Market to millennials: select service11 July 2018
In an age of lifestyle hotel brands and affordable luxury, select service is all the rage, but what does this mean for the future of the hotel restaurant? Neil Thompson meets Michael Butler of Hyatt International, Generator Hostels’ Gui Jaroschy, and Amir Nahai of AccorHotels to discuss what operators must do to meet guest expectations in terms of choice and convenience.
Not too long ago, almost by definition, select service meant very little food and beverage (F&B) services. But all that has been changing in recent years thanks to the rapid evolution of the select service space. With the social and lifestyle elements of a number of new brands being very much at the fore, the segment has begun to see a more diverse range of F&B offerings, many specifically targeting – or at least attuned to – millennial guests.
Millennials do F&B differently
Technology remains the biggest factor to highlight the differences between today's younger travellers and the older generations, especially regarding how they decide where to eat in the first place.
“Millennials definitely discover [food differently to older people], primarily on Instagram,” says Amir Nahai, CEO for F&B at AccorHotels. “It has definitely become one of the more dominant media for the discovery of food and beverage for millennials and others, but especially for this age group. They'll go [find food outlets through] Instagram, bloggers who write about F&B, and so on.”
“When millennials and Generation Z think about [eating out], they plan a holistic experience,” Nahai continues. “There’s the exploration that goes on beforehand, like going on Instagram and learning around the chef, learning about the mixologist, and so on. Then, once they arrive, they really pay more attention to the total experience in several ways.
"They want to take pictures and share it all: the dining space, the music, the art on the walls. All of that is hugely important and part and parcel of the [dining] experience for them.”
The new relationship between younger hotel customers and technology has forced select service brands to reconceptualise their food and beverage offerings. Nahai stresses that the same change in the discovery process has gradually crossed over to all age groups, as developments suchas smartphones and social media have matured from things used by teenagers into mainstream, everyday life.
However, he still believes that the shift has been youth-led and is accelerating, as Generation Z, the first generation to truly interact with social media since childhood, has arrived on the hotel scene.
But while contemporary communication platforms have fundamentally altered the way that hotel customers think about food, different companies highlight different aspects of this phenomenon.
Michael Butler, Hyatt's corporate director of food and beverage for Europe and India, singles out how access to more knowledge has changed how customers chose a restaurant, but also how technology is altering the way they approach and interact with, or within, a dining space. “You are also seeing many of those same technologies – some of which we are trialling right now – altering how a hotel F&B service operates," he says. "It is possible to go into a hotel restaurant, log on to a network and order everything on the menu from your phone, all without speaking to anybody, as a service choice.
“You can even pay the bill or call a waiter to a table [using your phone]. It’s not just about cash now – you've got Apple Pay and all these types of platforms even changing the way that [younger travellers] pay for food and drinks.
"Personally, I think young people today want customised service and personalised F&B experiences the way that they want it and how they want.”
How to stand out
“We live in a world where individuals now have their news, their advertising, their very lives created around their interests and desires," says Gui Jaroschy, Generator Hostels' director of food and beverage development. "We're dead in the water if we can't create F&B offerings that speak to a market of millions. To be relevant, [food] must speak to people.”
Nahai offers AccorHotels’ millennialfocused lifestyle brand Jo & Joe as an example of how the segment has reformed its F&B offerings in response to today’s ease of access to information on a city’s eating options. The lifestyle experience, and the sense of community that it offers guests, is of upmost importance to its business model. What this development means is that F&B has to be a bigger part of the brand’s offering than was originally the case.
“I can go in any major city to a restaurant where the food will be great, the ambience will be great, and theservice, when it comes, will be good. That changes the dynamics for everyone in the hotel industry, and it will continue to do so,” Nahai says.
Instead, the aim of Jo & Joe – and select service brands like it – is to provide a cheap yet quality food offering that is fresh, simple enough to keep costs down, locally sourced, and yet tasty enough to tempt holidaymakers to stay in some nights socialising with other patrons. Nahai says that to achieve this, his team designed a kitchen that allowed three cooking styles only: a grill, a wok and a pizza oven.
By simplifying their kitchens – and sacrificing some variety – however, the group were able to deliver a menu of fresh foods with ingredients from nearby businesses, from which the options often cost €10 or less. According to Nahai, this focus is paying off. The percentage of Jo & Joes’ revenues that comes from F&B is now much closer to what might be expected from an upscale hotel than it is from a traditional economy or select service hotel.
“We want this to be a great place for millennials to go where they can get a great place at a low price, but were they are also attracted by the whole [holiday] experience that they get, and the whole community that they get,” he says. “We have to stop thinking about some of these outdated ideas of 'When I go to a restaurant, I need to have universal variety', because if it is an economy hotel with maybe 30 things on its menu, that often that means a lot of it isn't going to taste good, and I guarantee you that most of it is going to be frozen or processed.”
Personalising the dining space
Speaking about the renewed importance of dining spaces to operators, Gui Jaroschy compares F&B outlets in a contemporary hostel or hotel to the many sides to someone's personality. In his view, guest rooms represent the private side, while its public spaces (bars and restaurants) exist to give a property a chance to express itself and allow guests to really understand and attach to the brand. However, in an age where customer complaints, or praise, can reach an audience of millions if they go viral, brands in the select service niche have adapted to this more transparent environment by seeking to provide travellers with increasingly memorable personalised F&B spaces.
While still far from the classic hotel restaurant, in most cases, this new interest in providing attractive shared places to eat comes in stark contrast to the traditional conception of select services as ‘bare-bones’ brands.
But with today’s technology, this new market approach lets customers mingle together at a low cost to operators while giving the clientele a chance at getting the shared social experiences they are there to search for. Shared spaces have also come into their own as a way of differentiating the various brands in the select service segment from one another. Even if every label adopted this measure, their individual aesthetics differ enough by appearance, budget and location to give each a unique appeal that can be quickly spread via the internet – highlighting the social aspect of the lifestyle choices that the select service segment is increasingly offering.
“[For many travellers today], it’s all about instant gratification,” Butler says. “Time is the new luxury. And the one space where you can quickly engage with another human being and have an interesting conversation is with F&B, in a restaurant or at a bar.
"Whether that comes through the employees, or whether it’s someone else who likes the same things as you and has come to this restaurant or bar, you are both travelling and can just get talking. It’s a space where you connect with people.”