The food and beverage (F&B) business seems to be cooking almost half the revenues for international hotel chains in India. In contrast to the global trend, hospitality chains like Marriott Hotels and Accor Group are seeing a significant chunk of the India revenue coming from the F&B segment.
Marriott Group, with hotels like Courtyard and Fairfield, has launched restaurants such as Shakahari, Momo Café, Redzon, Fratelli and bakeries as well. In India, 50 per cent of the group’s revenue comes from the F&B segment, while internationally it makes for about 20 per cent of overall earnings. This holds true for most international hotel chains, as they tend to focus increasingly on the restaurant and bar offering in the hotel.
“In the US, people prefer to go out to eat. In India, there aren’t many options. Also, we get a lot of walk-in guests in the restaurants that contributes to our incomes,” said John Woolley, area director (sales and marketing), Marriott International.
Having launched some of its restaurants in India, the group is now planning to take some of these brands to other countries as well. “We are planning to launch Momo Café in China after seeing its success in the Indian market. We would consider expanding some of the other brands launched originally for India, to other international markets,” Woolley added.
According to experts, internationally, the food and beverage option is provided by hotel operators merely as an additional service for guests and not as a profit centre. In India, however, companies are viewing it as an opportunity.
Accor group’s economy brand, Ibis, came up with its all-day dining concept with an extensive Indian menu offering, Spice It. The hotel has also started F&B room delivery service in India. The hotel company also introduced its bar, the Hub, across all Ibis hotels here.
“It is not uncommon for our hotels in India at times to have up to 50 per cent of the revenue coming from the food and beverage operation. Our upscale brands such as Pullman would typically have such a weighting, whilst our economy Ibis brand will be much lower. This is due to larger hotel conference facilities and a higher number of outlets in our India hotels,” said Jean-Michel Casse, senior vice-president, Accor India.
The hospitality companies are also now seeing restaurants and bars playing an important role in the positioning of a hotel from product and brand perspective in the India market.
The hotel chains are not expecting any decline in the F&B contribution to the overall pie, at least in the short run. Factors like wealth creation, urbanisation and globalisation have also created a more sophisticated consumer who has interest in fine dining, new cuisine and wine. “F&B continues to be a key contributor of top line in terms of revenues and driving awareness in the local market while we all know that rooms drive greater bottom line and hence the two go hand-in-hand,” said Vikas Malik, regional director (F&B), South Asia at Starwood Hotels and Resorts.
Starwood Group, introduced a new restaurant brand, Kangan, for Westin Hotel in India, even as it develops a few more branded concepts for India by the end of this year. For the hotel company, it is expected to be a key revenue driver. “This ratio is going to further change towards more positive percentage contribution from F&B,” added Malik.