By Yoland Perras
Considering that our Food & Beverage revenue share will be close to 50% of our total revenue, careful analysis of the food & beverage market is important to assess local clientele needs.
Actually, when entering a new market you must conduct many surveys to ensure that you are in line with the local market. Whether it’s salary, rooms, business segments, or food and beverage, it is vital that you have a clear picture of market trends and market demand. The Chinese hotel market is expanding and diversifying rapidly, so as the environment becomes more competitive, it is more vital you find your niche as a newcomer.
Nothing new will you say – yet in China you need to apply these principles strictly and add some local flavours into your approach if you wish to be successful. What I mean by local flavour is that you must adapt your offers to the environment you are in. What you offer in Moscow as promotions for example, will not apply to the Chinese market.
In Moscow words such as, elegance, style, be seen, and fashionable are important if you want to attract the locals. In France, chic, unique, romantic, and pricey are often mentioned.
In China, discovery, connected, cheaper, new, growing, and young are the fabric of today’s working class. As such, pricing needs to meet with the growing demand for new places, yet you cannot be overpriced if you want locals to discover your venue. In addition, they are very volatile, so service is the next best thing you can do to ensure their return.
Wuhan challenges for F&B
It is common knowledge – unfortunately for some die-hard expats who are looking for “their food” – that Western restaurants in China exist mostly in Shanghai and Beijing where expats and local clientele will patronize a wide variety of international cuisines. In most other cities, however, locals shy away from the unknown and will mostly be found in their local food eateries.
Anywhere in the world, restaurants and bar venues cannot sustain themselves with expats and visiting tourists. They need locals to flock to their place to stay alive and financially sound. I have seen and eaten in many wonderful “western-style” places in China, where there were only 10 -12 customers on a good night enjoying wonderful meals and service, only to find these places closed after a few months.
However since my arrival in Wuhan, I have experienced a wide choice of Western food which provides us, the team of Food & Beverage, with ample opportunities and of course nice challenges. Aside from the well known junk food places, you can eat delectable Spanish tapas, tasty Italian noodles and pizzetas, flavourful Turkish hummus and kebabs, French foie gras and German sauerkraut and pork knuckle, all genuine food with no sorry imitations.
At the Sheraton, I will have an authentic Thai specialty venue with an “authentic Thai” chef, contrary to some local places where they provide a fusion of Chinese and Thai taste. I am please to report that I already taken my first reservations for as soon as we open, although it is some months away.
The challenges of operating successful F&B venues will help us be consistently innovative and creative in our approach so as to provide for an enjoyable experience.
My Food & Beverage team was tasked to assess the city trends and line up opportunities for our own segment of revenue for the hotel.
Tasks to assess
1. Lunch segment and dinner segments during week days in:
a. Hotels – so we can compare “apples to apples”
b. Free standing venues – to know more about what we compete against
c. Shopping Malls – as we have many F&B venues connected to our Hotel hence additional competition right at our footstep
d. Chinese and Western food – to learn about trends in the city
2. Lunch and dinner segments during week-ends for the same premises as above.
In Wuhan, we observed that local clientele will spend much less for lunch by going to Local eateries or targeting group purchasing offers, which gives them more money to spend with their friends at dinner time. They search, text and meet each other at places that offer the most for the least.
Yet there is also a segment that is ready to spend more for quality food and service. In that regard, you need to be able to offer a palatable package and attentive service. Diners are also more inclined to try new venues notwithstanding pricing, as they thrive to discover and taste new dishes. They love to share meals with a group so their average per person spend is less. This way of eating is deeply rooted in the Chinese culture – when they go to their local eateries or eat at home, many dishes are placed on the table which are shared by all.
Adaptation to the local customs is key so that expectations can be met. As an example, my favourite little and tasteful “Spanish” restaurant adapted, without having to change their menu, to the locals by offering group purchasing with a combo menu where everyone can eat. And they are full 9 times of 10 for lunch and dinner.
About the author
Yoland Perras is the General Manager at the Sheraton Wuhan Hankou Hotel. His series of articles brings ehotelier readers a first-hand account of what it’s like opening a hotel in China.
