Make Your F&B Strategy Accessible — Photo by UCF

Capital projects, continued improvement, and targeted revenue plans are backlogged, but the U.S. travel rebound has helped the hospitality industry begin to recover.

As evidenced by the numbers according to AHLA, 2023 room revenues are projected to reach up to $197.48 billion, up from 2019's $170.35 billion.

Inflation has not been considered in this calculation, but the trendlines are moving in the right direction, and revenue course correction will most likely take several years.

Michael Nhu, Senior Economist and CBRE's Head of Global Hotels Forecasting seems to agree - Despite the moderating pace of GDP growth, several travel-specific tailwinds coupled with employment growth and wage increases should result in another record year for RevPAR in 2023." However, Warren Marr, US Hospitality & Leisure Managing Director cautions: While US hotels have continued to outperform expectations, recent bank failures, a liquidity crisis and rapidly slowing economy are expected to have a downstream impact on hotel performance for the balance of this year and into next."

The U.S. travel and hospitality 2023 rebound, dubbed 'revenge travel', is exhibited with generous price elasticity of demand, and operators are eager to take advantage of every new generator of incremental revenue. However, hotel owners, operators, and managers who are still teetering on red/black/red/black financials, are digesting these mixed future forecasts, analyzing every margin opportunity, which often means venturing into the 'trend spend game'. Following suit, this year's hotel food and beverage trends are also continuing to emerge from the post-pandemic aftermath, as the U.S. public health emergency recently expired May 11, 2023.

This summer's F&B 'Hot Takes' evolved with hopes of phoenixlike renewals, revitalizations, and rebirths, and now we consider fall fashions and 2024 marketing trends. And a different language vibe has emerged - a simmering alphabet soup with associated social media lingo - from 'AI' (artificial intelligence) to 'ML' (machine learning) to 'DL' (deep learning) to Robo to Kiosk to YouTube to Instagram to hashtag contests to influencer giveaways, all leveraging marketing and branding efforts. The F&B promotion game has become more intriguing and complex.

Before jumping on the trend wagon (i.e., general direction of the 'eats and drinks' market; the current style; vogue) for the fall and into 2024, let's not get too far ahead of our skis. The ideal hotel food and beverage choice/s must be strategic, targeted, and financially astute, as the hotelier's conundrum prevails - continued human capital challenges with the existing revenue streams. Bottom line – analyzing numbers with AI, etc. can be helpful to gather historic aggregate data, but HI (human intelligence) is much more crucial when it comes to investing in the next F&B incremental profit maker. What is the smart play moving forward?

Hotel owners are eager to take advantage of the 2023 rebound and are tasking General Managers and F&B Directors to increase the top and bottom lines. All excellent thoughts indeed as hoteliers and their valuable F&B leaders have strategized a wide variety of options for reaching their target markets. However, as many of us have 'found out the hard way', joining the bandwagon on a popular trend might work well for one brand's demographic and psychographic, but folding in that same trend into your brand's strategy may not be as successful nor lucrative.

In fact, incorporating or copying another brand's F&B strategy may result in the opposite effect intended, thus damaging your brand because it will not feel authentic to your brand's standards or character. All of this is to say that jumping early on an F&B market trend could lead to a successful campaign, but there is also great risk if the F&B trend is not well-executed to reach the intended audience. How, then, can hotel brands make these time-sensitive F&B marketing decisions? Consider these five tips when deliberating which latest trend to follow.

1. Eyes on the Prize

Let's start with the most important question: What is the purpose of your F&B strategy improvement or venture? Is your mission to inform, persuade, or remind? Is this an attempt to entice the guest to try a new product or upgrade? Is this a desperation move to save the annual bottom line, or a quick fix to build incremental revenue during slow days of the week or a likely seasonal downtime period? Are you conducting an experimental introduction of a new F&B product or strategy that you want to develop over time? Or a grass roots campaign to build rapport with the local community in an effort to augment future F&B sales in the dining room or catering space? Perhaps, a new F&B strategy or introduction will simply support the hotel's image? The purpose of your new F&B strategy will determine everything you do, and this includes food and/or beverage product type, production time, price point, brand advertising method and frequency/timing, packaging and delivery method, social media approach, and back of house labor quantity and quality.

2. Understand your Peeps and Comps

Stated in a more relevant way, which of your hotel's market segments are your best bets? Is it business, leisure, individual, group, weekday, weekend, seasonal, or holiday markets? Perhaps you need to take a deeper marketing dive into the local area residents, businesses, and/or social groups, who have F&B needs? These groups might include Gen X, Y, Z, seniors, families, couples, singles, or a niche market like techies, social, sports, religion, ethnic, or fraternal. Generally, it makes more sense to concentrate on big chunks of potential business versus a small sub-niche market. Using competitive insights, external data intel, the existing loyal guest audience, and market surveillance to understand if you should execute on adopting a F&B marketing trend.

Begin by benchmarking - visit the local competitive set of hotel F&B operations and the local restaurant offerings. Conduct further market research by tapping into restaurant and hotel websites, blogs, Instagram, and other social media that provide concepts outside of your geographical area - to learn about what makes these F&B trends successful in those markets. The goal is not to copy ideas, but rather to learn how the competition is leveraging new F&B trends, and to what extent they are successful in this endeavor. Those hotel organizations who are the early adopters of a F&B trend are most likely to experience the inevitable successes (and drawbacks) that emerge from being first to market. Learning from these early adopters will help your F&B team to avoid challenges, which in the end, saves time and resources.

