Customer retention | KRG Hospitality

November 8, 2023by David Klemt David Klemt No Comments

US Restaurant Employment Still Short

US Restaurant Employment Creeping Toward February 2020 Levels

by David Klemt

Keep pushing. We have work to do to reach February 2020 employment levels.

After what appeared to be a strong September 2023, restaurants and bars saw a decline of 7,500 jobs in the month of October.

In fact, the strong numbers from September were notably weaker once revised. After revisions, eating and drinking businesses added 48,300 jobs, not the nearly 61,000 from preliminary reports.

Importantly, a correction in employment numbers for August 2023 has revealed further declines. Initially, reports stated that restaurants had added 14,400 jobs. Unfortunately, the corrected number showed that restaurants shed 9,300 positions.

However, context is important. Notably, the unemployment rate in the US has remained under four percent for nearly 24 months. As of the latest reporting by the US Bureau of Labor Statistics, unemployment is at 3.9 percent.

Numbers by Restaurant Category

The data in this subsection comes from the National Restaurant Association. As the NRA notes, this information is based on data from September 2023.

These numbers should provide further context for restaurant and bar’s current situation. Some restaurant categories are struggling more than others to reach or surpass pre-pandemic levels of employment.

Below, employments numbers for September 2023 in comparison to February 2020.

Full-service: -214,000 jobs
Quick-service and Fast Casual: +128,000 jobs
Bars and Taverns: +50,000 jobs
Cafeterias and Buffets: -36,600 jobs
Catering and Mobile Food Service: +14,900
Snack and Non-alcohol Beverage Bars: +107,000 jobs
Foodservice Contractors: +15,100 jobs

As you can see, full-service restaurants are struggling the most to reach pre-pandemic employment numbers. However, QSRs and bars have surpassed that milestone.

By the Numbers

Below, the change in employment in each state and Washington, DC. The time period the data span runs from September 2019 to September 2023*.

Alabama: -5,700 (-3.4%)
Alaska: +100 (+0.4%)
Arizona: +18,200 (+7.6%)
Arkansas: +7,900 (+8.1%)
California: +32,700 (+2.2%)
Colorado: +9,100 (+3.8%)
Connecticut: -1,200 (-1.0%)
Delaware: +2,500 (+6.4%)
District of Columbia: -2,500 (-4.5%)
Florida: +35,200 (+4.4%)
Georgia: +21,800 (+5.5%)
Hawaii: -4,900 (-6.9%)
Idaho: +7,000 (+11.5%)
Illinois: -11,000 (-2.3%)
Indiana: +7,900 (+3.2%)
Iowa: -200 (-0.2%)
Kansas: +4,800 (+4.7%)
Kentucky: -400 (-0.2%)
Louisiana: -9,000 (-5.2%)
Maine: -4,000 (-7.9%)
Maryland: -16,700 (-8.0%)
Massachusetts: -15,600 (-5.6%)
Michigan: -21,400 (-6.3%)
Minnesota: -9,000 (-5.2%)
Mississippi: -1,700 (-1.7%)
Missouri: -3,500 (-1.5%)
Montana: +4,500 (+10.7%)
Nebraska: +600 (+0.8%)
Nevada: +22,300 (+16.7%)
New Hampshire: -1,500 (-2.9%)
New Jersey: +7,400 (+2.7%)
New Mexico: +3,100 (+4.2%)
New York: -10,000 (-1.4%)
North Carolina: +12,900 (+3.3%)
North Dakota: -100 (-0.3%)
Ohio: -6,300 (-1.4%)
Oklahoma: +3,600 (+2.5%)
Oregon: -2,000 (-1.2%)
Pennsylvania: -5,600 (-1.3%)
Rhode Island: -2,000 (-4.3%)
South Carolina: +1,000 (+0.5%)
South Dakota: +3,100 (+9.4%)
Tennessee: +8,000 (+3.0%)
Texas: +74,200 (+6.6%)
Utah: +12,900 (+12.0%)
Vermont: -1,000 (-4.7%)
Virginia: -100 (-0.0%)
Washington: +3,900 (+1.5%)
West Virginia: -2,600 (-4.6%)
Wisconsin: -8,100 (-3.8%)
Wyoming: -100 (-0.5%)

Ups and Downs

First, the less-positive news: restaurant employment is below pre-pandemic levels in more than half of the country. Including Washington, DC, 27 states are still lagging behind September 2019.

