By Cory Dellinger, Senior Director of Avendra’s Consulting Services.
ACS collaborates with property leaders, analyzes the operating culture and competitive set, then suggests procedures to improve revenues and drive bottom-line profits
The Avendra Consulting Services (ACS) group is designed to identify opportunities to improve profit contribution. It works with hotels and restaurants to strengthen effective processes and assist in maximizing long term profitability and operating efficiencies. This is accomplished by determining and accessing the major profitability “drivers” that impact food and beverage operations and initiating practical recommendations for operational improvement.
The People Behind Profitability
The ACS team is deeply entrenched in hospitality, with team members having hands-on experience at the property level, either working in hotel kitchens or holding an operational management position. They go to unprecedented lengths to make discoveries necessary that improve customer operations and profitability. It’s these people and their ability to understand what operators want and need, that provide added value to owners and operators.
The Process to Achieve Profitability
Before conducting a profitability analysis, for example, ACS will obtain preliminary information three to four weeks prior to an extended property visit – P&L statements, AP spend reports, current outlet menus, copies of inventory tracking sheets and copies of group banquet and social catering event orders – to learn about the financial performance and offerings of the hotel. In addition, the ACS team conducts its own research to understand offerings, prices and guest feedback. They look at spend reports to understand hotel product mix and methods of distribution, and they gain a regional understanding of the competitive set and available suppliers. Armed with this data, ACS then visits the property and remains onsite for a several days to immerse themselves into the operational realities before providing the hotel with its report of actionable recommendations and a sustainable plan for long term profitability.
The Practice to Maintain Profitability
ACS collaborates with key property stakeholders to prioritize and implement actionable areas of improvement. Whether it’s the general manager, department leaders, finance teams or culinarians, ACS works side-by-side with key decision makers to analyze the operating culture and realign the hotel’s procedures with recommendations that will make it more profitable for owners and memorable for guests.
Here are 3 ways hoteliers and restaurateurs can leverage the expertise of Avendra’s Consulting Services to operate more profitably:
1. ACS is often hired to scrutinize outlet trends and look at the property’s sales structure to come up with a more profitable go-to-market strategy for banquets and catering. As a mystery shopper, for example, an ACS team member may request pricing for a wedding at the customer hotel and at several competitors in the area. This deep-dive comparison gives the hotel a better understanding of where its pricing model needs to be. The department may be waiving fees – such as banquet room rental or VIP suite upgrades – that others in the market are not, or it may be charging for services that others include free in their packages. ACS will then put together an action plan detailing how it can become more profitable.
2. ACS frequently conducts menu analysis during project engagements to determine if the food items are on trend and if they have continuity with diners. Is there local market competitiveness? Are food costs in line? Does the menu lack appeal? A competitive set analysis will also be conducted that compares competitors’ menus to see what prices the market is baring. If the restaurant’s pricing is at the lower end of the market, ACS will either work with the food and beverage manager to discuss menu sell price increases or work with the chef and its suppliers to find product alternatives where profit margins can be optimized. Over the course of three months after the project findings deliverable, the ACS team typically administers a follow-up process with key stakeholders to measure, quantify and record project results.
3. ACS is routinely contacted by convention hotels to look for areas where it can cut costs and drive profitability of a banquet department. Looking at the carving stations, for example, will help determine if proteins being featured are driving the most revenues (some proteins selected for a carving station may not yield the best profit). After further analysis, ACS may find that a top round of beef may be a better offering than Prime Rib because it contains the best yield and is suited best for that product application. ACS will do the same analysis for hors d’oeuvres, breakfast items, buffets, etc. to identify the best plan of action to improve food and beverage profitability.
Thorough analysis into areas such as menu management, product and price management, waste and yield management, dining operations, food safety, labor effectiveness, and marketing/sales and promotions enables ACS to implement best practices for enhancing revenues, better managing costs, and providing cost profitability improvement recommendations. Learn more about ACS here.