Core Competancy

Davidson Hotel Company’s newly introduced menu program was designed with several goals in mind. The first was to highlight and standardize best-selling restaurant and banquet and catering items, with nods to regional tastes and individual brand preferences. The second was to shave food costs. Other goals focused on increasing revenue, tapping into chefs’ creativity, and building employee buy-in.

The Memphis, Tennessee-based company owns and/or manages 36 upscale hotels with nearly 10,000 rooms across the United States. Brands include Westin, Sheraton, Hyatt, Hilton, Hilton Garden Inn, Embassy Suites, Doubletree, Marriott, Renaissance, Crowne Plaza, and Holiday Inn.

Davidson’s systemwide F&B revenues have been “outstanding,” says Stephen Kilroy, the company’s VP of F&B, “and our profitability is doing very well.” Davidson’s profit margin on its F&B program last year was 37 percent, at about $135 million.

“A lot of this has to do with creating a consistent product and getting our arms around the inconsistency in our three-meal restaurants,” Kilroy says. “That includes food costs and engineering the menu. But it also relates to the guest’s experience.”

The program has already been installed in the three-meal restaurants at 24 properties and will be phased into the banquet and catering program during the fall.

STARTING POINT
Kilroy came to Davidson two years ago after five years as corporate director of F&B for Wyndham Hotels and Resorts. His mandate upon arrival was not only to create value but also to improve the customer experience when it came to catering and banquet service. “My goal was to create experiences for the guest,” he adds, “but also to increase profitability.”

The core menu program’s starting point took point-of-sale data, which can be figured year-to-date or by the month, Kilroy says. “We broke it down into a quarterly analysis, looking at everything sold in our three-meal restaurants. We then put it into a spreadsheet that showed what the items cost, the quantity sold, what we sold it for, and what the contribution was.

"What management discovered was surprising,” he says. “Many of the best selling items weren’t necessarily the fancy schmancy ones but the hamburger, the club sandwich, some good pasta dishes, salads, and a smattering of other sandwiches.

“We didn’t want to make it tricky,” says Kilroy. “We wanted to make sure we used fresh ground beef, that we used great rolls. We just wanted to create a great experience with those items we were selling most. Then, we could tweak the pricing up a bit (5 to 15 percent) because demand is stronger.”

UNITY WITH DIVERSITY
Building in both unity and diversity requires nimbleness. “The different brands are dynamic,” explains Kilroy. “It is not the easiest thing to homogenize all the different products, from location to type of hotel and things like that. But, because the company now concentrates more on the business travel and meetings market, we generally have a similar clientele throughout our hotels.”

Differences in regional taste preferences were accounted for, to a degree. “In several areas, we have three core items staffers can switch,” Kilroy says. "For instance, at Florida properties, mahi-mahi is used, while in Eugene, Oregon, we use salmon.”

The program will be somewhat altered at the company’s six independent and boutique-style hotels. “We’re letting them stay individual,” says Kilroy. “They’ll do a hybrid version of the approximately 30-item core menu.” The hybrid menus will contain many of the same components “but won’t be as strict as the core menu.”

OVERCOMING CHALLENGES
The greatest challenge to the process, Kilroy recalls, was sourcing product. For instance, he chose a La Brea Bakery petite baguette for French dip sandwiches because of its consistency. But obtaining it everywhere in the country became an issue. The choice of bread makes “a huge difference in that sandwich. That bread is ‘non-screw-up-able,’ something we found when we did our analysis, so this was definitely a hurdle.”

The issue was handled methodically, location by location. A couple of properties remain at which executives are still trying to source some products. As Kilroy points out, “In smaller properties where usage is lower, we can’t demand that the mainline distributors have to provide it through our contract. In a couple of instances, we’ve used other options.”

Another challenge was accommodating each of the various hotel brands Davidson operates, each of which has its own initiatives. “The big thing was making sure all the brands were happy,” he recounts. “In some instances, we do a side menu, a menu card, which works and keeps us compliant. They have to have certain menu items to stay within their brand’s standard, and we want to keep everybody happy.”

Yet another hurdle was getting staff buy-in. The key was getting their input. “Many company chefs contributed to the recipes once we knew what we were looking for in our core menu,” says Kilroy. “That’s how we found we had buy-in. We have some incredible talent in our culinary and front-of-the-house teams.”

HONING
Standardization eventually reached a high enough level, Kilroy says, that “we were noting exactly what the temperature of the turkey and beef should be that we roast off fresh.

“Specific directions on roasting a New York strip loin include setting the temperature to exactly 115°F, bench resting it, wrapping it, and using it the next day for French dips. And, instead of using a rack, we place mirepoix (onions, carrots, and celery) on the bottom of the pan with the piece of meat, whether it’s beef, chicken, or turkey. That way we derive a natural reduction in sauce for the French dip and the turkey.”

The process has improved food costs, which were standing at 30 to 34 percent for the outlets (restaurant and room service). “Now, we are trimming it” Kilroy says. “Looking at the menu matrix we use for these core menus, we pull it down to 27 to 30 percent.

Keeping food costs under control is important for everyone, Davidson’s portfolio included. “The three-meal contribution is not huge in a hotel unless there is a signature chef with a following,” Kilroy adds. “We pride ourselves on doing a hell of a banquet and catering business.”

Appetizers also receive attention in the new menu. “We found a lot of people enjoy our lounge atmosphere,” says Kilroy. Davidson now includes lounge restaurants in all of its new designs. A key part of that strategy is the smaller plates customers share featuring items such as Mini Chipotle Barbecue Chicken Tacos with Fresh Cilantro. “It’s real food, but it’s fun at the same time.”

Also included in the core menu are what Kilroy calls “snacky treats” such as hummus and grilled pizza. “We take our own doughs, roll them out, put them on the charbroiler, and build grilled pizzas. At the same time, we use that grilled pizza crust as the warm flatbread served with the hummus and vegetables.”

View the flatbread as a metaphor for the entire project—high quality, flexible, and a can’t-miss favorite among consumers. It accomplishes in miniature what the collective enterprise does overall.