However, in some cases the change is negligible.

For example, Wyoming is down just 0.5 percent, and Virginia is down just 100 jobs or 0.00033 percent. Of the 27 states seeing declines, 20 are down less than five percent in comparison to September 2019.

Of course, it’s important to note that Hawaii, Michigan, and Massachusetts are down more than five percent.

So, to the good news. Two dozen states are enjoying restaurant and bar employment above September 2019 levels.

Four states are up more than ten percent. Nevada is leading the way, up 16.7 percent. Next is Utah, up 12 percent. Following in third is Idaho, up 11.5 percent.

Takeaways

Restaurant employment’s pre-pandemic peak was in February 2020. As of the most-current data, we’re down 14,000 jobs.

According to the most recent data, restaurants and bars employ 12.32 million people in the US. While we have yet to reach the 12.34 million that were employed in February 2020, we’re not far off. We still have reason to be positive about recovery.

The larger threat looming over operators is rising costs. Additionally, depending on the source, a recession is either a possible or current threat.

Of course, there’s still increasing demand from consumers to gather at restaurants and bars. So, again, there’s reason to remain positive.

This is all to say that numbers without deeper understanding and nuance only provide surface context. They can make us panic or breathe a sigh of relief, seemingly at the drop of a hat. We can either worry that we haven’t reached the pre-pandemic milestone, be positive that we’ll reach that number in the near future, or decide that perhaps that metric shouldn’t be the primary one by which we measure recovery.

In short, operators positioning themselves for long-term success understand their market, their teams, and their guests; focus on staff and guest retention; develop community engagement and support; and have strategic clarity.

*Sources: US Bureau of Labor Statistics, National Restaurant Association

Image: Tim Mossholder on Unsplash

May 26, 2023by David Klemt David Klemt No Comments

Raise the Bar: The 3 Ps of Hospitality

Raise the Bar: The 3 Ps of Hospitality

by David Klemt

No, one isn’t “pineapples.”

Nightlife, bar, and cocktail experts Mia Mastroianni, Phil Wills, and Art Sutley want operators to focus on what they call “the Three Ps.”

The engaging trio shared their trio of Ps recently in Las Vegas at the 2023 Bar & Restaurant Expo.

So, what are the Three Ps of hospitality? People, Place, and Product. Operators who pull the threads tighter on each of these crucial elements will be well on their way to improving operations and the guest experience.

People

Remember all the way back to a week ago when I shared Mastroianni, Wills, and Sutley’s thoughts on service versus hospitality? Consider the first P a deeper dive into that topic.

Operators need to focus on two categories of people who help their businesses succeed: their teams and their guests.

Addressing the former, the trio feels that operators are centering a disproportionate amount of their attention on guests in comparison to staff.

“We’re not lacking for people who want to work in the business and are outperforming other industries, but we’re not focusing on staff like we focus on guests,” says Wills. “Treat everyone with respect, including through the hiring process. If you don’t engage your staff, you won’t retain them. You need to show them they can grow in your business.”

According to Sutley, 89 percent of operators say that labor costs present a “significant challenge.” It follows, then, that committing to treating staff with respect and nurturing their careers isn’t just the right thing to do, it’s smart business.

Look for people with passion, those you can motivate to go above and beyond so you’re not stuck with a team full of space-fillers who are just after a paycheck, suggests Mastroianni.

Of course, operators and their teams must also focus on providing exceptional service and experiences to guests.

“Treat ever guest like a pearl in an oyster,” advises Wills. “They’re the pearl, we’re the oyster. We need to ‘protect’ them.” Anything less, cautions Sutley, and guests won’t return.

