Why Isn't My Hotel Pantry Turning a Healthy Profit?
By Janine Roberts Director of Sales and Marketing, Tradavo | April 29, 2012
The hotel pantry has become a standard at many select service and extended stay brands. Marriott International's highly successful "The Market" and Hilton's well planned "Suite Shop" and "Pantry Pavilion" are not only guest favorites for their quality and convenience - but a revenue generator that adds dollars to a properties Sales Per Occupied Room. Unfortunately, some of the best GM's in the country admittedly know little about retail, so what should be a small gold mine for the hotel often becomes a hard to manage, unprofitable endeavor due to a few easy-to-correct, retail industry mistakes.
As the hotel lobby concept evolves from the standard check in desk with table, flowers and uncomfortable chairs to a fully functioning, business friendly social spot, the concept of the lobby gift shop has changed as well. The hotel pantry is no longer a place to simply buy candy bars, snow globes or souvenir items. It is now an expected, and much appreciated convenience for the guest in need of a late night meal, headache relief or favorite snack. These pantries should be a tremendous asset to any hotel's Sales Per Occupied Room (SPOR), but many managers are making a hand full of retail industry mistakes that consistently cost the property the majority of their profit.
Well run, well supplied pantries - even the smallest ones - can earn as much as $5-7k per month. And in a time when occupancy rates are down dramatically, every dollar added to Sales Per Occupied Room is welcome. I have seen properties with only 5 shelves and a brand sponsored refrigerator adding over $2.50 to their SPOR from the pantry alone. I have also seen huge pantries with top of the line refrigeration adding only $.35 to that number.
So why are some pantries seeing losses month after month and scrambling to cover the cost to offer this important guest convenience? The top 3 profit pilfering mistakes are: Appearance, Price, and Shrink.
One of the most overlooked elements of the pantry is its overall appearance. Too many managers think if they have a neat pantry, products will sell, but there are important elements to consider that greatly affect the guest's perception of the pantry and their willingness to purchase from it. If you can't make a sale, you can't earn a profit.