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10/25/2017

Exploring the Hospitality Industry

CHAPTER

Exploring the Hospitality Industry, 3e John R. Walker

THIRD EDITION

Restaurants

Exploring the Hospitality Industry, 3e John R. Walker

Learning Objectives

 Describe the different characteristics of chain and independent restaurants

 Classifications of restaurants

 Describe characteristics of the restaurant market

 Sustainability in the restaurant industry

Exploring the Hospitality Industry, 3e John R. Walker

• The restaurant Industry 2017:

• https://www.youtube.com/watch?v=iUyFJOXpSoI

• What is hot in 2017:

• http://www.restaurant.org/News- Research/Research/What-s-Hot

• Oregon:

• http://www.restaurant.org/Downloads/PDFs/State- Statistics/2016/OR_Restaurants2016

• Restaurant Industry Sales:

• http://www.restaurant.org/Restaurant/media/Restaur ant/SiteImages/News%20and%20Research/Industry %20dashboard/Annual-sales-for-Dashboard-2016.jpg

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Origins

• First restaurant believed to have originated in 1765 when Monsieur Boulanger created the first European restaurant in Paris.

• The word restaurant comes from the French word (restaurer) meaning to restore.

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Origins Credit: ariadna de raadt/Shutterstock

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Basics

• Restaurants are a vital part of our lifestyle.

• The restaurant industry employs over 13 million people and is a multi-billion dollar business.

• As a society, we spend over 50% of our food dollar in restaurants.

https://www.youtube.com/watch?v=iUyFJOXpSoI

http://www.restaurant.org/News-Research/Research/What-s-Hot

http://www.restaurant.org/Downloads/PDFs/State-Statistics/2016/OR_Restaurants2016

http://www.restaurant.org/Restaurant/media/Restaurant/SiteImages/News and Research/Industry dashboard/Annual-sales-for-Dashboard-2016.jpg

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Exploring the Hospitality Industry, 3e John R. Walker

Restaurants

• The most popular meal eaten away from home is lunch, accounting for nearly 50% of fast food restaurant sales.

• The typical day in the U.S. sees nearly 130 million people in restaurants.

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Classifications

• Two main categories of restaurants

 Independent (indies)

 Chain

• By type of service:

 Fine dining

 Fast casual

 Casual dining

 Quick service (QSR)

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Classification by ownership: Independent

• Typically owned by one or more owners

 Owners are involved in the day to day

operations.

• Restaurants are not affiliated with a national brand or name.

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Classification: Independent

• Benefits to Independent Ownership

 Independence

 Creativity

 Flexibility

• Possible Risks of Independent Ownership

 Potential for failure

 Lack of expertise

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Classification: Chain

• Groups of restaurants that are identical in:

 Market

 Concept

 Design

 Service

 Food

 Name

Exploring the Hospitality Industry, 3e John R. Walker

The founders of Outback Steakhouse, a pioneer in the steak house sector of the restaurant business, have proved that unconventional methods can lead to profitable results. Credit: John Walker

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Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Classification: Chain

• Each restaurant offers the same:

 Menu

 Food quality

 Level of service

 Atmosphere

• Chain restaurants can be franchised or company owned.

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Classification: Franchise

• A major driving force in the restaurant industry

• Allows for rapid expansion

• Primarily affiliated with chains

Exploring the Hospitality Industry, 3e John R. Walker

Restaurant Classification: Franchise

• Benefits of franchising:

 Proven concept

 Less likelihood of failure

• Potential drawbacks of franchising:

 High initial investment (franchise fee)

 Construction costs

 Annual royalty payments

 Charge for marketing and advertising

Exploring the Hospitality Industry, 3e John R. Walker

The People in the restaurant business!

• Employee engagement:

• https://pos.toasttab.com/blog/10-best- ted-talks-every-restaurant-owner- should-watch

Exploring the Hospitality Industry, 3e John R. Walker

Fine Dining Restaurants

• Typically independently owned

 Operated by entrepreneur or

partnership

• Good selection of menu items offered

 Often 15 or more entrées

• Almost always made from scratch on premises with raw or fresh ingredients

Exploring the Hospitality Industry, 3e John R. Walker

Fine Dining Restaurants

• Restaurants may also be categorized by:

 Price

 Décor/atmosphere

 Level of formality

 Menu

https://pos.toasttab.com/blog/10-best-ted-talks-every-restaurant-owner-should-watch

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Exploring the Hospitality Industry, 3e John R. Walker

Fine Dining Restaurants

• Levels of service are generally high.

 Greeters welcome and seat guests

 Captains and servers advise guest of special items

 Sommelier provides wine service

• Décor is consistent with the overall ambience of the restaurant.

Exploring the Hospitality Industry, 3e John R. Walker

Types of Fine Dining Restaurants

• Several types of restaurants are included in the fine dining segment:

 Upscale steak houses

 A few ethnic restaurants

 Celebrity chef-owned restaurants

Exploring the Hospitality Industry, 3e John R. Walker

Theme Restaurants

• Often a combination of a sophisticated specialty restaurant and several other types of restaurants

• Generally serve a limited menu

• Popular themes include:

 Nostalgia (i.e. 1950's)

 Dinner house (i.e. TGI Friday's)

Exploring the Hospitality Industry, 3e John R. Walker

A vintage car and other memorabilia create the theme at this restaurant. Credit: Chris Stowers/Dorling Kindersley, courtesy of Corvette Diner

Exploring the Hospitality Industry, 3e John R. Walker

Celebrity Restaurants

• Growing in popularity

• Often have an extra "zing" combining

 Design

 Atmosphere

 Food

 Chance to see the celebrity owner

• Owners may be chef's, Hollywood stars, athletes, etc.