Place

Interestingly, the trio touched on design, aesthetic, and vibe. However, that isn’t the crux of the second P.

Rather, Place is really goes back to the guest experience. The design, aesthetic, and vibe need to meet guest expectations.

“Make sure your space is what it’s supposed to be,” says Wills.

For example, if a concept presents itself as a high-end cocktail bar, the four walls need to deliver on that expectation. With the exception of a handful of high-level examples, an upscale bar won’t survive if they deliver a dive bar—not neighborhood bar, dive bar—vibe and service. (For the record, I love a dive bar. But I don’t expect to encounter TV trope-style dive bar service if I walk through the doors of a high-end cocktail bar.)

One way operators can ensure their space is what it should be is standardization. Once a concept goes from idea to brick and mortar, when the owner’s vision is realized, the team needs to deliver a matching experience. Steps of service, systems, procedures…standardization is the name of the service game.

“Standardize your opening, shift, and closing procedures and systems to maintain your place,” says Mastroianni.

Every team member—front of house, back of house, leadership—needs to know and buy into an operator’s standards.

Product

Standardization breeds consistency. And consistency is a key element of the third P, Product.

Per Sutley, 76 percent of operators have noticed that guests are opting for more premium drinks. That’s great news, but it’s not the whole story.

It’s great that guests are opting for more expensive drink options. After all, that can certainly help the bottom line.

“However,” cautions Mastroianni, “they won’t come back without consistency in production.”

To drive this point home, consider this story from Mastroianni. A bartender made her a drink, and it was pretty good. She ordered another one from the same bartender and watched him make it differently the second time around. Not only was this second version different, it was better. While one could view this story through a positive lens—the drink was even better the next time!—that’s not the correct takeaway.

If the bartender was committed to building cocktails consistently, the second version of that cocktail would’ve been the first one served to Mastroianni. It would be the best version, and it would always be that impressive version.

When we’re fighting the possibility that up to 70 percent of first-time guests never return, the importance of product consistency can’t be overstated.

“Really focus on the small details to affect big change and get guests through the doors and keep coming back,” says Wills.

Image: Aleksandar Pasaric on Pexels

May 18, 2023by David Klemt David Klemt No Comments

SevenRooms and Marriott Partnership

SevenRooms and Marriott Reveal Global Partnership

by David Klemt

Fresh from launching the innovative Pre-Shift pre-service tool, SevenRooms today announces the platform’s latest partnership.

The announcement, which you can read in its entirety below, shows the confidence that some of the most recognizable hospitality brands in the world have in SevenRooms capabilities.

Specifically, the platform is now a preferred restaurant technology provider throughout Marriott International‘s portfolio. In fact, Marriott is leveraging the SevenRooms suite of tech solutions at several of their brands in more than a dozen countries. This translates to over 8,500 properties using the platform’s powerful booking, relationship management, and marketing tools.

Among the brands utilizing SevenRooms tools are The Ritz-Carlton, JW Marriott, EDITION Hotels, The Luxury Collection, and W Hotels.

The latest news to come from SevenRooms again underscores the platform’s commitment to growth and longevity. After more than a decade in operation and service to hospitality operators, it’s safe to say the company has reached ubiquity.

You may not operate a hotel or operate within a hotel. You may not oversee a multi-unit or multi-concept business. This news should be no less important to you.

When developing your tech stack (a service KRG Hospitality provides) it’s important to choose platforms that are here to stay. Otherwise, your investments of time and money go up in smoke. Likewise, the disruption to operations and service as you seek a new platform are harmful to you, your team, and guests.

So, it can be wise to not just dig into the platforms you’re considering, it can be smart to see what companies trust them as partners.

SevenRooms is a platform that we’re comfortable recommending to many of our clients. And no, we’re not paid or otherwise compensated to do so.

To learn more about SevenRooms partnering with Marriott International, see below.

