BRANDED, UPSCALE HOTEL RE-OPENING F&B AFTER COVID-19
An upscale hotel required support in optimizing operating strategies for re-opening after a four-month closure during the COVID-19 pandemic. The client had a specific interest in identifying the ideal food and beverage service offerings for the short-term and mid-term periods in order to align with the projected volume rebound. The property’s owners engaged Carpedia Hospitality to guide the leadership team towards maximizing profitability within this new operating environment.
The COVID-19 pandemic has prompted new and significant requirements that mutually provide guests a safe and enjoyable experience. Food and beverage operations must adjust to new restrictions and expectations around indoor dining, social distancing and effective sanitation. Upon re-opening, projected guest mix is also anticipated to draw a different type of clientele, ranging from essential service workers to individual travelers and families looking for a reprieve from quarantine. Additionally, the long road to recovery that is expected for group business will also generate a shift in typical guest interests and behaviors observed prior to the pandemic.
These challenges were compounded by the prospect of re-opening the property with significantly lower business volume than prior to the temporary closure. With projected re-opening occupancy levels of 25%, the property’s operating plan required thoughtful consideration into how to provide guests with their desired services while maintaining a cost profile that would maximize profitability. This required an approach to the property’s food and beverage offerings that could easily scale from minimal volume levels up to increased business over time, all while considering new health and safety service obligations, and with discretion for guest services. Lastly, the property needed to conduct this initiative remotely given current market conditions and ceased operations.
During the 10-day engagement, Carpedia Hospitality conducted in-depth, virtual property tours and interviews with the local leadership to understand unique layouts and physical constraints, existing concepts and processes and past staffing practices. The team of consultants conducted further operations and financial analyses to understand pre-closure performance and customer behavior. A model was developed to generate revenue, cost, and profit margin scenarios that examined a wide range of service offering options and combinations.
Through collaboration with property leadership, the scenarios were selected for the immediate re-opening and as well as for the mid-term and long-term time horizons as occupancies increased.
The exercise allowed the property to develop a re-opening strategy that optimized financial performance and provided a service experience that was aligned to their competitive pricing positioning in the market. A detailed game plan was mapped out using volume thresholds that would trigger the next stage of concepts to be deployed. Based on the plans that were generated for re-opening prior to engaging with Carpedia Hospitality, the program resulted in an improvement to food and beverage profit margin by over 10%.