Waking Up To Great Value

Waking Up To
Great Value

October 26, 2011



The breakfast table offers an equal opportunity to make or break guest
experience, especially in the midscale sector, where free breakfast garners
higher and higher expectations as the category evolves. Here’s how hotel brands
are approaching their analysis of this imperative amenity.

Over the past few years, hoteliers have learned quite quickly that the days
of “build it and they will come” are well over, and “location, location,
location” is not necessarily the number one factor influencing profitability. On
the guest side of the equation, the mantra is “value, value, value.” By catering
to the guest’s sensible nature, hotels can truly gain the competitive edge.

Hardly anywhere is there a higher perceived value than at the breakfast
table. In Country Inns & Suites’ recent “Today’s Business Traveler” survey,
82 percent of respondents said they base their hotel selection on free amenities
such as high-speed Internet and breakfast. Breaking it down further, 90 percent
said high-speed Internet is the number one most important amenity (not
surprising), followed next by hot breakfast at 70 percent. That’s not just any
breakfast, it’s a hot breakfast. Especially in the highly competitive midscale
sector, where breakfast is included in the rate, perceived value is crucial.

Of course, business travelers aren’t the only guests looking for value when
they wake up in the morning.

“If I take my family to breakfast, I’m staring down a $35 to $40 check out of
my own pocket,” says Steve Mogck, executive vice president and chief operating
officer of Country Inns & Suites by Carlson. “So when you look at midscale
hotel pricing, which is $70 to $90 per night depending on the market, the guest
sees incredible value in that breakfast.”

The fierce competition to enhance the breakfast bar defines “amenity creep,”
and brands in the midscale sector have continued to add more and more for their
guests as part of their complimentary offering.

“Breakfast in midscale is always evolving, and we’re not unique in that,”
says Mark Southern, director of product innovation, F&B, Hilton Worldwide.
“We all started somewhere different than we are today, and the lifecycle of the
brands will be very different in 20 years as well.”

The trick to surviving this evolution is to not only to have a lot of food on
the table, but also to have the right food on the table. That involves staying
on top of consumer trends.

“From the macro perspective, I think individualization and customization is
here to stay. We all get to customize iPhones, websites, newsfeeds, and we have
to embrace a level of individualization at the hotel level as well,” says
Southern. “So when you look at breakfast over the course of a week, guests want
to be sure to have something unique every day.”

In other words, an attractive breakfast bar is not just about piling on
whatever is the cheapest and most efficient. It’s about perceived quality, and –
yes, this word again – value. Guests want options, and they want foods that fit
their lifestyle. Responding to this trend, both Country Inns & Suites and
Hilton’s Hampton brand recently added real oatmeal – not pre-packaged, and not
quick cooking oatmeal – to their repertoire.

“Health and wellness is important to our guests, and I don’t think anyone
will come in next year and say 2012 is the year of trans fats and corn syrup,”
says Southern. “On top of that, transparency in food is big, and we’re moving
toward cleaner of ingredient lists – in other words, when you look what’s in
your food, you’ll only see ingredients you understand. It is what it says.”

Selecting Service

Of course, an important part of a good hotel breakfast is how it’s served.
Midscale hotels again face a unique challenge because their guest base is so
diverse. From weekday business travelers to weekend leisure guests, from small
business meetings to large groups, fitting all this food as well as the people
to eat it in a small breakfast room is a challenge.

“We really do have to be all things to all people at times,” says Southern.

Again, it’s all about options. Southern adds as long as you make space,
guests will utilize it in ways they see fit, and in Hampton’s new Perfect Mix
lobby, there’s been an organic flow because people have a variety of seating
options and areas, but it remains one contiguous space.

Aside from ensuring the right staffing and attending to the guests – hotel
service 101 – utilizing back-of-house space is an important consideration as

“When we add these elements, it becomes extremely complex to achieve high
quality food preparation and delivery,” says Mogck. “We joke that our pantries
are so small you can’t change your mind in them.”

Waste is one of the other major considerations when it comes to advanced
offerings. To combat this challenge, Country Inns recently rolled out
non-disposable dining ware.

“We decided to be the first to use non-disposable utensils. Even with adding
a dishwasher, from a cost standpoint it’s very close to what we were doing
before,” says Mogck. “But now we’re saving thousands of pounds of garbage from
landfills. There is not an RFP out there that doesn’t ask about what you’re
doing to be green, and we wanted something real.”

Rate of Return

In midscale, competition continues to up the ante and build on more and more
amenities to differentiate outside the beige box. At the end of the day at the
property level, the goal is always to create a better guest experience while
simultaneously  raising rate to get a better ROI.

“When you look at ROI, [improvements to breakfast] are table stakes. A number
of brands have skimped, and I see it everywhere,” says Mogck. “What are you
saving, $1 a room? When guest perceives what you get at a restaurant, it makes a
huge difference, and it gives you the ability to raise rate and drive occupancy
long-term to establish yourself in the market.”

Mogck adds an example. Some hotels, for example, will try to lure guests by
offering $20 gas cards or other incentives of the like. While that’s effective
in its own right, a $20 gas card costs pretty close to $20 for the hotelier
(taking into account discounts in bulk, etc.). If you look at breakfast at $2 or
$3 per room, with the ability to raise rate accordingly because the guest
understands the value there, it makes sense.

“When you have an asset you can leverage, you have to maximize it,” says

The proof is in the pudding, pun intended. According to Country Inns’
Medallia ratings, the new “Be Our Guest” breakfast showed +.02 in the “overall
breakfast” category; +.03 in “presentation of breakfast items”; and +.10 in
“variety of breakfast items” over one year ago. With a .01 change being
statistically significant on a brand-wide level, the numbers speak for

Southern says that Hampton also saw a big lift in guest scores when the brand
added both waffles and, more recently, oatmeal. But at the end of the day, the
value the guest sees is not only from the products, but also how that product is
packaged with great service.

“Stuff is stuff, but the loyalty from our guest doesn’t come specifically
from oatmeal and waffles, it comes from great products wrapped in unbelievable
service,” Southern adds. “When you have those things together it becomes hard
for the competition to touch, and that’s why there’s so much potential at

Check out www.nebraskabb.com

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