Hotel Manager’s Guide to Room Service in 2021

Hotels

Hotel Manager’s Guide to Room Service in 2021

January 13, 2021

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For the hospitality industry, on-demand dining services have been a staple nearly as long as hotels have been in existence. But as hotels look to cut costs as the hospitality industry undergoes major changes, many hotel owners and managers are wondering if they even need to continue offering room service as a hotel amenity.

Does Your Hotel Need to Offer Room Service?

For well-known hotel chains, luxury hotels, and resorts it’s simple – yes.

Room service is meant to offer guests both convenience and luxury. Guests want the ability to select meals from a robust food menu, order whenever they want, and eat in the comfort of their room.

It’s a different case if you’re a motel or value hotel that the major selling point is the low-cost of booking a room. Guests at value motel and hotels are staying there for other reasons than convenience and luxury, and room service would be an unnecessary expense that would rarely be used.

For many hotels, room service is the best source of ancillary revenue and works to improve hotel ADR.

Benefits of Adding In-Room Dining to Your Hotel(s)

  • Convenience: Guests have the convenience of eating in their own private room, when they want it, without leaving the comfort of their room.
  • Luxury: Room service provides an add-on value of luxury, personalized service that guests might typically not experience.
  • Advertising: Hotels can use their room service amenity to increase bookings by listing service on website, asking guests to review their room service experience on review websites, and more.
  • Positioning: Room service typically is offering at high-end and resort-style hotels, and is uncommon at lower-end hotels and motels. Offering room service crafts a much luxurious brand image for your hotel, while also increasing the value of your property and rooms.

How Room Service Influences Your Hotel’s Online Reviews

75% of travels check online review sites such as Yelp and TripAdvisor before making a hotel-booking decision.

A hotel’s room service can be a big driver of positive reviews, but a poor in-room dining experience (or no room service experience at all) can drive negative reviews that hurt your hotel’s brand. See below for examples from real travelers’ reviews on TripAdvisor.

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negative-room-service-review

Is Traditional Room Service or an On-Site Hotel Restaurant Worth It?

While offering room service as an amenity to your hotel guests is still a worthwhile investment for hotels, the traditional room service method of preparing food in an on-site kitchen or hotel restaurant is not (for most.)It’s worth noting that these operational costs are worth it for resorts, convention hotels, and hotels with critically-acclaimed or popular on-site restaurants.According to a 2018 survey from iSeatz, “only 23.2% of hotel properties saw significant in-room dining revenue, demonstrating that providing this service has a negative effect on overall hotel performance and revenue.”
Hotels that saw significant
in-room dining revenue
last year.
0%

Combine that with the overall industries recession due to COVID-19, with year-over-year hotel occupancy down as high as 53% and revenue per available room down 33% (CNBC), and it becomes clear: traditional room service’s operating costs are too high for hotels in 2021, and may even be a hinder on your business’s overall bottom line.

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Problems with the Hotel Industry’s Traditional Room Service Model

  • The operating costs of an on-site kitchen or restaurant are too high.
  • Hotels need to invest in countless costs including room service staff, staff training, food licenses, meal carts, serving plates and silverware, and more.
  • Room service is too expensive for the majority of guests, with the cost of a room service bill averaging a guest $68 per order.
  • Food preparation and delivery takes too long.
  • Typically lower quality food.
  • Outdated technology, with many hotels still using phone calls to order room service.

How Much Does Room Service Cost Hotels to Operate?

The overall cost of building, preparing, and operating an on-site kitchen or restaurant to support your hotel’s room service is around $450,000 to $550,000.

These costs include:

  • Overall kitchen construction: $250,000 to $350,000
  • Kitchen equipment: $80,000
  • Food permits, licenses, and insurance: $12,000
  • Food inventory
  • Chefs, cooks, room service staff wages
  • Additional recurring expenses and operating costs

3 IRD Alternatives for Hotels without an On-Site Kitchen

While specific hotel brands and chains have standards when it comes to how they individually do room service in their hotels, there is no universal “best” way of offering room service in your hotel. The following are three alternative ways you can offer a room service experience in your hotel – each bringing its own set of benefits to the table.

1. Partner with Local Restaurants

Best for: Hotels without an on-site kitchen or restaurant that want to have a room service menu, hotels shutting down on-site kitchens or restaurants due to high operating costs, hotels looking for a marketing edge on nearby hotels, or Airbnb competition.

For many hotels, the costs of operating an on-site kitchen or hotel restaurant are not worth the benefits of offering room service to guests – with many hotels losing money from their on-site dining operations. However, many innovative hotels are finding ways around these costs by partnering with local restaurants to power their room service menu.

Hotel managers and owners can work with nearby restaurants to craft a new room service menu – making it a win-win-win for everyone involved. The hotel can offer a unique room service experience while cutting down on operating costs, food service costs, and staff training. Restaurants create a new channel to drive orders and create additional revenue and brand awareness. Guests still have the luxury of ordering from a delicious room service menu, while also enjoying a local favorite from the destination they’re visiting.

2ndKitchen fully automates this type of room service experience for hotels. 2ndKitchen partners your hotel with a nearby restaurant works with you to craft a white-labeled menu, sends you physical room service menus, allows guests to place contactless orders from a mobile room service ordering app, manages delivery to your guests, and more.

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Above: Example of 2ndKitchen’s room service mobile ordering system. 

