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Thesis defense Damien Marchenay Doctor of Hospitality and Tourism Management; Polytechnic Hong Kong May 2020
- 1. ARE CURRENT HOTEL RESTAURANT OFFERS FAILING? AN ANALYSIS OF THE MAIN EXISTING BUSINESS MODELS OF FOOD AND BEVERAGE OUTLETS IN UPSCALE AND LUXURY ASIAN HOTELS Doctor of Hospitality and Tourism Management By Damien MARCHENAY Polytechnic Hong Kong Defense, 27th May 2020 (Damien.marchenay@gmail.com) 1 Damien Marchenay Doctor of Hospitality and Tourism Management
- 2. Define the issue Root CauseImplications Hotel F&B Business model is in decline Hotel groups are loosing F&B DNA Hotel F&B Offer ≠ Current Demand Problem Statement 2Damien Marchenay Doctor of Hospitality and Tourism Management
- 3. Guests Disrupters Hotel industry RQ1 Do guests see hotel restaurant as an attractive concept? Power of Buyers - Define the root cause - Analyze the relationship between the stakeholders - Propose solutions Objectives RQ3 Are the hoteliers at fault for the current decline in how hotel- managed restaurants are being perceived? Implication of hoteliers RQ2 How are freestanding restaurants impacting F&B hotel business? Threat of freestanding Research questions and objectives 3 Damien Marchenay Doctor of Hospitality and Tourism Management
- 4. Few research on the subject available Dated literature from the phenomenon in Europe and US Professional websites relate the issue for the last 20 years with no solution and no evolution Recurrent problem Limited literature Vintage Challenge for the literature review 4Damien Marchenay Doctor of Hospitality and Tourism Management
- 5. Restaurants should be considered as business units Guests are super informed and their demand are in constant evolution and stimulate new concepts Restaurant in hotels are losing attraction & market share vs freestanding restaurants Freestanding restaurants have greater advantage vs Hotels ’ones F&B is a significant financial driver of the hospitality industry Summary from literature review 5Damien Marchenay Doctor of Hospitality and Tourism Management
- 6. Freestanding restaurants Competitive advantage Concept to fit a space not a demand Lack of marketing No feasibility study No defined USP Heavy organization Approval / Empowerment High Price No creativity Do not target locals Fit the local Market / Affordable price / Creative Manager = Entrepreneur Conception 1st and find best location Profit oriented vs % 6Damien Marchenay Doctor of Hospitality and Tourism Management
- 7. Methodology 7Damien Marchenay Doctor of Hospitality and Tourism Management
- 8. 8 Data Collections Interview by Skype / Phone Average 20 minutes 3 by written Findings Interviews invitations: Cold emails / personal network 23 positive answers Mixed Method: Quantitative: Customers Qualitative: Specialists Survey design: 15 questions with 2 open ones 1st survey test for 20 pax 2nd final survey Define the method from literature review Data Collection & analysis: 458 valid questionnaires Survey sent to Social Media Average of 4 minutes Research design Transcript Manual transcript & Text mining Damien Marchenay Doctor of Hospitality and Tourism Management
- 9. 9 Voice of the Hotels Operational experts Voice of the restaurant operational experts Voice of the Hospitality Corporate experts Hear the different voices Voice of the Corporate restaurant expertsVoice of the guests Survey Damien Marchenay Doctor of Hospitality and Tourism Management
- 10. Quantitative 10Damien Marchenay Doctor of Hospitality and Tourism Management
- 11. 11 RQ: How are freestanding restaurants impacting hotels F&B Business? Recommendations from the guests . RQ: Do guests see hotel restaurants as an attractive concept? Survey objective Damien Marchenay Doctor of Hospitality and Tourism Management
- 12. 12 Less than 1 time out of 10 in Hotels restaurants Dinner in a restaurant 1 to 2 times per week Age between 26 to 45 65% 52% 55% 98% Panel = 458 72% 21%4% Male gender 18% Prefer restaurant in a hotel Damien Marchenay Doctor of Hospitality and Tourism Management
- 13. 13 Price Service quality Concept Food Quality Trigger for patronization in a restaurant 76% 45% 42% 36% Less important More important Other 5% Damien Marchenay Doctor of Hospitality and Tourism Management
