F&B ROUNDTABLE: A mouthful from Hilton

Hotelier Middle East rounded up the brains behind Hilton’s regional F&B operation at BiCE, Hilton Dubai Jumeirah, to grill them on ambitious expansion plans, menu engineering and tackling fraud

How much of your Middle East hotels revenue comes from F&B?
Simon Lazarus: As an area it is 35%, but we have some hotels that make more in food and beverage revenue than rooms revenue; some substantially so. It depends just on the size of the hotels, the number of F&B outlets and the attractiveness.

How have you seen that ratio of revenue from rooms to F&B revenue change over the years?
SL: Revenue from food and beverage has grown year-on-year, not only because of openings, it has grown organically. But it’s really the conversion — profitability — we look at and we’ve just launched a new initiative called ‘menu pricing strategy’.

This involves doing a lot more deep-diving into menu engineering utilising Micros technology. Hotels and restaurants traditionally do a cost-plus pricing method, so if something costs AED 250 (US $68) you’ll mark it up to achieve a certain percent [margin], but we’re shifting entirely now to market-driven pricing where the customers tell us what they want.

You can analyse quite easily to see what the customer wants and we’ve changed the price now in line with the economic situation. We have started to offer more value-conscious meals to give people that option and allow them to choose their price point.

We are moving towards being able to change our menu prices due to demand. We are changing it more frequently, moving towards reacting, being able to put specials and promotions on very quickly, capitalising on seasonality and moving to more menu printing in-house for that flexibility.

How is technology helping you to effectively engineer menus?
SL: Micros gives you all the sales figures so you can extract everything, have complete visibility and look at prices. It’s good for the food and beverage manager and the chef, and it’s all about knowledge of what moves and what doesn’t.

We look at how trends develop monthly, if it’s not a seller it comes off the menu and if it sells we put a value on that.

This approach is now mandated throughout the hotels, we had a focus on it previously, but now there’s a big push.

Article continues on next page ...

According to Micros, fraudulent activities cost hospitality firms up to 4% of their revenues, are you using technology to tackle this?
SL: As hoteliers we all know theft happens, you build the systems to be fool proof, but any bank will tell you it happens there as well. It’s something we take very seriously.

Micros has an add-on software that detects unusual cheques being opened for too long or spikes and dips in revenue, and it alerts you. These alerts can be sent via SMS to the food and beverage manager and the general manager.

We’ve not introduced the add-on technology in this region yet, but we’ve tested it in Europe and it has proven itself so we will be bringing it in over the next year.

What innovations and technologies are you introducing into your outlets?
Andrew Joyce: As one example — we’re looking at software for a wine menu which will be on a tablet –— an iPad or a Kindle.

Diners can select their wines, they’ll have the normal menu screen telling them who you are, then you’ve got a selection of beverages, then you can get down to types and different categories.

Customers select by price, grape and region. Information and imagery can be updated immediately. It’s going to be a big culture change; the future is technology.

How will the introduction affect the role of the sommelier?
SL: It doesn’t take it away from the staff, it helps them in their jobs. Everything we do we have to get the customer feedback before we really commit to it, so we’re doing it in Doha now and I’m sure the younger generation love it.

Do you see all restaurant menus becoming digitalised in the future?
AJ: It just depends on the concept — there are some concepts for which digital menus will never work, others lend themselves well too it. At the moment we’re going to trial the wine and beverage menu and then we might start extending it.

Article continues on next page ...

Hilton Worldwide recently announced ambitious plans to open 500 restaurants in three years, how many of those can we expect to see in the region?
SL: The overall strategy depends entirely on the market and customer needs. We match concepts to the market, so strategy-wise it’s open. We currently have 52 hotels and 41 in the regional pipeline with an average of five outlets in each new hotel.

That comes to about 200 new outlets within the [upcoming] hotels in this region over the next three years. We also have several renovations and refurbishments underway in the region.

Jean-Michel Dixte: We have a range of new builds, master plans and renovations globally. Within the Middle East and Africa, the F&B solutions we offer range from bespoke concepts to prototype concepts, partnership deals and also trying to promote brands we want to get affiliated with, as well as celebrity chefs.

Are you using the period of reduced demand in Cairo as an opportunity to revamp outlets?
SL: In Egypt especially it is prime time to do it and our owners recognise we’re capitalising on it. In the Ramses Hilton, for example, we’re soon to enter into a massive refurbishment of everything from rooms through to restaurants.

The refurbishments are not across all our hotels in Egypt as there are still some properties doing quite well, but in Cairo it’s the perfect time.

Jarrett Beaulieu: Cairo’s a bit of a different animal for obvious reasons. There’s a challenge with price points — it’s more sensitive — and there’s less footfall in the hotels.

So for us to get our market share we’re doing some creative and innovative promotions, and ensuring that the quality is better than that of our competitors’. Tourism is certainly down, so we’re focusing more on trying to attract the local market.

How many refurbishments are currently underway in the region?
AJ:: There are around 20-25.

