Outside food-delivery services gain traction at hotels

Some hoteliers are embracing new-breed food-delivery services such as Grubhub, UberEATS and DoorDash to supplement their own F&B offerings. Sources indicated that such relationships may prove increasingly valuable over time, as guests continue to move away from ordering hotel roomservice and have growing interest in niched food offerings.

Experts say the expansion of offsite food ordering beyond the traditional pizza and Chinese food delivery is yet another reflection of the evolution of hotel guest preferences. Even at full-service properties, hotel restaurants can’t be all things to everyone (for example, offering everything from sushi to Indian cuisine).

Hotels that partner with outside food-delivery services—which may include making menus available in guestrooms, or even tying partnerships into loyalty programs—see it as adding value and convenience for the guest. So while not a direct source of revenue for the hotel, these services contribute to the overall guest experience, hopefully making it easier for guests to plan a return stay.

“There are hotels who’ve done a great job of letting the guest order from a smart device, so you can have the food delivered to you on the property. That’s an excellent industry response, but that does take investment and foresight,” said F&B consultant Aaron Allen, head of Aaron Allen & Associates.

“There’s a tremendous amount more variety available through delivery than a hotel could possibly hope to match or offer. Any time there’s a disruptive technology, a certain segment of the industry will try to cling to the way it was before, but you can’t stop change. There’s a way of embracing it.”

Benefits of partnerships
Hyatt Hotels recently partnered with Grubhub, which delivers food from local restaurants in each market where it operates. The Hyatt program first piloted in April 2016 at the Hyatt Centric hotels in Long Beach, California; Park City, Utah; and Miami. It has since expanded to nine Hyatt Centric hotels across the U.S.

The Hyatt-Grubhub relationship is part of the Hyatt Centric brand’s Restaurant To Go program, which is a full-service in-room dining offering that also includes on-property restaurant delivery and a 24/7 Express menu. The new Grubhub option allows guests to order from a list of local cuisine compiled by local experts. Hyatt sources said the guest reception to the pilot program has been positive.

“Hyatt is continuously looking for new ways to improve F&B offerings and what we hear most is that travelers simply want more options. This includes the freedom to choose from a variety of different cuisines at times convenient for them,” said Sandra Micek, SVP of global brands for Hyatt.

InterContinental Hotels also partnered with GrubHub in recent months, offering IHG Rewards Club members the option to order though its mobile app and website for delivery to guestrooms at more than 1,000 of its limited-service hotels, including Holiday Inn Express and Candlewood Suites properties in markets where Grubhub operates. IHG Rewards Club members can earn loyalty points for using the service.

IHG struck a similar arrangement with OpenTable for its full-service hotels, allowing guests to earn IHG points for dinner reservations made through that service, including bonus points when booking at on-property restaurants.

The company sees the benefits of such partnerships as two-pronged: It addresses the needs of guests staying at IHG hotels without onsite dining, while rewarding them for booking the Grubhub deliveries through IHG channels.

“When you think about being on a property that doesn’t have full-service F&B, and you’re looking for meal options, Grubhub just seemed like a great partner for us to consider and work with to fit the needs of what our members and guests are looking for,” said Liz Crisafi, IHG’s head of loyalty, partnerships and portfolio marketing for the Americas.

“It’s something we’ll continue to watch and monitor as these delivery services evolve, but if anything, I think it’s a huge opportunity for us to look at how we leverage these partnerships even more to drive even more revenue for our hotels and for our F&B experiences. We look at it more as an opportunity than a threat.”

Others are offering similar outside food delivery on a hyperlocal level. At the Hotel Chicago on the Near West Side, management partnered with a local delivery service called Eat Purely, which offers several chef-made organic meals each day, available within 30 minutes or less. The value-added service is a convenient and healthy dining alternative the hotel—which lacks its own restaurant—can offer guests.

“The hotel itself is in the medical district, and is a rooms-only property, so we had really no avenue for food delivery,” said Imran Jivani, former GM of the hotel, who instituted the Eat Purely service there. “Since we had a lot of medical or medical-needs guests who were staying with us for an extended period of time, and our rooms had microwaves and full fridges, it was an instant fit. They can order a week’s worth of food, and we can put a magnet on the fridge to push them in that direction, so it became a no-brainer.”

The future of F&B?
In general, hoteliers don’t see these outside food-delivery services taking the place of hotel sit-down restaurant dining, but many do see them as yet another substitute for roomservice, in addition to concepts like hotel grab and go. The key, they say, will be finding providers that are the right fit for the hotel, and its location, and exploring ways to potentially benefit from an alliance.

“I think there’s a great incremental revenue stream out there. I don’t think it’ll be one of those pivotal moments on the P&L where it puts you over the top, but there will be little streams of revenue that will come in,” said Jivani, who’s now the hotel director for Midtown Athletic Clubs in Chicago.

“It’s one less thing for a (hotelier) to worry about. Now you’re putting the power in the hands of the people, so a guest is going to order food when they need it, and have it arrive just like with any other delivery (person) making their way through the lobby to drop something off. It’s very easy. There’s no reason not to do it.”