- 14. 14 Negative sentiment: Global 82%; Asian 80% Lost Attraction Poor value for Money Prefer freestanding Guests perception of hotel restaurants Negative sentiment: Global 52%; Asian 53% Neutral sentiment: Global 30%; Asian 29% Negative sentiment: Global 61%; Asian 56% 0% 10% 20% 30% 40% 50% 60% Price Concept Food quality Service Global Asia Weakness of hotel restaurantsSurvey personal sentiments for hotel restaurantsWeaknesses of hotel restaurants Damien Marchenay Doctor of Hospitality and Tourism Management
- 15. 15 Price Global: 59% Asia: 66% Concept Global: 48% Asia: 48% Food Offer Global: 52% Asia: 52% Competitive advantage of a freestanding Damien Marchenay Doctor of Hospitality and Tourism Management
- 16. 16 Word cloud result from the open questions Why dining in hotels? Personal Business Convenience to eat where you stay Vacation Convenience to eat where you stay (resort etc.) Room related Business Group conference Guarantee of quality Positive part of no surprise : Good service / Good / Special occasion Fun Food quality Concept LocalDamien Marchenay Doctor of Hospitality and Tourism Management
- 17. 17 What do the guests want? (Overview of the open question: Do you have any advice for hoteliers?) Price vs quality uneven compared to other eateries Separate Image F&B vs Rooms Be a local player & fill a gap Full conceptualize the dining offer Need a strong innovation standpoint Value for money Adopt freestanding codes Concept Dust off all marketing strategies Direct communication via social media Stop everything for everybody Concept around a specialty / Person / dish Maintain and even improve the quality of service Marketing Food Specialist Service 82% 30% 29% 18% 17% 17% Damien Marchenay Doctor of Hospitality and Tourism Management
- 18. Qualitative Voice of the Experts 18Damien Marchenay Doctor of Hospitality and Tourism Management
- 19. 19 Restaurant Managers - Robuchon HKG & SGP 3* - Le Dome HKG / DB Singapore - Gordon Ramsay China Corporate F&B Manager Alain Ducasse Restaurant Owners - Ecriture, Fine Dining (2*)Hong Kong - Le boeuf a 6 pattes Bistro Singapore CEO Dogus B.V (Hakkasan, Zuma etc.) 1 2 3 1 Freestanding executives Damien Marchenay Doctor of Hospitality and Tourism Management
- 20. 20 Issues in hotels management Hotels are not a local player Concept and management is not fitting with the demand Guest are not loyal Price are often not competitive Freestanding = Disrupters & Solution More attractive concepts Purely F&B oriented Business model to be inspired in hotels Freestanding = Mass Influence of an Asset manager Expect short ROI Real estate minded Hoteliers are not F&B Experts No new F&B concept Concepts dated (>3 years) Hotels lost F&B DNA F&B = financial burden Asset Light to F&B Light to service light Sense of convenience only 5 64 2 31 Convergences Lost the sense of Restaurant = Destination Inefficient marketing Hygiene Service standards Damien Marchenay Doctor of Hospitality and Tourism Management
- 21. 21 Hoteliers are too Real Estate oriented Hotels have all the resources to succeed Large team supporting the rooms , Marketing etc. and financially diversified Pressure from Freestanding by numbers Freestanding are newer As keep closing and new one openings Lack of empowerment from Managers (Too much validation process pyramidal organization chart) Manager are disconnected from their customers in hotel dues to too much paperwork / admin Differences between CEO & Operators Restaurant CEO/Corporate Restaurant Owners / MGR Damien Marchenay Doctor of Hospitality and Tourism Management
- 22. 22 F&B Hotel Operator EAM / Director of F&B / Hotel Manager Shangri-La Hong Kong / Peninsula Bangkok / Pullman Bangkok / Rosewood Asia / Icon Hong Kong Sofitel Bangkok Global Executives VP F&B: Accor / Shangri La / Peninsula / Pan Pacific Regional Executives VP F&B or regional manager: Four seasons / Marriott / Starwood / Hyatt / Marina Bay Sands 5 4 Hoteliers 7 Damien Marchenay Doctor of Hospitality and Tourism Management
- 23. 23 Disruption vs lack of reactivity Management Pyramidal organization Management are being pushed down Downgrade of terms: Outlets for Restaurants or venues Asset managers pressure Rental per SQM vs Operation profit Shorter ROI Reduce investment / Concept cost Hotel has high fixed cost Hotels groups need to Put F&B in their DNA Need a connection with the local market Focus on USP Profit opportunity F&B sell lifestyle (Nobu etc.) Concept Over-conceptualized F&B that scared owners Turnkey: Locally not relevant Lack of spirit of restaurants that happened to be in hotels Need to be physically and markedly disconnected from rooms Evolution Need of safety decrease, therefore guests are more daring Marketing more accessible, easy and cheaper (social media). 5 64 2 31 Global and regional corporate hoteliers Freestanding are more locally relevant Hotels F&B concepts are difficult to change Hotels are stuck with standards New Players / Delivery etc. Damien Marchenay Doctor of Hospitality and Tourism Management