SEVENROOMS SELECTED AS A MARRIOTT INTERNATIONAL PREFERRED RESTAURANT TECHNOLOGY PROVIDER

The global technology platform will power personalized guest experiences to increase revenue while providing deeper guest insights for the global hospitality company

NEW YORK (May 18, 2023) – SevenRooms, a guest experience and retention platform for the hospitality industry, today announced its agreement with Marriott International to become a preferred restaurant technology provider. SevenRooms is currently live across 25 countries at Marriott brands including W Hotels, The Ritz-Carlton, St. Regis, Sheraton, JW Marriott, Le Méridien, Westin, Marriott Hotels, Renaissance Hotels, EDITION Hotels, The Luxury Collection and Gaylord Hotels. This will unlock additional opportunities at the more than 8,500 Marriott International properties worldwide.

SevenRooms is a data-driven guest experience and retention platform focused 100% on building operator-focused tools. The platform offers solutions to global brands that not only increase revenue generation, but help them build long-term relationships with guests.

For restaurants, bars, and other F&B outlets in Marriott-branded hotels, the SevenRooms platform offers a suite of tools to help drive incremental revenue, increase operational efficiencies, and offer exceptional guest experiences. Through SevenRooms’ Customer Relationship Management (CRM) and Marketing Automation capabilities, Marriott’s hotels are not only able to cultivate meaningful, direct relationships with guests, but access a 360-degree view into the guest journey to foster deeper guest loyalty.

“We’re thrilled to collaborate with Marriott International as a preferred restaurant technology provider, helping them deliver more personalized experiences for their guests around the world,” said Joel Montaniel, CEO & Co-Founder of SevenRooms. “Today, consumers expect more out of their F&B experiences whether they’re staying local or traveling abroad. They want to engage with hotels, restaurants and bars on their own terms, and are increasingly discovering and booking where to eat and drink across an array of channels. With SevenRooms, operators have access to tools that help them reach these guests while driving operational efficiencies by connecting F&B into their overall hotel strategy to generate revenue and increase profitability. Our suite of products not only helps operators of Marriott-branded hotels provide guests with exceptional experiences that enhance positive sentiment and drive increased loyalty, but enables them to do so at scale, automatically. We look forward to working with Marriott as we enable them with technology to build longer-lasting, more profitable relationships with their guests.”

Marriott International properties can now incorporate much of SevenRooms’ suite of tools and solutions, including Customer Relationship Management (CRM), on-premise table management, waitlist management, marketing automation, email marketing, order management and review aggregation.

“Marriott’s hospitality roots began in restaurants, and we want to provide exceptional, unforgettable restaurant experiences for our guests,” said Matthew Von Ertfelda, Senior Vice President, Food & Beverage at Marriott International. “With SevenRooms, we’re not only able to provide guests with the experiences they crave, but we can leverage a robust suite of tools to help turn one-time guests into lifelong guests.”

To learn more about SevenRooms, please visit www.sevenrooms.com.

About SevenRooms

SevenRooms is a guest experience and retention platform that helps hospitality operators create exceptional experiences that drive revenue and repeat business. Trusted by thousands of hospitality operators around the world, SevenRooms powers tens of millions of guest experiences each month across both on- and off-premises. From neighborhood restaurants and bars to international, multi-concept hospitality groups, SevenRooms is transforming the industry by empowering operators to take back control of their businesses to build direct guest relationships, deliver exceptional experiences and drive more visits and orders, more often. The full suite of products includes reservation, waitlist and table management, online ordering, mobile order & pay, review aggregation, email marketing and marketing automation. Founded in 2011 and venture-backed by Amazon, Comcast Ventures, PSG and Highgate Ventures, SevenRooms has dining, hotel F&B, nightlife and entertainment clients globally, including: Marriott International, MGM Resorts International, Mandarin Oriental Hotel Group, The Cosmopolitan of Las Vegas, Wynn Resorts, Jumeirah Group, Hard Rock Hotels & Resorts, Wolfgang Puck, Michael Mina, Bloomin’ Brands, Giordano’s, Australian Venue Company, Altamarea Group, AELTC, The Wolseley Hospitality Group, Dishoom, Live Nation and Topgolf. www.sevenrooms.com

Image: SevenRooms

May 10, 2023by David Klemt David Klemt No Comments

Ovation Reveals 5 Secrets for Growth

Ovation Reveals 5 Secrets for Growth

by David Klemt

Restaurant guest feedback platform Ovation CEO Zack Oates reveals five secrets to what he calls the “digital table touch.”

