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Hotel restaurants are losing market share

10 November 2005
Hotel restaurants are losing market share

Hotel dining is on the decline, with guests increasingly choosing to shun in-house eateries in favour of nearby restaurants, according to a new report.

Research by Mintel predicts that the hotel catering market will be worth £4.1b in 2005, compared with £3.8b in 2000, representing a 6% fall in real terms.

The demise of hotel catering is set to continue, with revenue growth slowing to just 4% by 2010. This will value the market at only £4.5b, meaning hotels' share of the dining market will have fallen from 15% today to 13.2% in five years' time.

The report, exclusive to Caterer, claims the hotel catering market is not developing because most food and beverage managers are hoteliers rather than restaurateurs.

It also predicts more hotels will follow the trend of top-end businesses like Claridge's in London and outsource their food and beverage operations.

But some hotel groups are already trying to buck the trend of declining food and beverage revenues.

Thistle last month hired former Giraffe operations manager Dino Michael to develop new in-house concepts designed to operate like commercial high-street restaurants.

Thistle chief executive Beverly King said the group would unveil four new concepts from next March at its Bloomsbury Park, Tower Thistle, Cumberland and Victoria hotels in London. They will serve as a basic template for future roll-outs.

City Inn, whose Westminster hotel won the 2005 Group Hotel of the Year Catey, said it approaches restaurants as if it was a dedicated restaurateur. Managing director Huw O'Connor said: "When we are planning and designing hotels, we make sure they feel like restaurants rather than typical hotel dining rooms."

By Angela Frewin

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