- What is your strategic pricing plan for your banquet and catering menus compared to your competition in all meal periods?
- Have you calculated your retail opportunity average check and is so, how often does is vary from your actual performance?
- What is your acceptable variance factor between retail opportunity average check and actual average check?
- How do you measure variances in average checks by market segment to maximize revenues?
- What is the menu audit process to evaluate the efficiencies in your property's space management system? Has an audit been completed within the past 12 months?
- How is the information from a space management system audit used by your team to maximize banquet and catering revenue generation?
- What percentage of menus is manually entered on BEO’s? What practices do you employ to minimize manual entry?
- How do you determine banquet and catering minimums and adherence to the guidelines to ensure profitability is not compromised?
Tuesday, March 12, 2013
Getting the most out of Banquet and Catering
by Neil Pompan, CMP; President, PHG, Inc.
Smith Travel Research is on the verge of releasing a new index that will measure Banquet and Catering contribution to property performance. Unlike guests rooms and average rate which are for the most part objective; the factors involved in BnC success such as event room sizes and configurations, menu complexity, upselling skills, and the like are subjective. This will no doubt create a great deal of debate because of the inherent conflicts of comparing ones performance against others.
I predict that in time the debate “noise” will settle down and the industry will agree to accept the inconsistencies in comparison in favor of the consistency of a regular metric that will give operators the ability to compare period to period within their respective markets. In time, such an indexing report will be noticed by owners and developers and as such, it will integrate into the analytical culture of how property success is measured and understood.
This is a long overdue revolution. Food and beverage, and specifically banquet and catering, has always been the misunderstood stepchild of a properties operations and revenue streams. We all want more events, higher average checks, better meeting room rentals. We all have meetings on how to improve performance in this area and we comfort ourselves with the action plans we create to make such improvements. But how many of us understand and measure, for example, the difference between actual banquet and catering average check versus retail opportunity average check. The difference between the two is money on the table. How many of us have a strategy in place to handle price push back that does not compromise profitability? How many of us are manually entering more than 10% of menus onto BEO’s.
The following is a list of questions a property should ask and answer if they want to feel confident that they are maximizing the potential of their banquet and catering profit contribution:
Sometimes the hardest thing for and operator to do is take a step back and devote the time needed to fully understanding a situation. With only so much time in a day, operators need to ensure they are being as effective as possible in what they are selling and servicing to maximize profitability, otherwise all the work they are currently doing is being wasted. The questions above, and many more, once understood and answered, will serve to help a property map out the strategies and tactics needed to make the banquet and catering function operate at maximum profitability and become better prepared for the analytical performance measures that are on the horizon.