Hospitality Profitability Tips

A friend opened a restaurant in Madrid – it’s called Akiro and it’s on track to breakeven 7 months after opening, unheard of for a restaurant. Talking with him last month, he says its success comes down to 3 things: 1. Foot traffic He scoped out the entire city to find the spots with the most foot traffic at both lunch and dinner time (they walk everywhere in Madrid). Then, it’s just a numbers game. How could he get a % of people who walk by to come in? They invested a premium to get an excellent location. 2. Product He said the product is much more than good food. That’s a bare minimum. Instead, he said to think of it as the whole experience. What’s the noise level? What music’s playing? How does the restaurant design enhance everything else? Also, he changes one menu item every week. Has a massive spreadsheet that tells him what’s being ordered, profit margins on each item, etc. He gets rid of the least popular thing, tries something else. Every. Single. Week. He says the menu is 10x better than it was when they opened. 3. Social proof They leave a QR code that goes to a Google review on the bottom of each check. 737 reviews, 4.9 stars. Also, remember the restaurant design thing? They've never paid for a TikTok or Instagram post, but they've earned more than 2 million impressions on those channels from customers taking videos and posting them. But it’s not only reviews and videos. I thought this was genius… The restaurant is designed so the line spills onto the street. And, every single day, there’s a line out the door at 2pm and 9pm. When you walk by and see a line, you think “Oh, that place must be good. I’ll check it out some time.” It’s fun to think about how each of these three ideas applies to every single business. 1. Get eyes on your products 2. Have great products and constantly improve them 3. Ask for case studies and other forms of social proof Now, 6 months after opening, he’s looking to expand in Barcelona. And he’s running the exact same playbook. *** I write about storytelling and building a writing business. Follow me Nathan Baugh for more like this. And if you wanna become a better storyteller, join 83,872 others getting 1 storytelling tip on Sunday morning. Hit the 'visit my website' button to join.

The future belongs to the fast. The vision of Industry 4.0 is to provide companies with the flexibility to respond quickly to the rapidly changing demands of the markets, increase the customization and personalization of products, shorten product life-cycles, and increase productivity. Modern technology, vertical and horizontal process and system integration, decision support systems, and cyber-physical systems all come together seamlessly allowing a factory to become smart and agile. Assets, processes, and applications will respond in real-time, drastically reducing the time between an event occurring and the implementation of an appropriate response. Increasing the speed at which companies can identify and react to changing conditions will be one of the biggest competitive advantages over the next few years. In fact, you could argue it will be more than a competitive advantage as customers will simply expect it. 𝐖𝐡𝐲 𝐢𝐬 𝐭𝐡𝐢𝐬 𝐬𝐨 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭? The answer lies in the direct correlation between decision speed and profitability. Studies have repeatedly shown that the faster an organization can make and execute decisions, the greater its sales and profitability. A notable study by Jay Robert Baum and Stefan Wally, conducted over four years across 318 companies in 10 industries, found that strategic decision-making speed was the biggest predictor of a firm's subsequent growth and profitability. McKinsey confirmed this in 2019, highlighting that the best organizations make good decisions quickly and execute them rapidly. These organizations were twice as likely to report superior returns on their decisions and exhibited higher overall company growth rates. In addition, According to Orgvue’s Time to Decision research, organizations with access to the right data make decisions addressing inefficiency and ineffectiveness 30% faster than those who don’t. Those same organizations also have seen 16% higher profits, as a percentage of total revenue. 𝐅𝐮𝐥𝐥 𝐚𝐫𝐭𝐢𝐜𝐥𝐞, 𝐢𝐧𝐜𝐥𝐮𝐝𝐢𝐧𝐠 𝐬𝐨𝐮𝐫𝐜𝐞𝐬:  https://lnkd.in/d_dkFEVK ******************************************* • Visit www.jeffwinterinsights.com for access to all my content and to stay current on Industry 4.0 and other cool tech trends • Ring the 🔔 for notifications!

