"Efficiency↑ Cost↓"... The 'F&B Outsourcing' Trend Sweeping the Hotel Industry

In the hotel industry, more places are opting to bring in well-known franchise F&B outlets instead of operating their own directly managed food and beverage (F&B) establishments. This approach not only provides rental income and reduces labor costs but also benefits from the 'customer attraction effect' as customers visit the popular franchise stores. This trend is particularly active in the outskirts of the metropolitan area, where foot traffic is lower compared to Seoul, and among business hotels with relatively lighter service burdens.

Exterior view of the 'Blue Bottle' store at the RYSE Autograph Collection Hotel, which opened last March. [Photo by RYSE Autograph Collection Hotel]

원본보기 아이콘

According to industry sources on the 22nd, Sheraton Grand Incheon Hotel plans to relocate its directly operated bar ‘Bene’ from the lobby floor to the second floor in August and open a Starbucks in the vacated space. The first-floor ‘B-Flat Garden,’ previously an outdoor restaurant, will also be transformed into a terrace space for Starbucks customers.

A representative from Sheraton Grand Incheon Hotel said, "The introduction of Starbucks is expected not only to reduce labor costs but also to enliven the hotel lobby floor due to the influx of cafe customers," adding, "We are also preparing various joint promotions with Starbucks and considering events for our guests."

Some hotels are aiming to shed their typical ‘old’ image and target a ‘young’ vibe. The RYSE Autograph Collection Hotel, famous for attracting the MZ generation (Millennials + Generation Z), has housed the popular Tartine Bakery, well-known on social media, in its lobby since its opening, effectively drawing a large number of passersby from nearby Hongdae. Since March, it has also been operating a pop-up cafe of the American coffee brand Blue Bottle, popular among young people.

원본보기 아이콘

Jeju Shinhwa World Hotel operates franchise outlets such as Starbucks, H?agen-Dazs, and Dunkin' Donuts on the ‘M Lounge Floor,’ a space connecting four hotel towers and featuring a shopping street. The Starbucks located here is the only Reserve store in Jeju City, significantly contributing to the hotel's customer attraction, according to hotel officials. By the end of this year, a handmade hamburger restaurant is also set to open, as Jeju Shinhwa World Hotel continues to expand its outsourced F&B outlets.

Experts cite labor costs and management risks as key factors driving the outsourcing of F&B in the hotel industry. Professor Yoon Tae-hwan of Dong-Eui University’s Department of Hotel and Convention Management said, "Except for five-star hotels that require strict quality control, outsourcing F&B is an attractive option for other hotels to minimize management risks," adding, "Recently, as the food quality of franchise F&B outlets has improved, negative perceptions of outsourcing have greatly diminished, leading more hotels to entrust their food and beverage operations to external companies."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.