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Showing posts from September, 2022

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

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