F&B Branding is the Next Big Opportunity for Hotels

To elevate that positioning and brand recall, there's a dire need to make it a "brand" first

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By Vikram V Kamat


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For the longest time, dining out was mostly associated with a special occasion, which indicates the rarity of frequency. Now, eating out has outnumbered everything we spend on. Youth spend three times as much on restaurant visits than on any form of entertainment, including cinema, theatre, and other recreational activities, a study by Nielsen stated.

If you try and recall the last best stay experience, you would instantly remember the name of the hotel. Try the same for the restaurant you dined in the hotel, you would probably even remember what you ate and the bill amount, but not so much about the restaurant brand name.

This is where we need a bridge and treads the path of the next growth opportunity for the hotel industry. Till date, dining excellence was restricted to standalone restaurants. But even hotels must leverage the opportunity for F&B branding. Let's look at how the landscape is evolving, and the need of the hour.

Youth Leading Trends

India has more than 50per cent of its population below the age of 25 and more than 65per cent below the age of 35. This tells us how important youth are to the growth of businesses and economy and with them spending the highest on F&B; we know the hospitality industry is vying for their attention. F&B today is about lifestyle, just like exercise, yoga or movies; it's something you do regularly. Over the last decade, we have seen more acceptability in the market by consumers for trying new cuisines and formats, right from Asian fine-dine to all-organic cafés. Again, young people remained the most travelled in 2018, the basis for another study.

The Global Influence

Travelling and global exposure are leading to the emergence of new trends in India's hospitality industry. This is also the reason why domestic occupancy for all segment hotels is on an upward trend, since the well-travelled Indians and foreign tourists expect and find quality facilities across destinations.

Leveraging Pilgrimage Tourism

The hospitality industry is leveraging every possible destination in the entire landscape to establish their presence. The hotels and resorts are now emerging in Tier 2 & 3 cities from pilgrimage towns to resort destinations. As travellers seek safety and comfort on their sojourns, hotel chains have been quick to spot the demand. One example is of the pilgrimage sector. The domestic religious tourism is seeing a sharp uptick across towns such as Dwarka, Shirdi, Tirupati, Varanasi, over others. Now imagine spotting your favourite city restaurant in the hotel at these destinations, and there's an instant connect, no? We observed this even with our hotels in Dwarka, Gujarat and Trimbakeshwar, Maharashtra.

All Things "brand"

To elevate that positioning and brand recall, there's a dire need to make it a "brand" first. To make that happen, we need to establish cuisine-specific restaurants which are standard across hotels. Uniformity always has a strong recall. As an extension, we need to try different formats with the restaurants spread across locations where the target group is likely to notice and try it. It could be a standalone restaurant at a high-street, or a QSR or kiosk format in a mall. Why is this so important?

The Race for Footfalls

The luxury hotels' fine-dining restaurants and pubs are getting hit. The eateries nearby are reeling out attractive offers and promotions to get customers eyeballs. The downtrend is being seen in hotels across segments, as people are now spoiled for choice not only through mushrooming of new fine-dining restaurants but also more online delivery options. And, this has been recognized as one of the key concerns not just in India, but also in markets like Europe and the US. While the luxury industry is fighting back through tie-ups with the food delivery and restaurant discovery apps, the game is getting tougher and needs more intervention.

In most hotels, well-planned and experimental F&B operations earn revenues that equal earnings from room rates. A recent HVS-FHRAI report reveals that revenue from F&B—which includes banquets and restaurants—rose to 42.6per cent in recent years, against 36.6per cent 10 years ago, while the room revenues declined to 50.9per cent from 57.2per cent for the same period.

The indicators are on our side and imagine having the scenario if we were more branded – the pie would just be a lot bigger on our side. Thanks to the new trends of destination weddings, corporate events, and other formats which have led to the focus on making food the King.

There is a strong need for emphasis on culinary experiences, and the focus on branded dining concepts and restaurants will further help create hotels as destinations in themselves.

Vikram V Kamat

VITS Kamats Group

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