Once you have completed your local F&B market research, perhaps together with your F&B team, discuss the opportunities with the GM and Sales and Marketing gurus. Now the real work begins – surveying your most interested stakeholders by sharing content with your trusted guests. Your hotel guests are an important source of HI (human intelligence). Invite 7 to 9 your loyal regulars to join you for an ad-hoc 'Client Advisory Board' during a late afternoon nosh and beverage hour in the hotel lobby or at a restaurant on property. This is an ideal number from the selected market you are targeting. Be mindful that proper planning for this feedback session will prevent a poor promotion.

For example, when you extend the invitation to join you for this informal focus group, explain what market segment/s you will be discussing. Start the session by defining its purpose and then ask for their F&B ideas (i.e., 'wants and needs') first. The next step will be to present your own research from similar hotel/F&B brands. What is important here is to gather honest, authentic opinions from all members of this focus group, as opposed to allowing a few dominating forces to control the session. It is important to note that any new F&B trend has advocates and critics, and the purpose of the session is to collect a range of information from this HI (human intelligence). The bottom line is to know your audience and the competition before executing on an F&B strategy.

3. The F&B Experience Should Inform, Persuade, or Remind

The next step in the F&B strategic process is to create an eye and ear catching experience that resonates with the hotel brand DNA and backstory. Further, this experience should build trust with your target market as it gains public relevance and attracts new guests or market segments, while still resonating with your existing market. Is your hotel's F&B mission to inform, persuade, or remind? Contemporary F&B promotions must, must, must provide an experience for the guest, including as many of the following four elements as possible: (1) Education (e.g., where originated, farm to table, garden fresh ingredients, health benefits, and dietary restrictions); (2) Entertainment (e.g., costuming, memorabilia, futuristic, mascot, robotics, gaming, employees' introduction, communication, and storytelling); (3) Esthetics (e.g., color, texture, shape, aromatherapy, sound, and balance); and and/or (4) Escapism (e.g., international flavors, experiential fusion, contemporary or classical cuisine, nostalgia, or ingredients known for health and wellness).

All of these should be concepts not readily duplicated at home, as your F&B team should create an experience worthy of the trip to the hotel. The ultimate goal here is to create a holistic experience, crafted for a particular site and delivery, which might be at poolside, in the main lobby, on the rooftop, or in the conference foyer.

Other such unique F&B experiences could include grab 'n' go, chef presentations, in-room dining, concierge-level club F&B offerings, outdoor pop-up mini-stations, small plates or handheld foods anywhere, communal dining, pairing specialty cocktails and seasonal light bites with acoustic musical entertainment, and on and on. Take advantage of the three most profitable F&B trends of all – beverages, beverages, and beverages. Every generation and gender crave the hot and cold liquid refreshments, from lattes to bubble tea to fermented Kombucha, sports/energy, functional/ nutritional waters, hybrid RTD (ready-to-drink) cocktails are pre-packaged, single-serve, and ready for consumption provide guests a convenient way to enjoy their favorite alcoholic/non-alcoholic beverages via the grab 'n' go.

According to Zippia Research, the fastest growing segment of the beverage industry is bottled water, which we can anticipate an annual growth rate of 7.4% between 2021-2026. These estimates predict a much faster CAGR (compound annual growth rate) compared with the beverage industry over the same duration, at 1.7%. Self-help wines and beer, cashier-less grab 'n go with bottled smoothies, veggie and fruit blends are all attractive to hotel guests. If your beverage program managers want to get in on the act, promote a craft cocktail, or a wine tasting session. Not only are beverages a safe trend bet, but the profits on these liquids are often the highest profit percentage of any product sold in the hotel, as labor is extremely low, and when served in its container, these beverages do not require glassware, napkins, mixing straws, etc., which reduces bar supply inventory.

Final piece of advice - keep your new F&B strategy simple, short, and honest. Gimmicks, multiple restrictions, and other barriers are a curse. People have very low attention spans and have a distrust for ads – therefore, use your HI (human intelligence) market research as an opportunity to understand how your guests wish to access your F&B rollout.

4. Can you Deliver on Your F&B Promise?

Keep in mind that any promotion or ad, via any channel is making a promise to do something for your target audience. Before you and your F&B department make that commitment/guarantee, it is imperative that your hotel F&B team has considered appropriate staffing, training, skill sets, timetables, product availability, purchase price volatility, forecasted price point elasticity of demand, and scenario planning for exceeding sales projections or for terminating the F&B marketing campaign. Regardless of the time and resources put into the planning of an F&B rollout, or any hotel rollout, meeting or exceeding guests' expectations is the goal. The service and product promise is a commitment that builds trust, and trust builds relationships with your new and existing hotel F&B guests, and their friends, neighbors, and business associates.

5. Don't Forget to Plan Your Start-up and Follow-Up

Clearly document up front what the expectations are for cost of the F&B campaign and its associated product and service delivery. Keep track of the number of covers and check averages per day part in advance and throughout the rollout. As the F&B marketing campaign for your particular trend spend evolves, maintain copious notes by day part, day, week, weather, competing local events, price blowback, and buyer feedback (i.e., server inquiries, online feedback when appropriate, hand-written surveys, secret shoppers, etc.). This work will pay off as clear F&B marketing campaign goals, observations, and reporting is key to understanding if the trend is working.

Owners and managers venturing into the trend spend game must be strategic, targeted, and financially astute when choosing the ideal F&B fashions to follow. AI (artificial intelligence) can be helpful to gather data, but HI (human intelligence) is much more powerful when it comes to investing in the next F&B incremental profit maker.

Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.