When the New York Hilton Midtown announced a few months
ago that it would replace its room service with a self service option, it sent surprisingly
large ripples through the industry. While some industry observers asked whether
this was a watershed moment where a trend was set for an industry at large to
rid itself of a service that is declining in popularity, the majority viewed
this as an isolated test case.
I couldn’t agree more. The New
York Hilton wasn’t the first hotel to give room service the flick and it won’t
be the last. But it doesn’t mean room service as a whole is dead.
It’s an interesting and
worthwhile discussion to have though, and I believe there are a few points that
are worth considering in the room service debate.
Things outside the US are different…
…particularly in Asia. In the
US in 2012, room service revenue represented 1.2 percent of total hotel
revenue, down from 1.3 percent in 2011, according an industry survey done by
PKF Hospitality Research in Atlanta. This seems to echo Hilton midtown’s
reports that demand for the service has declined.
But then, if you look at the charges
a hotel in US typically slaps onto the room-service bill it’s no wonder: a
“delivery fee” or “room service” charge of $3
to US4, plus compulsory gratuity at 18% that is
automatically added whether you appreciate the way your server puts down the
tablet or not. Not to mention a room service tax of about 10%. Now even an
ardent room service user like me would think twice about ordering when I look
at these types of charges…
Fortunately for me, here in
Asia things are a lot different. With many countries not imposing value added
tax and a workforce that remains vastly cheaper than in the US (or in Europe
for that matter, at least in northern Europe), room service comes at a lesser
cost to a hotel than elsewhere, which is generally reflected in the cost of
ordering food.
Not all hotels are equal
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| The well-stocked ABC Store at the Hilton Hawaiian Village |
Of course, not all hotels are
equal in the room service debate. Aside
from long-stay type accommodation that provides reasonably equipped
kitchenettes, another type of property where room service may not be needed is
resorts, where the whole resort atmosphere is part of the holiday experience
and you rarely see a lone business traveler. Big resorts like the sprawling
Hilton Hawaiian Village for example have not only plenty of dining options
within the resort’s premises, but also a large convenience store that stocks
everything from booze to ready-made meals for take away. And you can book it to
your room, too. This resort has phased out room service last year (before the
Hilton Midtown) and I can’t say that I’ve missed it when I stayed there.
But what about business hotels
(and I would imagine the Hilton Midtown ranks in this category)? Judging from
my own experience as a frequent solo-business traveler, I would give a hotel
without room service a wide berth. The most important thing for me while
traveling for business is convenience and minimal disruption – after a long day
of meetings I don’t want to trawl around for food. I want to sit in my room,
catch up on emails and eat my room service meal at the same time. Aside from that, as a female solo-traveler
going for a lone meal is not always the most pleasant thing to do, particularly
in a country you don’t know well or feel unsafe in.
From cost centre to revenue generator
The one key argument that I
found largely absent from the debate is how to turn room service into a revenue
generator. One thing’s for sure: the room service experience of yore, where the
guest is bored by pages of unimaginatively written food options, won’t do it.
Capturing the imagination of
the hungry hotel guest at the point where he/she decides between ordering food
from the hotel or go next door and spend their dollars elsewhere requires
something more engaging.
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| A picture tells a thousand stories...still |
It’s the perfect type of
service to reside as an interactive in-room dining menu on the room TV or
tablet – it’s a cliché alright, but a photo still tells a thousand stories.
Putting
the dining menu on the in-room entertainment platform, featuring inviting
photos and descriptions, or even a video, combined with a direct POS link to
the kitchen and voila, it’s room service re-invented as a revenue generator,
rather than cost centre.
And let’s not forget that a
hotel will retain 100% of the revenues generated through in-room dining, as
opposed to just 25% of other payable services such as VOD movies.
Some of the hotels that have
rolled out our interactive in-room dining feature have reported overall hit
rates of 5% for room service (that is 5% of total occupancy), which may not
sound that much at first glance. But if you compare it with other on-demand
services such as movies, where hit rates hover just about 1%, the view changes
somewhat. (More data to come here in the near future!)
Lowering the barrier for guests to communicate
with the hotel
Another benefit of putting the
in-room dining menu on the entertainment platform is ease of use. Specifically
for those guests who do not speak the local language very well, putting this
service on the entertainment platform allows them to choose their preferred
language of interaction and seamlessly order their meals without having to pick
up the phone and speak with someone who they may not understand very well.
For in-room dining to be
successful and not a loss leader, it has to conform to the same criteria as every
other service offered in a hotel – it has to be easy to access and use and
offer value for money. If that cannot be achieved - for whatever reason - it should probably be scrapped, but not before carefully looking at all options.
