How Groups Can Offset High Food and Beverage Costs

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice concerning any particular legal matter.

In this video, Sean Whalin (Co-founder and CEO of HopSkip) sits down with Barbara Dunn (Partner at Barnes & Thornburg LLP, representing groups) and Lisa Sommer Devlin (Devlin Law Firm, P.C. representing hotels) to discuss how groups can offset high food and beverage costs while making it a win-win for hotels. 

How Groups Can Offset High Food and Beverage Costs While Still Making the Booking a Win-Win for Hotels.

TL;DR:

• Understanding and documenting what your group has spent in the past on food and beverage in your event’s RFP is step #1
• Communicating with the hotel's food and beverage director or chef to find cost-saving menu options and being clear about dietary restrictions upfront is highly recommended
• Focusing on creative menu options rather than negotiating discounts and considering aligning menus with other groups in the hotel.
• Analyzing and tracking your event F&B spending across your meetings and events is critical to achieving consistent cost savings 

Video Transcript:

00:00 Sean Whalin

With F and B minimums rising. How can groups offset such high food and beverage minimums while still making the booking a win for the hotel?

00:12 Lisa Sommer Devlin

Well, let me start with this one just because again, this goes back to my whole communication thing. First, you should ask to speak to the food and beverage director or the chef at the hotel and ask what are your ideas? For example, there may be a situation where if you plan your menu the same as another group in-house at the same time, there may be cost savings to the hotel and cost savings to you. Again, this should be a partnership where you're working together with the hotel saying what can we do? What menu options do you have that can save me money? You have to understand that in this environment, things that you used to do that used to say things like, we'll get a 10% discount off of food and beverage pricing may no longer work because food costs have gone.

01:00 Lisa Sommer Devlin

Up so dramatically in the last year or two that if hotels have to cut any more than they already have, you're going to be unhappy with the food and beverage that you get. Instead of having contract commitments about pricing or contract commitments about discounts, I think it's a better idea to communicate about how you can come up with creative menus and what you can do to minimize your pricing. Another thing that's a big issue in the industry is people with dietary restrictions. The more menu items you add, the more complicated you make it. Because of these dietary restrictions, the more price you may be facing more. Again, communication about how we can address the dietary needs of our guests without increasing the pricing significantly can be very helpful. Barbara, what do you think?

01:50 Barbara Dunn

I agree with you Lisa. You and I have talked over the years that trying to get discounts on food and beverage probably isn't the best approach. Because at the end of the day, you may not be getting the end product you want. Or you need the same size bagel or the same size chicken breast, whatever the case may be. I do think it's important, as you suggested early on, to have a discussion about food and beverage. We all know food and beverage is an essential component of any meeting and event and is essential potentially as a room. That said, really having the discussions early on, making it a key point in your request for proposal for your RFP is a good strategy. I think what we've seen post-pandemic or still as we're hopefully coming out of the pandemic, is folks want to get together, they want to network.

02:39 Barbara Dunn

Groups are spending more on food and beverage and networking events at their meetings, which is great. The challenge may be the pricing and as you suggested the delivery. We're maybe coming out of a circumstance in which meals were served, sealed up in boxes, and different types of service standards as might have been needed. With all that said, I think it's very important to be clear about that, and I think strategies, as you suggested, potentially of trying to align menus with things that other groups in the house are doing is good. Dietary needs and restrictions are huge and I think groups I know work hard to try to address that. Hotels do too. The food and beverage pricing is really key. I think a lot of groups like the strategy of negotiating confirmed pricing. For example, the coffee right, the earns, how much that's going to cost?

03:36 Barbara Dunn

I think there's some predictability and that might be a good thing. Of course, it's going to depend on every group. I do think the pricing discounts to me aren't the best way to go. I think often it is the case is having discussions and maybe agree even to some sponsored events. Hotels often may offer a sponsored welcome reception and things along those lines. Look at your Master account bill from your last meeting, look at what you spent on food and beverage and I like your strategy Lisa, about the spreadsheet and ask how can we move the needle in the direction that we need it to move and it's going to make a difference. I think that's going to be really key and I think groups focusing on that is key. As you and I probably rarely had disputes over the years on a group not meeting a food and beverage minimum because with pricing increases it's often the case that they will.

04:30 Barbara Dunn

That doesn't mean that there still aren't food and beverage pricing or issues associated with that. Again, I think the group needs to strategize about what it needs on the food and beverage side, communicate that, have a dialogue, and then write it up as appropriate in the contract and then of course police it because of course we've seen supply chain shortages and they still can't occur. You might get eggs for breakfast, but they might be more expensive. I think the ability as it relates to even coming into the banquet event orders or BEOs becomes important too. This isn't something you negotiate done that you're not staying on top of. I know all the folks on both sides are paying attention to it, but definitely something I think that's a need group for Sean, for groups to troubleshoot these days and I know that putting that information as well into the platform is another key component and hopefully getting a better end product out.

05:32 Sean Whalin

Yeah, it's a great point. I was going to mention, too, not to make this a plug about HopSkip, but that's one of the benefits planners are able to achieve when using the Hopskip platform to source their hotel meetings and events. Not only can they document all of their event specifications and F and B needs, but when proposals come back from hotels, you'll be able to compare and analyze and project your total spend for food and beverage as well. You'll be able to have those costs documented as you go into different negotiations with the various hotels requested for a proposal.

So all good stuff. I appreciate both of your answers there, Barbara and Lisa.

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.