How to make hotel restaurants more appealing to locals

23Jun10

As of today, there are basically zero breakfast restaurants within 2-3 blocks of where I live. In the spring or fall, this isn’t much of a problem: the weather is mild, and it’s nice to take a long walk on a Saturday or Sunday morning. But in the summer or winter, distance rules. Anything that’s more than 5 minutes away just isn’t worth braving the hot or cold for.

Actually, I should clarify this a bit. When I say there are no breakfast restaurants nearby, I am purposely excluding several options that are located inside hotels. Why? Because they’re insanely overpriced. Case in point: I heard some nice things about a simple breakfast place in one of the hotels near me. There was virtually no info about it online, so I called them up. The price for their standard breakfast? Something like $25 per person. Chicago isn’t exactly the cheapest place in the world for dining out, but that restaurant’s prices are still about twice what a normal restaurant would charge.

It’s no secret that hotel restaurants charge inflated prices to capitalize on business travelers (who presumably are on an expense account) and tourists (who don’t know any better). But they’re missing out on a big chunk of local residents who might eat there regularly, if only the prices were lower. In fact, there’s really no reason they can’t segment their customers and offer an option for each group.

Here’s how it would work: just offer a local resident discount that brings the price back down to earth for people who live or work nearby. You could even limit this to the slow season when hotel occupancy is weak. And while the average revenue per person might be lower, these additional customers would help increase total revenues and profits. Perhaps more importantly, the more varied customer base would go a long way towards smoothing out the peaks and valleys that occur when you rely solely on hotel guests to fill your tables.



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