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Marriott Needs to Revamp Its Dining Strategy — and Knows It

Deanna Ting
Marriott Needs to Revamp Its Dining Strategy — and Knows It

Marriott International executives know what people have thought about its dining options for the past few years or, well, decades. Namely, that the food and bar options were likely consistent and convenient, but that’s simply code for “boring” and “uninspired.”

They are so aware of this commonly held conception of the hotel restaurant — a concept not solely limited to Marriott itself but to nearly every major hotel chain — that for the past few years, they’ve worked hard to try to transform the very idea of what a good, no, exceptional hotel dining outlet should be.

“I do think the perception of the company and where we are, from an F&B [food and beverage] standpoint is five years in the past,” said Dave Grissen, Marriott International group president. “We want to catch up to everyone a bit to where we are and where we want to go.”

Just a few days prior, Grissen stood before a crowd of more than 100 investment analysts at Marriott’s biannual investor day presentation in New York City, talking specifically about the opportunity that the world’s largest hotel company now has when it comes to its more than 10,000 restaurants and bars spread out among more than 6,900 hotels.

Dining is a big business for hotels, and Marriott wants its investors to know that.

In 2018, the restaurants and bars managed by Marriott worldwide generated some $12.9 billion in dining. Of its global portfolio, 127 of those restaurants generated more than $5 million in revenue each. There are 29 Michelin stars across the portfolio.

Laura E. Paugh, Marriott’s senior vice president of investor relations, told Skift, anecdotally, that in her 39 years with Marriott, this was the first time in a long time that she could recall that an entire portion of the investor day presentation to the company’s dining business.

But beyond just the revenue numbers or the accolades, Grissen and his colleagues at Marriott — as well as the larger hotel industry at large — know that dining has already become one of the most important facets of travel, and that it has the power to sustain a hotel as a neighborhood fixture, too, and well, keep the lights on.

And the relationship between both restaurant and hotel is symbiotic — the financial backing of a hotel operation can give a much-needed financial boost for the restaurants and bars they house.

“The world has evolved significantly in the last five to 10 years,” Grissen noted. “Food and beverage is at the top of the list from an experiences standpoint, and I personally think food and beverage is what brings hotels to life — the best way to differentiate a great hotel is to have great restaurant and bar facilities. It’s a global positioning now.”

A large part of that has to do with foodie culture, as well as the fact that food has become a universal focal point for travel.

“We recognize that consumers, more than ever, are food fluent,” added Matthew Von Ertfelda, Marriott International senior vice president of food and beverage and global operations. “Food and beverage is at the heart of travel; people go to places increasingly because they are great food nations, and they go to hotels increasingly because they have great F&B.”

And when it comes to crafting those experiences, Von Ertfelda said, “It’s no longer about consistency in terms of the experience. It’s about originality and people learning something and expanding into something new. A lot of hotels now recognize that hotel rooms are static — it’s just the price of entry. People really want experiences that add to their character and integrity and often that’s often found through food and beverage.”

The Evolution of Hotel Dining

This isn’t at all a new concept. Bill Kimpton, the founder of Kimpton Hotels & Restaurants, masterfully incorporated this philosophy into his first hotels, which became havens for chef-driven restaurants that catered as much to locals as they did to guests, as far back as the early 1980s.

“Typically, hotel restaurants, from my understanding, are just amenities for the hotel,” Executive Chef Walter Pisano of Tulio at Kimpton’s Vintage Park Hotel told Skift as part of Skift’s Complete Oral History of Boutique Hotels. “What Bill [Kimpton] always wanted was a restaurant. … He wanted to eat in nice restaurants. He wanted to make sure that they were treated as separate entities. … He wanted to have these separate entrances and make it feel more personal.”

More recently, a number of major hotel companies have taken steps to build upon that legacy that Kimpton and other early boutique and lifestyle hotel pioneers such as Ian Schrager, Steve Rubell, and the Ace Hotel founders (Alex Calderwood, Wade Weigel, and Douglas Herrick) built in terms of inventive hotel dining and entertainment.

Each has its own approach: Luxury-oriented, Dubai-based Jumeirah Group brought in the former chef and former international director of the Michelin Guides, Michael Ellis, to serve as its first-ever chief culinary officer and to dispense Michelin-quality knowhow across the groups’ dining outlets.

New York-based Standard Hotels hired chef Angela Dimayuga as its creative director of food and beverage to update its cultural programming, in addition to its dining offerings. Since her appointment, the hotel company has installed an all-day bakery and opened an LGBTQ-friendly bar in New York’s East Village, and it has even enticed celebrity chef Rocco DiSpirito to come out of retirement to some unexpectedly laudatory reviews.

Paris-based Accor, a massive hotel conglomerate like Marriott, bought a 50 percent stake in SBE, the company behind such dining brands as Umami Burger, Cleo, and others, with grand plans to expand those brands worldwide in various hotels. Accor says food and beverage accounts for some $5.7 billion in revenue on an annual basis.