Most restaurants measure labor wrong. The profitable ones track this metric instead. It changes everything: Labor percentage is the biggest lie in our industry. I watched a restaurant celebrate hitting 28% labor. They went out of business 90 days later. Meanwhile, my client runs 34% labor. And banks $12K more per month. The difference? They stopped tracking percentages. Started tracking productivity. Here's what actually matters: CPLH - Covers Per Labor Hour It's the only metric that tells you if your team is making you money. Real example from a $3.5M restaurant: Before focusing on CPLH: • Labor: 31% ($1,085,000) • CPLH: 1.84 • Annual profit: $186,000 After 8% productivity improvement: • Labor: 28.6% ($1,041,600) • CPLH: 2.0 • Annual profit: $329,400 Same staff. Same wages. Just better productivity. The formula is simple: Total Covers ÷ Total Labor Hours = CPLH But here's what most operators miss: No two restaurants are the same. Your CPLH depends on: • Employee experience levels • Kitchen and dining room layout • Training quality and systems • Section sizes and table turns • Manager presence and leadership • Menu complexity • Service style That's why comparing to other restaurants is pointless. Even within the same brand. Compare to yourself instead. Here is how they did it: • 4% more guests (better marketing & service) • 4% fewer hours (smarter scheduling) • Result: 8% productivity gain That's $143,400 more profit per year. From focusing on one metric. The shift is simple: —> Stop asking "What's my labor percentage?" —> Start asking "How can I improve productivity?" • Stop comparing to industry benchmarks. • Start beating your own numbers. Because you can't deposit percentages. But you can deposit productivity gains. What's your current CPLH baseline? Once you know that, you can start to make a real impact on the entire model. And drive profit you didn’t realize was there. PS - Comment "CPLH" below and I'll send you my calculator that shows exactly where you're leaving money on the table.

Here are 8 hospitality revenue strategies that actually work. Too many brands are still recycling lazy upsells and pretending it is innovation. Charging for Wi-Fi, bottled water, or early check-in is not strategy, it is desperation. The properties that will own the next decade are the ones that flip the script and turn ancillary revenue into experiences worth paying for. 1. Room selection as revenue. Guests want transparency. Show them the exact view, the layout, and the differences in real time. The more you let them see, the more they will spend. Hidden room maps are leaving money on the table. 2. Cancellation freedom. Stop punishing guests for life happening. Clear credit or voucher systems transform resentment into loyalty. Flexible policies drive more bookings and increase long-term revenue. 3. Loyalty on autopilot. Loyalty should be built into every booking, not treated like a side program. Auto-enroll, deliver instant benefits, and make guests feel valued the moment they confirm. This is how you build lifetime customers. 4. Empty space monetization. Lounges, rooftops, and ballrooms sit idle for most of the day. Turn dead space into revenue with co-working options, private dining, pop-up events, or micro-weddings. It is low-cost, high-return, and adds vibrancy to the property. 5. Wellness on demand. Stop limiting wellness to the spa. In-room yoga mats, meditation kits, and recovery tech should be easy upsells. Guests want to feel good everywhere, not just in a treatment room. 6. Personalization paywall. Control is the ultimate luxury. Let guests choose the scent of their room, pre-stock their minibar with what they love, or have their playlists waiting when they walk in. People will pay for experiences that feel like theirs. 7. F&B as content. A restaurant should not just be a dining room, it should be a stage. Offer chef’s tables, cocktail labs, kitchen tours, or immersive tasting menus. Guests spend more when they feel like insiders. 8. Sustainability as value add. Guests are willing to pay to be part of something bigger. Give them the option to fund local initiatives, support carbon offsets, or contribute to visible green upgrades. When done authentically, this builds both revenue and reputation. And let me be clear. The one thing that needs to end immediately is charging for Wi-Fi. It is insulting and outdated. The first hotel brand to step up and say “We have the fastest free Wi-Fi in the world” will not only win guests, they will own the global conversation. That single decision would be worth more than any upsell you are currently clinging to. Hospitality is not broken. It is uninspired. The future belongs to the brands that stop nickel-and-diming and start designing upsells that guests actually celebrate. So the real question is this. Are you building revenue strategies that create loyalty, or fees that create resentment? --- If you like the way I look at the world of hospitality, let’s chat: scott@mrscotteddy.com