The company touts itself as the number-one guest feedback platform. Ease of use is one reason the Ovation is viewed so favorably. Guests receive a two-question survey via SMS. Operators receive honest feedback they can use to improve guest retention and loyalty.

Those curious in learning more about the platform can check out several case studies on the Ovation website. Odds are, one of these studies matches closely with an operator’s own business.

For the purposes of this article, I’m going to focus on Oates’ 2023 Bar & Restaurant Expo education session. Getting even more granular, I’m going to drill down to Oates’ digital table touch approach to guest feedback and retention.

If Oates’ startling claim about first-time guests is true, guest retention is even more difficult than many operators would think. According to Oates, 70 percent of first-time guests don’t return to a restaurant. That number is, simply put, too damn high. Fifty percent is too high.

Feedback Reality

Let’s be honest about in-person feedback. While there are some honest guests out there, for some reason people tend to leave without being honest during their visits. In the moment, most of us will say “great” or “very good” when asked by a server or manager about our restaurant experience.

This is a compelling phenomenon. Per Oates, 15 percent of dine-in orders have issues. And yet most guests won’t say about an issue during their visit. That rate doubles to 30 percent for delivery orders, by the way.

Being totally transparent, Oates says he behaves the same in restaurants. He’s the CEO of a restaurant feedback platform and he’ll still say everything is fine during a visit even when it isn’t. So, while physical table touches are important, they’re likely not giving an operator an accurate picture of what’s going on in their dining room.

In fact, Oates says rather bluntly that “table touches are out of touch.” Further, they’re not scalable, off-premises, honest, or capable of fixing root issues, in his opinion.

Likewise, long-form surveys. According to Oates, long feedback surveys have an abysmal take rate: 0.01 percent. At that point, the rate may as well be zero. Online reviews, as may operators likely know, don’t really represent most guests.

The best solution to secure honest, actionable feedback appears to be Ovation’s SMS-based process.

Secret #1: Make Measurement Frictionless

Hot take: The easier a thing is to do, the more people will participate.

So, operators who want collect valuable guest feedback need to make it simple. If a guest orders delivery, operators should stuff carryout bags and top boxes with a call to action. For in-person dining, they should add a feedback CTA to table toppers. QR codes can make the process very easy. CTAs need to be visible and simple to complete.

The winning formula seems to be a two-question survey and collecting guest data. So, operators should consider enrolling guests who participate and leave feedback in a $100 gift card draw (or something similar).

Secret #2: Drive 5-star Reviews

Oates says that operators should push guests to rate their experiences on review sites. Doing so not only results in collecting valuable feedback, it can boost reviews and increase a restaurant’s visibility. The more discoverable a restaurant is, the more traffic it can potentially see.

Also, a note on actual five-star reviews: that’s not the best score. People tend to distrust perfect scores and one-star reviews. Per Oates, the best score is 4.7 stars, and operators should aim for at least a 4.0.

Secret #3: Respond to Feedback

This means good and bad feedback, and in a timely manner. Per Oates, one bad review reaches 30 potential guests. So, it’s best to address the situation as quickly as possible—if an operator can do so without losing their cool.

To ensure that emotions don’t prevail over rational responses, follow the Three Cs of Bad Review Recovery:

Collected.
Compassionate.
Call to action.

Remember, people want to feel important. When they leave a bad review the underlying feeling driving the review is likely a sense that they’ve been disrespected. Operators attempting to recover from a bad review need to make the reviewer feel acknowledged and important.

