supported by the hotel inventory. During lunch and dinner, hoteliers tend to offer buffets despite the fact that such concepts rarely attract internal guests nor do they generate high external footfall. An outlet that remains empty throughout the day is not an optimal source of profitability; because utilization of the area could be optimized by implementing an alternative concept that is positioned to generate revenue across all meal periods. The outlet needs to be concept driven with market research that supports its cuisine and style. It will provide breakfast for in-house guests but more importantly it will be known for the cuisine and concept it trades under for both lunch and dinner.

Lastly, the buffet concept detracts from offering an enhanced dining experience. The food is produced in mass quantities instead of being tailored to specific client's needs, leading to mediocre food quality and increased wastage – an issue that is often reflected in online review websites.

As a hotel asset manager, it is important to be able to present alternative strategies to optimise space and maximize profitability. The market is evolving and indicates that hotels should assess redeveloping all-day dining outlets into more attractive concepts that are open for breakfast, lunch and dinner. The role of the restaurant manager is imperative in creating a distinct ambiance and developing local promotions to attract external guests to the restaurant. The concept, food quality, menu and design of the restaurant should be aligned with market demands and current trends.

On a global scale, there has been resistance towards altering F&B models, especially across large hotel chains which have yet to move away from the traditional all-day dining model. Therefore, instead of adhering to rigid brand standards, hotel asset managers should be able to advise both the hotel owner and operator to recognize the outlet as a business within the hotel rather than treating it as a support department and it should be measured in the same way as independent standalone operations on the basis of performance. This way, all stakeholders can attend to creating a unique experiential concept and move away from outdated and costly operations.

Lucca Martin Manzano
Asset Analyst
+971 4 455 0100
TFG Asset Management