It takes commitment to turn a comfortable place to crash into an inviting place to nosh.
Justin Alexander told a group of Holiday Inn owners and managers at a training session in June that his dream is that Holiday Inn F&B will become so consistent from property to property that the brand can feel confident enough to run a national ad campaign highlighting F&B as a differentiator in the market. At the Holiday Inn Downtown in Rochester, New York, Alexander who is director, brand experience, Holiday Inn Americas at InterContinental Hotels Group, was speaking at the last in a series of 11 conference-style C.A.S.H. (Consistency, Ambiance, Service, Holiday Inn) F&B summits, held across the U.S. and Canada. In the series, all hotel general managers and F&B directors received in-depth, in-person training focused on driving revenue, service, and consistency throughout morning and evening dayparts.
Alexander says that Holiday Inn’s research has shown that guests are willing to trade variety for quality and service and “real restaurant” presentation. That revelation led to the creation of a strong core of required familiar, favorite menu items, and optional choices for properties. Alexander says that 17% of value for guests comes from F&B.
At the 2015 IHG Owners Conference, the Holiday Inn brand introduced its new C.A.S.H. F&B service platform, which was created to ensure Holiday Inn hotels deliver “consistently great food, with great service, at a great value.” The impetus for the program is the recognition that F&B is the second highest driver of overall guest satisfaction, second only to the guest room.
By the end of 2016, all hotels in the U.S. and Canada, representing an expected 15,000 Holiday Inn hotel employees including all property leaders and line employees, will receive in-person or video training through IHG Frontline.
Big Inconsistencies, Small Capture
Until 2013, Holiday Inn was in an F&B funk. Guest satisfaction had stagnated since the brand’s last relaunch six years ago.
“If you looked at our capture rate at dinner, it wasn’t half of what breakfast was—and we weren’t even happy with the breakfast number,” says David Neves, corporate director of F&B for the Holiday Inn brand family at IHG. “Breakfast was in the 47% range, versus Holiday Inn Express in the high 70s or low 80s. Dinner capture was in the mid-20s. Seventy-five percent of guests were eating dinner somewhere else. I wouldn’t even call that research; that was just a reality check, looking at our internal measure, which we called Heartbeat at the time. When we got guest surveys back, it was very clear there was a huge level of dissatisfaction.”
This meant they weren’t providing owners new ideas to improve the experience, says Alexander. Limited service has grown to such a big segment, he observes, that guests are getting used to the idea of a free breakfast and are willing to trade down from full-service variety for more consistency. Holiday Inn watched as competitors Hilton Garden Inn and Courtyard were reinvesting in new concepts for their guests.
“With 770-plus hotels, there’s enormous diversity of F&B offerings across the system,” notes Eric Lent, IHG’s VP for Holiday Inn and Crowne Plaza Brands, “with everything from our branded concepts to owner-created solutions to third-party leased operations. That created a need to deliver simple, effective solutions to meet the diversity of needs.”
Allen Fusco, a Holiday Inn hotel owner and incoming chair of the IHG Owners Association, has been around, you might say. A second-generation owner (his father shook hands with Kemmons Wilson for his first franchise agreement in the late 1960s), Fusco began with the brand in 1972. He started with the owners’ association many years ago and has served on task forces and committees across every aspect of operation.
Previously, the larger the city, generally the better F&B a guest would find at a Holiday Inn, Fusco says. “In rural areas, we needed more consistency, so someone could adopt this program,” he says. “You always have to think of the little guy, because our weakest link is what we’re judged on.”
Holiday Inn has learned a few F&B lessons for its segment from the more limited-service realm, which includes Holiday Inn Express, Alexander says. Though Holiday Inn does not want to be confused with limited-service, they now focus on delivering smaller menus done with more quality and consistency, with training to execute on that from property to property. Core menus, customizable by owners, focus on the two most important dayparts: breakfast and dinner.
Now, dinner at Holiday Inn properties is becoming a real opportunity to garner guest loyalty, with quality and consistency.
