Hotels Serve Up Mini Food Courts
<FONT SIZE="+3"><B>Hotels Serve Up Mini Food Courts</B>
By Linda Humphrey
As travelers continue to shun midpriced hotel restaurants in favor of fast food eateries, several chains are forging mini food courts, hooking up with branded companies such as Pizzeria Uno and Mrs. Fields cookies.
Chains already adopting this food and beverage outsourcing strategy include Clarion Hotels, Doubletree Club Hotels, Holiday Inn, Radisson and Quality Inns, with Howard Johnson and Travelodge slated to follow soon.
But Ramada, which will unveil a deli approach by year-end, questions whether the traffic in hotels can really support these shopping mall food bazaars.
Hotels are catching up with the "branding explosion" first sparked by McDonald's, said Karen Blair, brand vice president for Choice Hotels' Choice Picks Food Court. "Everything is branded now-in the grocery store you'll find Wolfgang Puck pizza," she said. Hotel food lagged behind and lost its credibility. At the same time, guests are lashing out against hotel food prices, Blair said.
Traditional hotel restaurants, in fact, have long been notorious money-losers.
"The reason hotels charge $25 for a waffle is to cover their overhead cost," said Gerard Smith, senior partner of the T&E Group, Newport Beach, Calif. "They have no lunch crowd and no huge dinner crowd. Unless there's a convention going, they've got a lot of restaurant staff sitting around. And someone has to pay for the kitchen staying open."
Clearly, travelers have been unwilling to pay these costs, and hotel restaurants have suffered accordingly.
"The hotel coffee shop is a place you go to when it's raining really hard," said Choice Hotels president Don Landry. The hotel company polled guests nationwide, finding that 46 percent would rather hike down the street to a brand-name eatery than dine in the hotel. "One of our Quality Inns has an excellent Italian restaurant, one of the best in town," said Blair. "But people walk two blocks down the street to a mall to eat."
"Guests are rejecting brands that they don't trust or recognize," concurred Ned Barker, Holiday Inn's director of franchise food and beverage services. "Unless it's a brand I know, I'm eating at a Holiday Inn or a Quality Inn, and those aren't the places I go to for dinner. When's the last time you said, 'Hey, let's go to the Holiday Inn for dinner!' "
Orlando's Holiday Inn at International Drive serves up "an outstanding gourmet pizza, prepared with fresh ingredients in a wood-burning oven," said Barker. Yet once Little Caesars pizza joined the menu, it outsold the house pizza two to one. "It goes back to the power of brands."
So far, seven Clarion Hotels and Quality Inns have swapped their restaurants for the Choice Picks Food Courts, which feature any mix of 12 brands. Plans call for another 17 hotels to add the courts within two months, 50 by year-end, and 400 by the turn of the century.
Choice currently has teamed up with Coca-Cola, Casa Ortega Cafe, Healthy Choice Deli Meats, I Can't Believe It's Yogurt, Nathan's Famous, Nestle Toll House Cookie Cafe, Pizzeria Uno, Saks Gourmet Coffees, Super Pretzel and Stuff'n Turkey, and is scouting for a barbecue brand. The company also has set up its own soup-and-salad restaurant, called Garden Place, which features brand-name soups and salad dressings, and a "grab and go" wine and beer station called the Pub.
At each hotel, the Food Courts have outdone their restaurant predecessors by 20 to 30 percent, "whether it was a coffee shop or, in the case of Baltimore, a fine dining restaurant," Blair said.
Currently featured in Hendersonville, N.C.; Hollywood Beach, Fla.; Jekel Island, Ga.; Mobile, Ala.; Baltimore; and the Choice western headquarters in Phoenix, the courts are slated to debut this year in Clearwater Beach, Fla.; Lumberton, N.C.; Roanoke, Va.; and the Los Angeles Airport.
Choice also is trying out the Court in an office park-without the hotel.
Holiday Inn has launched three Convenience Courts-a blend of convenience store, hotel gift shop and food court-and plans to debut another half-dozen next month. Most won't supplant restaurants, Barker said, but the chain plans to test that concept in some hotels.