Advantages:

  • Cuts operating costs of on-site kitchen or hotel restaurant
  • Automates room service for hotels
  • Increases productivity of hotel staff by not needing to manage room service
  • Improves online bookings by advertising your room service amenity
  • Easier ordering for guests
  • Cheaper for guests

Disadvantages:

  • Loss of additional revenue stream of an on-site kitchen or hotel restaurant
  • Can be slightly less luxury, with this room service feeling more delivery and less concierge

2. Grab-and-Go Options

Best for: Business-travel hotels, convention hotel, hotels that focus less on luxury and more on local experiences.

Many hotels – including chains such as the Hampton Inns – have adopted grab-and-go areas into their hotel’s designs. These grab-and-go areas can be as simple as a rolling cart or a small room similar to that of an airport convenience store. These carts and areas can be located in hotel lobbies, high-trafficked common areas, or on designated guest floors.

Grab-and-go options focus on food, beverage, and toiletries that are handheld and easy to travel with. Examples include apples and bananas, granola bars, bottled water, orange juice, hand sanitizer, kleenexes, OTC medications, and more.

Advantages:

  • No need for an on-site kitchen or restaurant, outsourced room service software, or additional staff.
  • Self-serving for guests.
  • Convenient for guests on the go.
  • Blends into hotel design.
  • Can add items needed specifically in your area (ie. sunblock for hotels on the beach, insect repellent for hotels near outdoor activities, bandanas for hotels near a music festival.)

Disadvantages

  • Loss of additional revenue stream of an on-site kitchen or hotel restaurant.
  • No full meals or direct to guest room service available.
  • Guests can be messy and make the space disorganized quickly.
  • Need for constant restocking and reordering inventory.

3. Smart Vending Machines

Best for: High-tech hotels, hotels targeting younger demographics, business-travel hotels

Smart vending machines are high-tech vending machines that are stocked with fresh fruit, pre-packed items, toiletries, and anything else that can fit inside the machine. In a sense, these smart vending machines are the fully-automated version of grab-and-go kiosks. Examples of these include Byte Foods, 365 Retail Markets, and the recently out-of-business Stockwell AI.

byte-foods-smart-vending-machine

What’s great about these vending machines is that they learn over time, meaning that if an item is rarely selected, these smart machines will see what items in a similar business (in this case other hotels) are most popular – as well as learn what items are most popular with your specific guests. This allows you to have the best, most in-demand food items in stock for your guests at all times.

These smart vending machines may not be an exact alternative to room service, but they meet the basic needs of giving your guests food options without leaving the hotel property, at any time.

Advantages:

  • Allows guests to order from their smartphones.
  • Stocks the food most popular at your hotel and changes unpopular items.
  • No need for an on-site kitchen or restaurant, outsourced room service software, or additional staff.
  • Convenient for guests on the go.
  • Fully automated.

Disadvantages:

  • Vending machines are inherently no luxurious (though this is changing.)
  • No direct-to-room room service for guests.
  • No revenue from an on-site kitchen or restaurant.

4 Room Service & In-Room Dining Trends in 2021

Guest room service has been going through a major revolution since the Hilton New York Midtown in Manhattan stopped offering its traditional room service menu in 2013. Combine that with the impact COVID-19 has had on both the hospitality and dining industries and there are a handful of major trends to keep an eye on in regards to in-room dining at hotels in 2021.

1. Contactless Ordering & Delivery

With COVID-19, the contactless-revolution has impacted all areas of guest and customer-relations. For hotels managing room service, this means offering solutions for guests to order via QR-code menus and from their smartphone, as well as create a system for contactless delivery for residents.

Contactless Room Service Software for Hotels

Allow guests to order room service via QR-powered menus and a mobile online ordering system.

2. In-Room Tablets

In-room tables are found in nearly all upscale hotel rooms, and they provide a great medium to promote your room service menu. For hotels looking to increase room service orders, allowing guests to order via an in-room tablet is a must, as these tablets can result in 10,000+ guest room service menu interactions per month and an additional revenue stream of $25,000 a year based on a 200-unit resort.

3. Guest Vouchers

For hotels looking to improve their conversion on online booking and reservation engines, guest vouchers are a great strategy many hotel managers are experimenting with in 2021.

Guest vouchers allow hotels to offer guests free meal credits from their onsite or outsourced room service menu – letting guests enjoy complimentary meals while staying at your hotel or resort. This added amenity provides some additional convenience and luxury for hotels, giving you the extra bump you need to beat out the competition, fill your rooms, and keep guests happy.

Guest Vouchers and Sponsored Meals

Increase online bookings and improve online reviews by giving guests free room service vouchers for their stay.

4. Room Service Software & Ordering Apps

As digital transformation – or the process of re-imaging core business processes with technology, automation, and software – continues to disrupt the hospitality industry, so is true for its disruption of the room service experience.

Room service software can range from a simple online ordering system, allowing guests to browse an online menu and order directly from their smartphones, which sends orders to the kitchen – to completely automated room service software such as 2ndKitchen’s room service software that manages everything from payments, ordering, delivery, and food management.

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Elevate your hotel with 5-star food service.

Curated
Room Service

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Breakfast

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“It is super fast. Our guests will have a nice and tasty experience ordering room service with 2ndKitchen.”
City Manager, Stay Alfred Chicago
Hotel Room Service.
Reimagined.
Mobile ordering for contactless room service, daily breakfast programs, and more. 100% free to use + earn ancillary income on each order.
“My guests are raving about our new food menu! It’s so easy to install and we can’t imagine our hotel without it”
Maria, Hotel Manager
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