How to run a profitable F&B business by les roches international school of hotel management alumnus Mandarin Oriental Jakarta

Top 3 lessons on how to run a profitable F&B business

26 Apr 2016 | by Guest Author


How to run a profitable F&B business by les roches international school of hotel management alumnus Mandarin Oriental Jakarta

I was quite surprised when I entered the lecture hall last Monday morning: A former student of Les Roches came to give a guest lecture on Revenue Management in the Food & Beverage (F&B) industry and I knew right away that I would be intrigued to hear about his experiences given that I remembered him as a student.

Florian Steinmaier graduated in 2009, the same year that I first arrived at Les Roches. Within the last seven years he has successfully worked his way up to Hotel Manager for up-and-coming German hotel company Roomers Design Hotels, managing the opening of their new Munich property, scheduled for autumn 2016.

Over the course of his professional career he has worked with the Food & Beverage departments of many notable hotel companies including Kempinski and Mandarin Oriental. During his lecture, he explained in great length the crucial elements for strategically boosting restaurant revenue building on his industry experience. The following are the main points he underlined during his presentation.

1. Give F&B the consideration that it deserves

He stressed that Revenue Management is given little importance with regard to increasing turnover in F&B. Within hotels, performance is typically based on the success of Rooms Division. Using Roomers Hotels as an example, he emphasized the importance of the F&B department and the possible contributions that it can offer to the business. Understanding your clientele to get the pricing right is of utmost importance, but it is not just a matter of charging the right price to the right person at the right time.

2. Use historical data to forecast demand

Successful revenue management relies heavily on the ability to accurately forecast demand. Through the use of historical data, restaurants can apply principles and strategic objectives to their operations.

Many restaurants use discounting as a way to generate revenue, such as 2-for-1 deals, Happy Hour, or lunch menu prices. However, Mr. Steinmaier felt that these methods were more based on gut feeling rather than real strategy.

By taking available data and scrutinizing the information, you are creating a basis for your decision making.

3. Understand how much clients are willing to pay for your services

In terms of KPI’s, GOPPAR (Gross Operating Profit Per Available Room) includes the entire operation and can be a better determinant than RevPAR (Revenue Per Available Room). Beyond guest satisfaction, the objective of all aspects of business comes down to pure profit margins. When considering supply and demand, one of the prerequisites is looking how to increase reservations during low demand periods and how to increase revenues when demand exceeds supply.

A given instance was the famous Hallmark holiday – Valentine’s Day. Mr. Steinmaier explained that Valentine’s Day is a perfect example of how F&B managers can increase their average checks by understanding what the client wants and knowing what they are willing to pay for it. One mistake that many managers make is the assumption that guests are price sensitive. “Quite the contrary”, he remarked.

People are not price sensitive, but service sensitive. As it is important to create a strategy to increase cash flow, it is equally important to make sure staff is properly trained to meet the expectations of what your guests are paying for.

I left the lecture with a new perspective and approach to Revenue Management. I assumed it could only be applied to optimizing rooms revenue, but it turns out you can just as easily apply it to Food & Beverage! The lecture was very interesting and informative and I am very happy that I had the opportunity to learn first-hand from the experience of a Les Roches alumnus.

Jasmine Mari ITO
BBA student

Guest Author


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