Holiday Inn hotels choose their mix from Blimpie, Burlap's coffee, Coca-Cola, Freshëns frozen yogurt, Little Caesars Pizza, Mrs. Fields, Sara Lee Bakery and Taco John's. The chain is vying for two more brands as well, including a hot dog company.
Holiday Inn's Orlando property traded in one of its two restaurants for the court, which now pulls in double the revenues, said general manager Bob Schaedel.
Pairing the food court with one traditional restaurant seems to work, Barker said. Surprisingly, the courts "don't seem to be cannibalizing our restaurants," Barker said. "We thought that maybe two in every ten Convenience Court customers would be customers the restaurant would lose. But the two are not as directly related as we'd thought. When the traveler buys a bag of chips and a Coke, it wasn't between that and going to our restaurant. We've saved that guest from having to jump in their car."
A tryout to replace restaurants in some hotels will retain a full hot breakfast-"not a reheated breakfast sandwich"-and room service, Barker said. "We might serve pizza or tacos in a box instead of a plate, but we'll still serve it to your room."
The hotels also will still maintain a kitchen, cater events and serve cocktails in the lounge, Barker said. "We're not getting out of the restaurant business. We're saying maybe the guest would be just as happy in some markets with quick service, as long as they don't get cheated out of a full breakfast."
Holiday Inn also has opened Convenience Courts in Tampa and Lake Buena Vista, Fla., Barker said.
Doubletree premiered its first Club Hotel, which features Au Bon Pain, three weeks ago in Jacksonville, Fla., and has slated three more to open within three months.
In a two-month-old test run at the upscale Tysons Corner Doubletree, so many guests and neighborhood office workers have stormed the eatery that the hotel has had to expand its hours to keep up, said Paul Keeler, Doubletree's vice president of food and beverage. The Au Bon Pain kiosk draws a lunch crowd from the nearby office park and has even begun to cater outside luncheons.
San Antonio, Louisville and Philadelphia are slated to open Doubletree Club hotels within three months, and several upscale Doubletree hotels-particularly those near office parks-may add a kiosk as well, Keeler said.
Without the neighborhood foot traffic, however, some hoteliers doubt a hotel food court could work.
"A food-court concept in a hotel is actually comical," said Steven Belmonte, president and chief operating officer for Ramada Franchise Systems, which will unveil a New York-style deli concept at its December convention.
"The food courts get a box of tacos and they're heating it up," Belmonte said. "I do not want to give people reheated pizza in place of a restaurant."
Guests don't crave name brands as much as food that's "more simple, more sandwich-like," Belmonte said. "The consumer has no confidence in the food they'll get in a midpriced hotel."
Whether guests want branded food also depends on the item, added Scott Deaver, Ramada vice president of marketing. "Pizza must be branded, but not burgers or ice-cream sundaes."
Ramada Inns will have the option to swap their lunch-and-dinner restaurant for the deli, but must serve a traditional breakfast, Belmonte said. Ramada Plazas may add the deli but must keep a "white-tablecloth restaurant" as well.
Howard Johnson plans to join the food-court party as well, said president and chief chief operating officer Steven Phillips. "We're in the early stages of planning a hookup with a fast-food-type chain," he said.
Cost of labor is driving this trend as much as guest demand. While labor in Asia still is less costly than in the U.S. and Europe, "it is rising quite rapidly, certainly faster than the economies are growing," said John Norlander, president and chief executive of Carlson Hospitality Worldwide. "What that means to me is they have to find ways to hold their costs in check. The most expensive part of labor in a hotel is food and beverage, so you're going to see some shrinking of F&B operations. When that happens, then you tend to become more casual, more like Friday's. American casual is definitely taking over the world."
Radisson, a pioneer in teaming with the branded TGI Friday's chain (both owned by Carlson Hospitality), is now taking the concept beyond U.S. borders. Twenty American hotels partner with Friday's, including eight Radissons, six Holiday Inns, two Country Inns & Suites, one Hampton Inn and one Embassy Suites. Radisson has opened one Friday's in Berlin, six in Seoul and eight in Taipei.
In Mexico, Travelodge has just struck an agreement to pair 30 properties over the next three years with a branded food chain called Wings, said public relations manager Edward Deutsch.