First, consider the different targets of Holiday Inn and Holiday Inn Express. Holiday Inn Express goes for the “smart traveler,” who is all about self-sufficiency; the importance of the trip is the destination, and they just want a place to sleep, shower, and get breakfast, Alexander says. Holiday Inn aims for the contemporary traveler, who is open to breaking up the stay with “memories,” such as a good dinner. The smart traveler wants “beer and wine only, self-served” (grab ‘n’ go), Alexander says. The contemporary wants beer, wine, and cocktails, served in a bar or restaurant.
“We believe dinner and the bar is the daypart where we can do something memorable,” he says. “Maybe it’s a great menu item that comes out quicker than expected, or if it’s a bartender who is well trained, for interaction you didn’t expect. We have the ability to use our full-service amenities, as opposed to Holiday Inn Express.”
Holiday Inn’s target guest is 50/50 business/leisure, ranging from 30 to 50 years old. Sixty-eight percent have kids 18 and younger, and generally are blue collar but with income a little higher than national average, Alexander says. There is a tension between what business travelers want versus leisure, he says, and Monday through Friday offerings may be different than weekends.
Research and Goals
Deep research better revealed the role of F&B in all of this.
“We did a global conjoint study, which is a multi-variant statistical analysis, to understand what drives certain things,” Lent says. “We did one on drivers of satisfaction for Holiday Inn hotels specifically. We found that the number two driver of guest satisfaction was F&B. Then you take the fact that the longest service moment a guest has is food and beverage. Then you take the fact that Holiday Inn is a full-service, midscale hotel. So you have to be able to differentiate on F&B, versus select- or focused-service.”
Analytics looked at two groups: People who are familiar with and have stayed at Holiday Inn, and the general population. “We have to deliver on who our true consumer is, but in a way that has appeal broadly,” Lent says. “The sweet spot we sit in is that we cater to the mass market. It’s an easier target to design against, as opposed to economy or upper luxury.”
IHG studied guest survey feedback with external research from a firm from London, which created a formula. “It was clear that if we could capture people at dinner, the likelihood of them using breakfast more often was higher, and the likelihood over their average stay of 1.69 nights, we could get them for a cocktail and dinner purchase, and that would be a win across the experience,” Neves says. “That kind of research generated the entire movement.”
IHG simplified the menu and maximized cross-utilization of ingredients. It helps not just from a service standpoint but in the guest’s view.
“Before, we had dinner menus that were just huge, crazy menus,” says Neves. “We sometimes had 30 to 50 items. If you did the research, only 12 items sold. But [owners] convinced themselves that the guests expected to see a huge number of offerings. We were able to dial back our ticket times and service experience times and get a huge increase in profitability.”
“If you look at decision theory, the more items you put in front of a guest, the harder the decision comes,” Lent says. “But if you can get a set of items that have the broadest appeal, you maximize your overall purchase intent, which maximizes your volume.”
Ironically, Lent observes, “Simple is hard. In big organizations, regardless of industry, there’s often a bias toward complexity. Organizations that focus on simplicity increase the chances of success. We looked at what changes we could make to increase consistency, drive ambiance, and drive the right service essentials, in a way consistent with the brand, that would allow us to differentiate not just in the markets but as a brand overall.”
Changes were not without pushback from old-school operators who believed in being everything to everyone.
“Getting them focused on six to eight entrée items as opposed to 24; four appetizers instead of 10, four salads instead of 10, and two desserts instead of six was a big win,” Neves says. Feedback initially from GMs, he says, was that the proposed new discipline was good but dialed down too much. For example, new menus initially added a salmon BLT that sold like crazy but not in Kansas City or a pork chop that sold big in the Midwest but didn’t in Miami.
The new program is “a huge paradigm shift” for F&B directors and GMs who have been in the business a long time and have fixed ideas, says Neves.
