Hospitality Matters: What’s next for hotel dining?
In the ’80s and ’90s, the phrase “going out to eat” meant dressing up in our finest clothes and walking into a fancy restaurant situated in a luxurious hotel; complete with beautiful chandeliers, white table-tops and crystal table decor.
It was a time when hotels in Bangkok were not only flourishing with room sales but profiting heavily from their F&B outlets, catering mostly to a leisure-travel demographic with higher spending power.
It was during this golden era that the well-known brand names synonymous to top-notch dining experiences made their debut. The 5-star flagship hotels of the time, including the likes of Dusit Thani, Hilton at Nailert Park, The Grand Hyatt, Mandarin Oriental, Royal Orchid Sheraton, and Shangri La.
I fondly recall dining at many of these hotel restaurants throughout my youth, accompanied by my parents. I remember how The Hilton at Nailert Park had a lavish brunch overlooking its beautifully manicured landscape that made many of our Sundays unforgettable. One of my all-time favourites is the teppanyaki at Shogun at Dusit Thani. I also spent many nights at the nightclub Spasso at Grand Hyatt Erawan, a real money-maker for the hotel although I am not able to confirm it with any numbers.
Anghaar Paslia at Charcoal
Fast forward to 2020 and Bangkok is now overpopulated with hotels and restaurants and where once consumers flocked to the same few well-known brand names, today they are spoilt for choice. I find it hard to keep up with the number of openings I see announced on major dining publications – and to be honest, I’ve stopped counting. I believe that the growth of main street restaurants is predominantly due to the food-loving culture, the ever-evolving sophisticated palette of the Thai people and the percentage of income spent on dining-out among locals.
A recent study indicated that the average Thai dines out almost 60 times a month, ranking second only to the Chinese! Another reason that the Bangkok food scene is bustling, is that the barriers to entry in the restaurant industry are much less than they are anywhere else in the world. It is very easy to find low-rent property sites here and it really helps that the Capex and Opex to open a restaurant in Bangkok is far lower than say cities like Singapore or Hong Kong.
The demographic of travellers coming into the country has also evolved significantly. Bangkok now caters to mostly lower to middle-class travellers with the influx of Indian and Chinese travellers causing per capita spending to head downwards and consumer preferences to move away from hotel dining establishments to independently-operated restaurants.
Charcoal
The evolution of the hotel F&B scene in Bangkok can also be attributed to the new emerging demographic – Millennials and Generation Z’s (the topic of my next article, stay tuned!). Millennials are an adventure-seeking, pocket-conscious group of people that choose to spend less time in hotels and more time exploring the streets of the city. With the proliferation of online technology, this segment of consumers carefully research the restaurants and bars they want to visit as part of their travel itineraries and pre-book their tables well before embarking on their journeys. The restaurants and bars they tend to visit are mostly independent main street restaurants which are able to offer an authentic meal with a compelling yet unpretentious experience – both, with a value for money proposition.
It is not just the tourists though, even locals and expats in Bangkok have altered their preferences moving in the same direction as tourists – away from dining in hotels.
At the same time in which main street restaurants were gaining market share, hotel operators’ pipelines grew tremendously as a result of the travel boom. Global hotel operators expanded their foot print aggressively in Asia, consolidating through mergers and acquisitions as they planted their flags across South East Asia (including Thailand which grew to 38 million inbound travelelrs in 2019!).
(left) Spasso (right) Havana Social
With each flag the operators planted, their F&B departments were further overwhelmed with the number of F&B outlets they needed to conceptualise to match the pipeline. This was happening at a time in which consumers were becoming more discerning and demanding in terms of their restaurant experiences. Over the last few years, global hotel operators have been fighting to regain their foothold by restructuring their F&B organisations with an independent mindset and approach. They have also at times, began partnering with independent brands to offer a differentiated hotel dining experience.
So what’s next for hotel dining? The Covid-19 pandemic will further constrain hotel F&B cash flows for the short term, but I expect hotel restaurants to become more competitive and bring back some of the lost flair in their offerings going forward.
The one area I believe hotels need to focus on is in the MICE space, where hotels have a distinct advantage over independent restaurants which lack the bandwidth and space to cater for larger audiences.
There is also a lot of chatter both amongst industry professionals and consumers in terms of what will happen to the hotel breakfast offering and restaurant experience in general due to social distancing and increased hygiene standards. My perspective is that the old normal will eventually be the new normal. As long as we continue to dislike wearing masks and have the need for human interaction, the lavish Sunday brunch buffets at our favourite hotels will be here to stay.
This article was originally published on the Bangkok Post.
