Automatic functions make minibar revenue easier

This article is part one of a three-part series on managing minibars. Look to Thursday's technology newsletter for the second part.

According to a recent TripAdvisor hotel guest survey, the minibar is the least important amenity offered by hotels, but experts say guests would miss the convenience and hotels would miss the profits if it were not available.
Michael Pechlof, assistant director of food and beverage at the Four Seasons Hotel in Houston, said the minibars in his hotel are profitable. “It is a revenue generator for our hotel—it may be a constant battle to run it as a profit center and not just a convenience for the guests but that’s what we do,” he said. “It can be a loss leader because the labor needed to check and stock it makes it so.”
The Four Seasons Hotel Houston is a 468-room business hotel, primarily catering to single-night-stay guests in the oil and gas businesses. “We need to offer in the minibar whatever they would need in their short stay here,” Pechlof said. “We fulfill the basic needs of a private bar but also offer items like a 5-Hour Energy, mints and a local beer.”
The labor costs are the highest costs for hotels when having and stocking minibars, experts report. But with the introduction of minibar automation, the labor costs are cut by about 70 percent, said Pierre Agrario, VP of account management for Bartech. “Every product has a sensor so if it’s picked up for more than 60 seconds, the guest will automatically be charged for that item,” he said. “Typically only about 30 percent of hotel guests use the minibar so that cuts the labor down since staff doesn’t need to attend every room.”
Reports then can be run for hotel staff and they only need to attend to the room that the minibar was used in and with the exact item that needs to be replaced. Reports can indicate expiration dates of products so they can be removed from the minibar—again only replacing the items that need replaced.

“This really equals 30 percent more revenue. Hotels want to offer the amenity and be profitable,” Agrario said. “With automatic minibars, they can have it and make money on it.”

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Another way hotels are making minibars profitable is by outsourcing the management of the minibar. Minibar Systems North America offers a guest refreshment outsource solution that includes on-site operational management and a guaranteed monthly payment to the hotel. “We manage all the costs and have the operational responsibility of it,” said Walt Strasser, EVP at Minibar Systems North America.

Strasser said the average check for minibar items is $15 and about 30 percent of guests use the minibar. “The minibar is a completely impulse item, and at 30 percent, it has one of the highest utilization rates of anything in a hotel,” he said. “The revenue comes as a result of that impulse.”
But Christelle Pigeat, CEO and VP of sales and marketing at minibar solutions provider Mobile Simple, believes hotels aren’t making as much revenue as they could. Being able to manage special minibar requests and being able to restock accurately when the guest is staying for more than one day will have an impact on minibar sales. Specific requests, especially in luxury hotels, are common. This includes removing all alcoholic drinks or stocking the minibar with very specific items.
“Some hotels are making $1 per room per day while other are making $12 per room per day—it varies a lot,” she said. “Service delivery is key when it comes to minibars — that makes the difference in your hotel from another.”

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