“Any time you implement an element of ‘control,’ you’re going to get their dander up. We get pushback from guys who have been doing it a long time. One of the trickiest parts is to guide them through the process and give them some say-so and feedback mechanisms, so we can develop buy-in—as opposed to it being some silly program ‘those corporate dummies’ shoved down their throat.”
Neves says it’s beneficial to be open to feedback, to know that corporate doesn’t have a monopoly on all the good ideas. For the 2017 menus, Holiday Inn has formulated a subcommittee of GMs for feedback on what should be changed, with some constraints, such as not going back to big menus, things that don’t sell, and pricing themselves out of the market.
Now, Holiday Inn menus feature a core of commonality, and the owners can design around that with items of local appeal. “They work with our food and beverage specialists internally on recipe development, cost analysis, and finalization,” Lent explains.
The brand added a Create Your Own tab in the dropdown menu portal online with 34 recipes added to the recipe bank so owners could regionalize. It’s limited to two of those for the property.
With high turnover of late in the F&B world, how could Holiday Inn build an operational model and culture that would be sustainable within market conditions but also addresses that consumer expectations are increasing?
“If you look at not just hotels but adjacent categories,” says Lent, “such as QSR and the overall restaurant segment, you see that innovations are being brought forward, so the definition of what ‘good’ looks like increases. We saw that as an opportunity to raise the bar to strong, consistent performance across the system that we could then build restaurant concepts on top of. That became the genesis of C.A.S.H.”
Lent says adults learn best experientially. “If you lecture someone or they read it, they get a certain level of internalization,” he says. “If they experience it, they get a much deeper level.”
Every new hire in management has to go through C.A.S.H. training during first 90 days. Frontline staff has to go through IHG training videos in the first 40 days. When the Holiday Inn quality team visits a property, they check to make sure everyone is up to date.
“We built the menu to have structure and flexibility,” Alexander says. “You customize it around a core. For breakfast, there are eight core items. Then you can add two items with local flair, such as something your chef makes, or you can choose from our options. Same with dinner; there’s a core with options you can add.”
While the breakfast program is required everywhere, in deference to properties who already were doing very good dinner business, with a threshold level of satisfaction, they are allowed to opt out of doing a C.A.S.H. dinner and bar program. Eighty-five hotels received waivers allowing them to opt out of C.A.S.H. for dinner and the bar, based on high performance. But all hotels— even those waived for dinner and bar— must go through C.A.S.H. training for the Start Fresh breakfast menu, which all hotels are required to serve.
On the vendor side, Holiday Inn had partners they thought could help that didn’t work out, because of distribution (such as Fat Tire nationwide), so they created options for local and craft beer—allowing owners to use relationships with local breweries or meat purveyors. “That was a good midstream change for us,” Neves says.
Service previously was the biggest reason guests would leave a property for other dining options, Neves says.
“Throughout the tests and even in the early stages of implementation this year, it’s a real challenge,” he says. “In the industry as a whole, turnover is a real challenge from a service perspective. Having consistency in service is a challenge. If you do a deeper dive into why, there was no consistent training mechanism to ensure that new employees were getting all the tools they needed to pull off what we were asking of them. On the surface it was about service, but it was really about training. We knew we needed to factor into our tests a training experience for employees.”
In the first 40-hotel test, IHG didn’t include a training portal for FOH service. “It was only for BOH, because the guests felt the food quality was inconsistent,” Neves explains. “The guests didn’t know what to count on. We spent a bunch of money creating training for the BOH, but our clear miss was on service. So, when that test was morphed into the next 27 hotels, we incorporated training for FOH, and it was a huge improvement in service overall.”
Throughout the testing, they had monthly calls with GMs and F&B directors for feedback on the program as a whole, but they also conducted guest intercepts upon checkout. They gathered data and tweaked things along the way. Guests consistently said à la carte breakfast experience took too long. “They don’t have 30 minutes to wait for bacon and eggs on their checkout morning,” Neves says. IHG simplified the menu so the cooks could focus on 10 items (up to 14) to purchase for and prep for. Ticket times went from 15 minutes to 7 minutes, says Neves.