Secret #4: Discover and Act on Trends

A business term that has been making the rounds for years now is “kaizen.” This is the concept of everyone in an organization working toward making incremental improvements to the business.

Savvy operators will set aside their egos, find trends within the feedback they receive, and work to improve on any shortcomings.

Secret #5: Text Guests to Bring Them Back

As I’ve said before, if you really want to meet guests where they are, reach them on the phones in their pockets. However, Oates has more advice than simply, “Text them surveys.”

To boost participation, tempt guests with an offer. Oates says to make the offer a good one. So, operators should consider the following:

Come up with an offer and put it first.
Make it a good offer: “The first X amount of people to complete this survey will receive 15 percent off their next visit.”
Track participation via a link.

While operators can leverage each of the above secrets on their own, Ovation’s digital table touch process is seamless and easy to implement. Either way, collecting honest guest feedback and acting on it is one of the most effective methods for improving guest retention.

Image: Jon Tyson on Unsplash

June 14, 2021by David Klemt David Klemt No Comments

Guest Journey: Acquire, Engage, Retain

Guest Journey: Acquire, Engage, Retain

by David Klemt

What if you could change your operational mindset for the better in the time it takes to enjoy a cup of coffee?

SevenRooms is confident they can help you do exactly that.

The SevenRooms Coffee Break series tackles one important operational element per 20-minute webinar.

Time for a Coffee Break?

It’s no secret that we’re fans of SevenRooms here at KRG Hospitality. In addition to supporting the actual platform, we’re always eager to share their data-driven reports and insights.

CEO Joel Montaniel is the guest on episode 24 of our Bar Hacks podcast. (You can—and should—listen to the episode on Spotify, Apple Podcasts, or wherever you listen to podcasts.)

Given how much SevenRooms values collecting and sharing data that can improve operations industry-wide, it’s not a surprise that they also offer informative webinars.

So far, there are three webinars in the Coffee Break series. And, of course, each shares a way that operators can improve their business.

That’s certainly welcome as we emerge from stay-at-home orders, ease restrictions, and welcome more guests.

The current entries focus on what SevenRooms is dubbing the Restaurant Renaissance. As Doug Radkey, president of KRG Hospitality says, we can take two paths leading to the post-pandemic world.

One, we can recognize that the industry needs an overhaul, making improvements for operators, workers and guests.

Two, we can learn nothing, do nothing, and watch the industry collapse.

Restaurant Renaissance

Call it what you prefer: the Restaurant Renaissance. The New Roaring Twenties. Re-emergence. The New Normal. The Post-pandemic World.

Sure, it’s cool to have a catchy label to slap onto unique eras. It’s better to have a clear plan and path for moving forward.

To that end, SevenRooms identifies four key factors driving what they’re calling the Restaurant Renaissance:

Vaccines
Warmer weather
Pent-up consumer demand
Restrictions lifting

Alexa Detzi, director of Enterprise Success at SevenRooms, addresses these elements in the first Coffee Break webinar, “Acquire.”

We’ve said many times that operators need to prepare for an explosion in consumer demand and guest traffic. In addition, we’ve made it clear that we’ll most likely experience a severe drop-off in traffic after the initial demand wanes.

Of course, there are several ways things might play out in the New Normal. However, huge traffic in many markets followed by a drop makes the most sense.

Get Ready

The first three SevenRooms Coffee Break webinars focus on the guest journey:

I highly recommend signing up and watching each webinar, sooner rather than later. Guests are already being subjected to a cacophony of marketing overtures—you need to cut through the noise.

We Want to Help You

Like SevenRooms, KRG Hospitality is dedicated to helping operators.

If you’re seeking to open a new business, whether your first venue or an expansion, should also download our 2021 Restaurant Start-up Cost Guide & Checklist.

And for operators looking more direct and guided assistance for improving your business, we also offer KRG Mindset.

Next time you have 15 or 20 minutes to yourself, check out our Solutions and Resources pages, reach out, and let’s set up your Roadmap to Success.

Image: Garrhet Sampson on Unsplash