How often would you say a restaurant in this region should be refurbished to stay competitive?
JMD: It depends on the type of property and the city. The cycle can last up to seven years for a good solid concept -sometimes it is four years — but five to seven is the most common cycle.

How many of the 200 new restaurants in the region will be bespoke concepts and how many partnership deals?
JMD: We’re trying to give some bespoke solutions to each individual property according to the local market and the demand in each city. So for instance in Dubai we would like to implement 30% Hilton original concepts.

SL: We will be much more focused on bringing branded outlets to key markets like the UAE, and not ruling out cities like Cairo and so on. If the brand is right we will put it in.

Article continues on next page ...

Is there a move towards more branded restaurants within hotels?
SL: The industry in general is moving towards branded-, known concepts — it’s a trend in that direction. We’ve been doing that for many years. This restaurant is a prime example of a franchise partnership which works amazingly well.

JMD: The UAE in particular is very brand centric. Brands work here. There are other areas that wouldn’t support a franchise brand, but I think the UAE is a few steps ahead. It’s almost like Las Vegas in terms of the brand offerings with its combination of celebrity chefs and the known outlets.

Is Hilton looking to do more celebrity tie-ups with its restaurants?
SL: We had a fantastic partnership with Gordon Ramsay at Hilton Dubai Creek, but [when that ended] we formed a great partnership with the local chefs that were already at the restaurant (now called Table 9) — Nick Alvis and Scott Price.

Knud Bundgaard: The trend is going towards homegrown local celebrity chefs so when people go to Table 9 they know that the celebrity chef is actually cooking — that’s what’s changed in the last couple of years. People want to know that the food is being cooked by the chef who’s got their name on the restaurant.

How has the performance of Table 9 changed since the contract with Gordon Ramsay ended?
KB: From a food perspective I really do not believe you could get a better meal in Dubai. The food is very creative and it is not handed over as a recipe [from an absent celebrity chef], it’s cooked by the people with the skills.

SL: The volumes are definitely up year round — that’s no question. We took a bit of a different strategy where we lowered the price points slightly and offered a range of value to the guest and that’s proven to work — so far so good. We know it’s going to perform.

Which has the highest revenue potential in your opinion - franchise or homegrown concepts?
SL: They [the franchiser] will take a percentage of revenue, but you’ll find that known brands generate more volume [than a home-grown concept]. So in 80-90% of cases you see more revenues if the restaurants are franchised. The price points vary wildly, but in general terms you see a higher footfall providing you have the right partner.

Hilton has launched the website Hiltonrestaurantconcepts.com inviting outlet concepts ideas from restaurateurs — how does the website work?
JMD: You have two different platforms; one is specifically designed for the Hilton culinary teams — the hotel owners, franchisees as well as general managers of hotels. They then have the ability to communicate specific requirements such as menu frames, pricing points and design elements.

The website will try to match these requirements with a choice of concepts, including branded partnerships taking into account what we’ve got across the network already, looking at a range of great concepts that suit the needs of operators and owners and offer valuable experiences for local guests.
 
So are there new concepts that are being pitched to Hilton through the website by restaurateurs?
JMD: Yes, we’ve got Ruth’s Chris Steakhouse — that’s one of them. We are trying to develop partnerships as we go along. It’s a good way for franchisers to promote and affiliate themselves with the Hilton brands.
 
How many new brand partnerships do you expect will arise from the new concept website?
JMD: It’s difficult to say at the moment, but we’re obviously looking at a variety of complementary brands that suit the local market and each property.

What are emerging as the most popular restaurant concepts in the region?
JMD: Because of the economic challenges and the fact that people are trying to find reassurance in food concepts, the sharing concept is very popular. It brings a familiar feeling where everyone’s united around the table eating simple food.

People are much more knowledgeable about what they want and they’re price conscious. They’re demanding respect, but we’re trying to get away from a sense of formality.

In the UAE, particularly in Dubai, the market is getting very mature in terms of the restaurant experience — not just the food but the service, the design and all the different elements that create it.

People are looking for a restaurant experience where a manager can take full ownership, the staff can recognise you, make you feel welcome and offer you food that is identifiable, simple and good value for money.

Top 10 Hilton news bites
1. F&B makes up 35% of Hilton’s revenue from Middle East hotels
2. Hilton offers more value meals in line with customer demand
3. Menu printing brought in house to enable more flexibility
4. Chain shifts from marking-up to market-led pricing strategy
5. Hilton to introduce anti-fraud technology to region’s hotels within a year
6. Around 200 hotel restaurants coming online within three years
7. 70% of all new restaurants in Hilton’s Dubai hotels will be third-party outlets
8. Ramses Hilton undergoing extensive refurbishment of rooms and restaurants
9. Number of diners up at Hilton Dubai Creek outlet since Gordon Ramsay tie-up ended
10. Hotel franchised outlets have, generally speaking, a greater revenue potential than the homegrown concepts