And now, Marriott is looking to evolve its dining options too.

Marriott’s Dining Strategy

This year, Grissen told investors and analysts, Marriott will focus on “revenue growth,” as well as “driving customer volume and top line performances.” To do that, the company is, well, trying to do what “independent-minded” restaurants and bars have always done: make food and drinks we want to eat, and offer unique spaces that make us want to be there.

It’s essentially making sure that the hotel restaurant or bar of the future isn’t the typical hotel restaurant or bar of the past few decades, but one that’s more like your favorite neighborhood spot, or the pinnacle of destination dining. Just as hotel chains themselves have tried to be more like the boutiques and independents, they hope to do the same when it comes to their restaurants, too.

“When you see what the independents are doing, they’re so creative, agile, and innovative,” Von Ertfelda said. “They can move quickly with new thinking and that’s a benefit to the rest of the hotel and restaurant industry because they really raise the bar.”

The new Edition Times Square features multiple dining outlets from Michelin-starred chef John Fraser, including the Terrace Restaurant, shown here. Source: Marriott International Marriott International

Focusing on Luxury and Upscale

It’s easier for Marriott to take that approach when it comes to its luxury hotels, of which there are more than 400, with another 200 hotels on the way. In fact, Marriott’s luxury hotel portfolio, whose brands include The Ritz-Carlton, W, and St. Regis, dwarfs the competition from other hotel chains: It has 586 signed and pipeline deals for luxury hotels, while its closest competitor, Accor, has 342, followed by InterContinental Hotels Group at 271. Luxury hotels make up 9 percent of Marriott’s global portfolio, and they generate 18 percent of the company’s gross fee revenues.

It’s in the luxury space where Marriott has the freedom to work with Michelin-starred chefs and restaurateurs like John Fraser, Akira Back, Stephen Starr, and Jason Atherton, but that’s something not widely known, said Grissen.

“We have some incredible restaurants, a lot of Michelin stars, and I don’t think the general public or investment community has an understanding of the size of our presence.”

It’s also in the luxury space where Marriott, generally, has management control of the hotel restaurants. The company also enlists the help of its own internal luxury food and beverage team, as well as outside consultancy Pure Grey to come up with new concepts.

A number of Marriott’s luxury hotels were also part of the company’s $13.3 billion acquisition of Starwood Hotels & Resorts in 2016, and with the increased luxury presence, Grissen said the “great history of F&B in the Starwood platform” also followed.

“As a company, we went through this whole innovation journey … and we’ve learned to take more risks and deliver more bolder thinking that’s filtering into how we think about our F&B and how we concept and design things, and the tailwinds that came with the Starwood acquisition are punctuating these amazing opportunities we’re now seizing,” Von Ertfelda added.

Just below the luxury level, Marriott’s next tier of hotels occupying the upper upscale and lifestyle spaces with brands like Marriott, Westin, and Autograph Collection, encompass 1,800 full-service hotels and it’s in those spaces where Grissen and Von Ertfelda are focused on dining concepts that appeal to locals.

One of their proudest achievements, they said, was the transformation of three different dining outlets in the Charlotte City Center Marriott, which included a coffee shop that doubles as an event and co-working space; an immersive chef’s kitchen dining space; and a kitchen-like event space. Grissen said that revenue per available room (RevPAR) for that hotel grew 14 percent after the redesign, “meaning those restaurant outlets drove the impact and the vision for that hotel.”

And although much of Marriott’s dining strategy will focus on its luxury, upper upscale, and upscale hotels, that doesn’t mean the company is necessarily forgetting about its other hotels that are in the select service or midscale space, or that it knows it needs different strategies for those brands.

For example, Grissen said the company has more than a thousand Courtyard by Marriott hotels and the restaurant concept in each of those is a bistro, fittingly called, well, Courtyard Bistro, but it’s a concept that scales well and offers consistency for a hotel brand where 75 percent of properties are franchised and the rest are managed by Marriott.

After recently upgrading Courtyard Bistro’s food program and adding an evening wine tasting and cocktail experience, Marriott saw an increase in sales, including a 7.2 percent jump in breakfast sales, a 6.9 percent increase in dinner sales, and an 8 percent uptick in beverage sales.

Likewise, after Marriott revamped Aloft’s food and beverage offerings to be more grab-and-go friendly and bowl-centric, the company saw a 5 percent improvement in sales and a 28 percent improvement in profits per room.

And unlike Accor and SBE, Marriott would prefer not to go with heavily branded concepts for its restaurants.

“I don’t think, in today’s world, that rolling out a branded concept, for us, is the right way to go,” Grissen said. “We think localized concepts with the right design and feel for a market and hotel brand is what we’re after.”

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