The brand is looking beyond the family traveler as it moves forward.
“We find that in the business sector, more and more, they are looking for their people to stay in full service, because they’re not jeopardized by someone driving to have even one cocktail,” says Fusco. “If they’re in an accident, it could jeopardize their job. We want to give them a sense that if they stay in a Holiday Inn and know our consistency, they won’t even question going into our bar.”
The new menus and C.A.S.H. training are key building blocks in an evolving process. “We’re full-service, so our next step is banquets and meetings, taking that to another level—to encompass every aspect of the building,” Fusco says.
IHG will continue to actively monitor trends and act accordingly, Fusco reports.
“A lot of times people put a program together and put it on the shelf and they’re done,” he says. “The way competition is today, these three- or five-year plans don’t really work anymore. Every year, you need to be reviewing what you have. Is it the right thing, and if not, what changes do you need to make? The more we institute this in hotels, the more feedback we get to tweak it going forward.”
The training summits and online portal have changed the public’s perception of Holiday Inn’s F&B, says says Eric Lent, IHG’s VP for Holiday Inn and Crowne Plaza Brands.
“It worked,” he says. “We were very pleased with the level of sentiment coming out of the summits. The lesson learned is continual, and the training was the beginning, not the end. It was the first step. For this to stick, in an industry with fairly high restaurant turnover, we need to continually reinforce, remind, and train to the degree that we will deem this program successful when it’s not IHG conducting the training for new employees, but the hotel staff at the property level has internalized it to the point that they can train on their own, and it’s part of the cultural DNA of that property operation.”
Ben Turner is the hotel manager at the Holiday Inn San Antonio-Riverwalk. After completing a renovation in March 2013, the property piloted the new breakfast at the time. “It was a smaller menu from what the typical Holiday Inn has, and it helped us create an identity,” Turner says. “The menu card was a lot smaller, with 12 to 15 items, as opposed to the large, standard Holiday Inn menus. It gave us an opportunity to focus on a few items guests really love and get great at it. It was easier to train servers.”
They then decided to participate in the Evening Acceleration Toolkit (E.A.T.) program, the beginning of the C.A.S.H. program, working directly with the corporate F&B team to come up with menu items. E.A.T. began in 2014 as a pilot and was then offered to Holiday Inn hotels as an opt-in program. It was developed based on learnings from the original opt-in dinner menu program (menu only) that was available from 2010 to 2013 and learnings from the Sunset test, an early version of E.A.T., and offered hotels a full bar and dinner program that included menus, collateral, recipes, and training.
Hotels that did enroll in the program performed very well, and as such, the brand moved to make the program a brand standard and relaunched in late 2015 as C.A.S.H. “We tested the menu for about a year and found the items that really worked well here,” says Turner. “At the restaurant here, we didn’t do a lot of covers (before) for lunch and dinner, but the new menu gave more traditional options, as opposed to all the local items we had on the menu before. In San Antonio, it’s really competitive, so on the Riverwalk, there’s Mexican dishes everywhere.”
“The C.A.S.H program helps give us an identity,” he says. “A lot of guests confuse us with Holiday Inn Express, which has free breakfast, so there’s this perception that Holiday Inn F&B is free. C.A.S.H. helps create an identity for Holiday Inn, so every guest knows when they walk into a Holiday Inn, they’re going to have a quality experience with good food and service.” His breakfast revenue is “gangbusters,” and the change has done “miracles,” he says. For dinner and lunch, it’s helped capture some guests who just don’t want to go out for Mexican food.
The training portal has been critical for consistency, Turner says. “That’s what’s helped this program. Breakfast covers have really increased. Lunch and dinner have more of an identity. We definitely increased lunch and dinner covers. It’s a basic menu, but we did include a couple of local sellers that were popular before this menu. We have the San Antonio Street Tacos, one of our popular sellers we didn’t want to get away from.” —TW