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Restaurants manage to minimize the impact of rising food and labor costs

  “ Everything is getting more expensive every day! ” Is that how you feel about today’s inflation?   Consumer prices   at grocery stores, for example, had increased 13.1% in July 2022 from a year before.      Higher food prices and increasing wages pressure restaurant operations   Food and beverages are the core product that a restaurant sells. Food and labor make up a restaurant's two highest variable costs. Besides higher food prices,  labor costs  in the second quarter also surged 5.1% from last year, recording the largest rise since 2001. Restaurants are under high pressure to increase meal prices.    Restaurants manage to raise the menu prices at a lower rate     Consumer prices at restaurants in July 2022 only increased 7.6%, resulting in the most significant inflationary gap between grocery stores and restaurants since the 1970s. By comparison, restaurant meals have become a “bargain” now. More people go to fast food restaurants for cheap bites instead of cooking at home. T
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Will business travel spending return to the pre-pandemic level soon?

The U.S. hotel industry reported the highest room rate in July 2022 on a nominal basis. According to the   STR   (Smith Travel Research) data, the key performance indicators for the industry include: Occupancy: 69.9% ADR (average daily rate): $159.08 RevPAR (revenue per available room): $110.73   Using June 2019 as a reference point, the industry reported a -5.4% percent change in occupancy, a +17.5 percent change in ADR, and a +11.2 percent change in RevPAR for the month. If inflation is ignored, the hotel industry had already recovered in ADR and RevPAR, exceeding the pre-pandemic level. This recovery is driven by the rate instead of occupancy.     Yet, there is no real sense of recovery without the business travelers   AHLA projected that business travelers would make up 43.6% of the room revenues for the hotel industry in 2022, down from 52.5% in 2019. That is a $21 billion difference. Although there are more “ bleisure ” (business + leisure) travelers in the market, the industry s

Is it time to revisit your company's "100% Satisfaction Guarantee" Policy?

“The customer is not always right, but your job is never to show them how they’re wrong. Your job is to be professional, courteous, accommodating … even (and especially) under stress.”   --- Steve Dorfman, Driven to Excel   The consumer is always right, isn’t it?   For decades, companies have been doing their best to ensure that their customers are 100% satisfied. Many hotels adopted the “100% Satisfaction Guarantee” policy that comes with a 100% refund if customers are not 100% happy. There is nothing wrong with companies putting the customer first, but is it now the time to revisit such a policy?   Is the 100% satisfaction guarantee policy dated?     That should not be a concern if few customers abuse the policy. In today’s marketplace, however, such a satisfaction promise has led to more discontent among hotels and customers ( Franch, 2022 ). Plus, service providers in the hospitality and tourism industry must deal with more demanding customers with a smaller workforce now, a situat

What if your restaurant is threatened with a one-star Google review?

No matter how impeccable service a restaurant provides, chances are it will still receive negative online reviews from time to time. Recently, some top-rated restaurants in San Francisco and New York, including those with Michelin stars, began receiving a blitz of one-star ratings on Google with no description or photos ( Morales, 2022 ). The owners believed those leaving one-star ratings had never dined in their establishments. Moreover, soon after the reviews, they all received emails from the reviewers who claimed the responsibility.      What did the reviewers want by leaving one-star Google ratings?     The reviewers asked the restaurants to pay them a $75 Google Play gift card before they would remove the ratings. If they did not receive the gift card, they would add more bad ratings to the business.     How did the restaurants respond to those negative reviews?     One owner tweeted about her experience to Google as a complaint. Google removed the one-star ratings for her. Anoth

The Best Restaurant Revealed

Likely, every consumer has his/her/their own standards regarding the favorite place to dine out or for special occasions. Is one of your favorite restaurants also voted the best in the world and in the U.S.?   The world’s 50 best restaurants   A total of 1080 restaurant experts across 27 regions around the world cast their anonymous votes for the world’s 50 best restaurants. Only three restaurants/farms in the U.S. made this year’s list, including two in New York City and one in Northern California ( Canavan & Sutton, 2022 ). They are:     No. 33 Atomix, NYC No. 44 Le Bernardin, NYC No. 50 Single Thread, Healdsburg, CA (a farm/restaurant/inn)   Geranium in Copenhagen took the crown this year. Other “best” awards go to:     World’s Best Pastry Chef: RenĂ© Frank of Coda in Berlin World’s Best Female Chef: Leonor Espinosa World’s Best Sommelier Award: Josep Roca The Art of Hospitality Award: Atomix in NYC (also ranked No. 33 on the list)   America’s favorite restaurants   America’s fav

Will movable hotel rooms become a permanent lodging product?

Hilton rolled out a tiny 160-square-foot hotel room that is on wheels ( Chang, 2022 ). The “pop-up,” movable hotel room was designed for golf enthusiasts at the 2022 RBC Canadian Open between June 9 and 12 and the Women’s Open in August. The hotel room was built onside on a custom trailer that is situated on the green near the third hold.   What does the Hilton’s movable hotel room look like?   Although the hotel room looks small from the outside, it has everything that a typical Hilton room offers. There is a bedroom, bathroom, and windows for panoramic views of the golf course, plus a deck that gives guests direct access to the golf course. It also comes with linens from Waldorf Astoria and the DoubleTree cookies. The room is movable and self-sufficient. Ideally, it can be placed wherever Hilton wants to.     How can travelers book a stay at a Hilton’s movable room?     At this point, the removable room is made exclusive to golf tournaments. Hilton held an online contest for golf and

A call for industry-academia collaboration to address the labor shortage challenge

When the pandemic hit, the hospitality and tourism (H&T) industry immediately responded to the crisis with furloughs and layoffs. It did not take long for the industry to realize that it must deal with the labor shortage challenge. In fact, the labor shortage challenge is not new to the H&T industry, but the “Great Resignation” during the pandemic has worsened the situation.     In one of my recent publications in the   Journal of Contemporary Hospitality Management ,   I presented three propositions about the labor shortage issue facing the H&T industry. The paper aims to initiate a conversation between our industry leaders and administrators/professors in academic programs with some collaboration ideas. The following are some key ideas.     The three questions being discussed   Will the worsening labor shortage challenge facing the H&T industry improve in the short term?   How can industry professionals and academic leaders/professors work together to address the labo