In Hospitality, Revenue is Not Enough. These 5 Ratios Reveal the Truth. Over 90% of startups fail within five years — and most were growing revenue. I’ve seen the same in hospitality. Hotels celebrating high occupancy, packed banquet halls, and growing top lines — but beneath the surface: losses, debt, delayed payments, and thin margins. At GRT Hotels, I’ve learned this firsthand: Revenue tells you how fast you’re driving. But financial ratios tell you if you’re about to hit a wall. Here are 5 ratios every Indian hotelier must understand if they want to build a business that lasts: 🔹 1. Gross Margin What it means: How much money you keep after covering the cost of your services (rooms, food, etc.). Why it matters: A healthy gross margin (ideally 40%+) gives you power to reinvest in quality, innovation, and people. At GRT hotels , reengineering our menus to local recipes with a strong story in Radisson city center Bengaluru and streamlining purchasing helped increase F&B gross margins significantly by 14% 📌 More margin = more muscle. 🔹 2. Burn Rate What it means: How much cash you spend monthly to run your business. Why it matters: If you’re burning cash faster than you’re earning or raising it, you’re in trouble — no matter how great your revenue looks. During COVID, we cut our burn at Grand Chennai and other GRT hotels through smart ops and launching cloud kitchens — without compromising guest care. 📌 Control your burn, or your burn will control you. 🔹 3. Cash Conversion Cycle (CCC) What it means: How fast you turn your investment (in inventory, services) into cash from customers. Why it matters: A long CCC means your money is stuck — even if your sales are high. At Radisson Blu GRT Hotels and suites Chennai a we moved to upfront wedding payments , tight controls on credit and renegotiated vendor terms, improving cash flow. 📌 Revenue without cash is like bookings without check-ins. 🔹 4. Debt-to-Equity Ratio What it means: How much debt your company uses compared to its own capital. Why it matters: Too much debt makes your business fragile during downturns. Our expansions like Great Trails Kodaikanal and Radisson Pondy Bay and other GRT hotels were built with strategic capital, not over-leveraged loans. 📌 Debt must power growth — not pressure survival. 🔹 5. CAC to LTV Ratio (Customer Acquisition Cost vs. Lifetime Value) What it means: How much you spend to get a guest vs. how much that guest brings over time. Why it matters: Sustainable brands spend wisely to earn deeply loyal customers. With our Great Foodie loyalty programs and direct booking incentives we drive 3–4x the value of one-time OTA bookings. 📌 Loyalty is not a program. It’s a profit engine. 💡 Want to build a hotel that thrives, not just survives? Know your numbers. Respect your ratios. Lead with clarity. Because applause fades. But fundamentals last. #HospitalityLeadership #FinancialAcumen #GRTHotels #IndianHospitality #HotelProfitability #BuiltToLast

I came across this menu today at a hotel (apologies for the quality of the picture!), and I thought it was a good case of F&B Revenue Management and Menu Engineering. This isn't just a list of dishes; it’s psychological pricing: 1. Price Anchoring: The Beluga Caviar at 300 serves as a powerful anchor. It makes the Holstein Beef Burger at 29 feel incredibly reasonable and drives sales toward those profitable middle-tier items. 2. Visual Guidance: Notice the icons (like the 'V') and illustrations. These are deliberate ‘eye magnets’ used to guide customers toward high-margin selections, often increasing profitability without them even realizing it. 3. Value-Driven Language: Specific descriptions ("with its classic garnish") boost the perceived quality and justify the price point. It often surprises me how many hoteliers and Revenue Managers completely neglect this critical revenue stream. True Total Revenue Management includes F&B, and if RMs aren't actively collaborating on and quantifying the effects of Menu Engineering, they are leaving significant profit on the table.