- 24. 24 Disconnected marketing Management Pyramidal organization Administration are time consuming & create frustration No freedom ROI pressure Low profit generating space are being questioned Improve creativity like lobby converted in profitable space F&B DNA is fading from Hotel groups Focus on profitable F&B like conference Less restaurants per hotel Disruption Other eateries emerging are strongly pushing the hotel restaurants F&B being a driver Strong business unit Profit generator for banquet and key restaurants Outlets business unit to be divided as P&L Marketing driver with lifestyle image (Maggie Choo) 5 64 2 31 Operation hoteliers Hotel marketers are not locally relevant Generation Gap of the deciders Priority for the rooms Not expert in social medias Damien Marchenay Doctor of Hospitality and Tourism Management
- 25. 25 Main findings: DESTRUCTION OF F&B DNA FROM HOTEL GROUPS Asset manager requesting short ROI Hotel defines a high profit margin operation with room focus Hotel group neglects the F&B outlets as low GOP rewarding and heavy operation Hotels lose the F&B DNA in their concept brief Bland and not competitive F&B F&B do not gain in popularity Damien Marchenay Doctor of Hospitality and Tourism Management
- 26. 26 Confronting findings research vs existing literature t New dimensions All findings from literature confirmed by analysis No findings to reject statement from the literature No divergence Evolution of owning structure influence (Asset Manager) Disconnection from the manager to his daily operation Positive note as hotels has all tools to react Damien Marchenay Doctor of Hospitality and Tourism Management
- 27. 27 Convergence with literature Guests Corporate Restaurant Restaurant Manager owner Corporate Hoteliers Hotel operator F&B is a hospitality financial driver Restaurant = business unit Guests are super informed And stimulate concepts Restaurants in Hotels Are loosing attraction Freestanding restaurant Affecting market share Damien Marchenay Doctor of Hospitality and Tourism Management
- 28. 28 Guests are willing to give a chance to hotels Marketing to be more dynamic and done by recent generations Hotels has all tools to overcome the situation To be a local player Following freestanding codes Operation management: More empowerment Flat organization Stop disconnection with guests Owning structure lead to different pressure & requests New dimensions from the research Damien Marchenay Doctor of Hospitality and Tourism Management
- 29. 29 State of emergency to bring F&B back to the DNA Restaurants are one of the only USP vs Airbnb From Asset light to F&B Heavy Hotel chain to force hotel owners or to rent space in their hotels to create their own best duplicable practices. Purchase knowledge with acquiring restaurant group such as AD or Dogus B.V. Divide F&B and rooms management Divide totally the two entities from corporate to operations Re-create business model of Freestanding group in Hotels Create a F&B brand such as celebrity dining restaurant chain internally from the corporate to the operation, adapted with the local flavor Advice from the author Damien Marchenay Doctor of Hospitality and Tourism Management
- 30. 30 Would have been ideal to share the findings to the panel to hotel owners to write the conclusion 02Confront findings A survey could have been performed to have more investigation on frustration from operation managers 03More data from operations Interview should have been more focused on the solution rather than on the issue 01Define Solution Limitations Damien Marchenay Doctor of Hospitality and Tourism Management
- 31. 31 The future of the restaurant in general vs new players like Food panda etc. Owner responsibility in hotel management Impact of corona virus for the future of F&B Positive as need of safety? Assessing the importance of service standard in hotel industry. Is it obsolete? Further studies 01 02 03 04 05 Research on DNA of Hospitality industry and the quest of differentiation vs the hotel new players Damien Marchenay Doctor of Hospitality and Tourism Management
- 32. Thank you! Q/A 32Damien Marchenay Doctor of Hospitality and Tourism Management