Exploring the Hospitality Industry, 3e John R. Walker

Steak Houses

• Don't expect to see the same customers every week

• Add value by providing items such as chicken and fish to the menu

• May include buffet style operations and sit-down restaurants

 E.g. Outback Steakhouse

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Exploring the Hospitality Industry, 3e John R. Walker

Casual Dining

• More relaxed atmosphere

• Restaurants may be from several classifications

 Chain

 Independent

 Ethnic

 Theme

Exploring the Hospitality Industry, 3e John R. Walker

A casual restaurant offers guests a chance to enjoy each other’s company and good food and drinks. Credit: Dorling Kindersley

Exploring the Hospitality Industry, 3e John R. Walker

Family Restaurants

• Evolved from the coffee shop style of restaurant

• Typically located in or near easy access to the suburbs

• Informal with a simple menu

• Service designed to appeal to the family.

• The line separating concepts is blurring.

Exploring the Hospitality Industry, 3e John R. Walker

Ethnic

• Most are independently owned.

• The owners provide something different for an adventurous diner.

• Traditional ethnic restaurants grew to cater to various immigrant groups.

• The fastest growing segment of ethnic restaurants in the U.S. is Mexican.

Exploring the Hospitality Industry, 3e John R. Walker

Quick Service/Fast Food

• Consist of diverse operating facilities

• Many different types of operations are included in this category such as:

 Hamburger

 Pizza

 Chicken

 Pancakes

 Sandwich shops

 Delivery service

Exploring the Hospitality Industry, 3e John R. Walker

Quick Service/Fast Food

• This segment drives the industry.

• Offer limited menus

 Less expensive ingredients/processed foods

 Allow for low prices

• Designed for convenience

• Increased in popularity due to location strategies

• Co-branding becoming a popular strategy

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Exploring the Hospitality Industry, 3e John R. Walker

Hamburger

• McDonald's is the industry giant.

 Worldwide sales are in the billions

 Founded by Ray Kroc

 Continually introducing new menu items

 Growth strategy focuses on overseas expansion.

 50% of profits come from units outside the U.S.

Exploring the Hospitality Industry, 3e John R. Walker

Pizza

• Growing segment fueled by delivery service.

• Several chains which include:

 Pizza Hut

 Domino's

 Godfather's

 Papa John's

 Little Caesar's

Exploring the Hospitality Industry, 3e John R. Walker

Chicken

• Popular alternative to burgers

• Perceived to be healthier

• Menu items cheap and easily adaptable

• KFC is the market leader with nearly 14,000 units worldwide.

• Other chains are:

 Church's Chicken

 Popeye's

Exploring the Hospitality Industry, 3e John R. Walker

Sandwich

• Menu debuts in the sandwich segment have outpaced all others.

• Sandwiches have achieved "star" status.

• Classics such as melts and club sandwiches have returned.

• Wraps are a new twist.

• Popular way for young entrepreneurs to enter the industry

• Industry leader is Subway with more than 45,000 units worldwide.

Exploring the Hospitality Industry, 3e John R. Walker

Delivery Services

• Delivers prepared foods to customers homes

• Includes "Meals on Wheels" and urban restaurants that deliver

• Another type of delivery service offers limited menus from several restaurants allowing diners to order from multiple options

Exploring the Hospitality Industry, 3e John R. Walker

Food and Waste

• Worldwide, about one third of all food produced, worth around US$1 trillion, gets lost or wasted in food production and consumption system

• Per-capita waste by consumers is between 95 and 115 kg a year in Europe and North America, while consumers in sub-Saharan Africa, south and south-eastern Asia each throw away only 6 to 11 kg a year.

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Exploring the Hospitality Industry, 3e John R. Walker

By Klaus Pichler

Exploring the Hospitality Industry, 3e John R. Walker

Sustainable Restaurants

• The average American meal leaves a large carbon footprint.

 Food may travel over 1,500 miles to the

plate.

 Large amounts of CO2 emitted in the process.

• Restaurants are bring significant greenhouse gas emissions.

• Toogoodtogo: http://toogoodtogo.co.uk/

http://toogoodtogo.co.uk/

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Exploring the Hospitality Industry, 3e John R. Walker

Sustainable Restaurants

• Green Restaurant Certification 4.0 Standards

 Reviews restaurants in 7 categories

• Water efficiency

• Waste reduction and recycling

• Sustainable furnishings and building materials

• Sustainable food

http://www.dinegreen.com/certification- standards

Exploring the Hospitality Industry, 3e John R. Walker

• Sustainable restaurants Talk:

• https://pos.toasttab.com/blog/10-best- ted-talks-every-restaurant-owner-should- watch

• Unusual restaurants:

• https://www.youtube.com/watch?v=q1qqahqJWG0

http://www.dinegreen.com/certification-standards

https://pos.toasttab.com/blog/10-best-ted-talks-every-restaurant-owner-should-watch

https://www.youtube.com/watch?v=q1qqahqJWG0