Here's what restaurant consultants charge ₹5 lakhs to tell you...and why most owners learn it too late. The 30% Rule Nobody Follows Food costs should never exceed 30% of revenue. Sounds simple? Then why do 80% of Indian restaurants operate at 45-50% food costs? Successful chains like Barbeque Nation engineer their buffet offerings to maintain exactly 28% food costs while making customers feel they're getting incredible value. The Ghost Kitchen Gold Mine While traditional restaurants struggled with real estate costs, brands like Rebel Foods (Faasos, Behrouz Biryani) built a ₹800 crore business from shared kitchen spaces. They operate 15+ brands from the same kitchen... something impossible with traditional dine-in models. The Loyalty Program Lie Most restaurants think loyalty programs mean "buy 9 get 1 free" cards. Meanwhile, Starbucks India's app generates 40% of their revenue because they've gamified the entire experience. Points, levels, exclusive offers – they've turned coffee buying into a mobile game. The Inventory Intelligence Pizza Hut India can predict demand for specific toppings in specific locations 3 days in advance. They waste less than 2% of ingredients. Compare this to independent restaurants that throw away 15-20% of purchased ingredients weekly. The Brutal Economics Successful restaurant chains aim for 15-20% net profit margins. If you're not hitting these numbers consistently, you're not running a business, you're funding a very expensive hobby. The restaurant industry rewards systems thinking, not just good food. Those who understand this build empires. Those who don't risk becoming cautionary tales. What's one restaurant "best practice" you think is actually holding the industry back? #RestaurantIndustry #FoodBusiness #BusinessStrategy #Profitability #GhostKitchens #FoodTech #RestaurantConsulting #IndianRestaurants #BarbequeNation #RebelFoods #StarbucksIndia #PizzaHutIndia

📊 Restaurant P&L Breakdown: Understanding the Numbers That Drive Profitability In the F&B industry, success isn’t just about great food and service—it’s about financial discipline. A well-managed Profit & Loss (P&L) statement helps operators analyze key costs and optimize profitability. 🎯Breaking Down P&L: Key Metrics & Percentages 1. Revenue (100%) - Food Sales – 60-70% of total revenue - Beverage Sales – 20-30% (higher for bars) - Other Income – 5-10% (events, catering, delivery fees) 2. Cost of Goods Sold (COGS) (25-35%) - Food Cost – 25-35% (depends on cuisine & supplier pricing) - Beverage Cost – 18-25% (alcoholic drinks have higher margins) 3. Labor Cost (25-35%) - Front-of-House Staff – 10-15% - Kitchen Staff – 10-15% - Management & Admin – 5-10% 4. Operating Expenses (15-25%) - Rent & Utilities – 5-10% - Marketing & Advertising – 3-6% - Maintenance & Supplies – 5-10% 5. Miscellaneous Costs (5-10%) - Licenses & Permits – 2-5% - Insurance & Taxes – 3-5% 6. Net Profit (10-15%) - Ideal profit margin after all expenses are deducted 🔴Example Calculation for a Restaurant Generating AED 500,000 Monthly Revenue - Food Cost (30%) → AED 150,000 - Beverage Cost (20%) → AED 100,000 - Labor Cost (30%) → AED 150,000 - Rent & Utilities (10%) → AED 50,000 - Marketing (5%) → AED 25,000 - Misc. Expenses (5%) → AED 25,000 - Net Profit (10%) → AED 50,000 ✅Why P&L Matters in F&B A well-structured P&L isn’t just a report—it’s a blueprint for success. Tracking food, beverage, labor, and operating costs helps business owners make data-driven decisions that enhance efficiency and profitability. 💡 How do you approach P&L management in your business? Let’s discuss #RestaurantManagement #ProfitAndLoss #FBCostControl #BusinessStrategy #HospitalityIndustry #FoodCost #BeverageCost #LaborCost #RestaurantProfitability #FinancialPlanning #FandBLeadership

Over the years, I've learned that true hospitality entails not just delectable food and a lovely setting, but also consistency, personalization, and attention to detail. From the time a guest arrives until they leave, every interaction counts. Whether you're new to the hospitality industry or creating your own concept, here is my ultimate checklist for creating a memorable guest experience: ✔️ First impressions set the tone The moment a guest walks through your doors is the moment their experience begins. Make it count. Make sure to greet them with a smile, eye contact, and enthusiasm that embodies the character of your venue. Within the first few seconds, people remember how you made them feel. ✔️ Anticipate needs before they ask Good service turns into great service at this point. Is your visitor running low on water? Between courses, has the table been waiting too long? Does a frequent visitor have a preferred seat or dish? Teach your staff to watch and respond before a request is made. Proactive service fosters loyalty and demonstrates concern. ✔️ Perfect the little details Often, the smallest things have the greatest effects. Consider how the lighting changes from day to night, how a napkin is folded, or how the music enhances the atmosphere. A unified, unforgettable atmosphere is produced by these details. Every location is created with the intention of telling a story, and the details are what make the tale come to life. ✔️ A strong team = exceptional service Without an empowered, well-trained, and mission-aligned staff, no venue can succeed. Being a host is a team sport. Make an investment in your people. Celebrate your victories. Openly discuss difficulties. Above all, establish a culture in which each team member takes ownership of the visitor experience because their concern is evident. ✔️ Tech should enhance, not replace hospitality Use technology to make things smoother, not colder. Digital tools and AI can help personalize menus, expedite reservations, and increase operational efficiency, but nothing can replace the human touch. Instead of reducing interaction, use technology to free up more time for your team to spend with guests. ✔️ Guests don’t just choose food, they embrace experiences We are now in the experience business rather than the food industry. People go out to experience celebration, comfort, connection, and excitement. Create moments that transcend the plate by planning your areas, your service, and your narrative. That's what makes a new visitor become a devoted regular. A successful F&B venue is about how you make people feel, not just what's on the menu. That’s the heart of hospitality. What do you think? What else would you include on this list? I would be interested in hearing your viewpoint. #HospitalityExcellence #CustomerExperience #HospitalityChecklist #7Management

Lately, I was sitting with a hotel GM, poring over the monthly numbers. All was good, profitability, revenue growth, cost metrices But then came the F&B report—a story of missed opportunities. It wasn’t that guests weren’t spending; they were just spending somewhere else. The problem? Guests loved the local taste in the market, and try that instead of identical hotel menus. They were flocaking to a trendy cocktail bar with Instagrammable drinks, and the buzzing local café offering live music on weekends. The truth hit hard: We weren’t just competing for heads in beds; we were competing for plates and glasses too. We brainstormed the ideas to reclaim our fair share of the guest’s wallet and came across few time tested options: 1. Curate Experiences, Not Just Menus Guests crave stories. Host a wine night featuring bottles from local vineyards or a chef’s table with dishes inspired by the region’s flavors. Make dining more than just a meal—make it a memory. 2. Partner with, Not Against, Local Attractions The café next door doesn’t have to be your enemy. Collaborate with them for exclusive guest perks: free dessert with dinner, a signature cocktail, or a voucher included in the room rate. When you work together, everyone wins. 3. Leverage Convenience Without Feeling "Corporate" In-room dining has a reputation for being uninspired and overpriced. Break the mold. Offer picnic baskets for guests heading to the beach or late-night snacks tailored to their Netflix binges. 4. Know Your Audience Families, solo travelers, couples—they all want different things. Maybe your rooftop bar transforms into a family movie night on Sundays. Or your breakfast menu includes quick grab-and-go options for business travelers. Tailor your offerings to their needs. Here’s the thing: When guests have an unforgettable dining experience at your hotel, they’re more likely to return—not just to eat, but to stay. They’ll remember the rooftop view, the friendly server, and the local flavors. And they’ll associate all of that with your property. So, if your F&B numbers are lagging, don’t just ask why guests are leaving. Ask how you can make them want to stay. And if you can meet them where they are, you won’t just win their dollars. You’ll win their hearts.