My blog from 2012

What Hospital Administrators Can Learn from the Hotel Industry

Posted on November 15, 2012

by Gregory Gorgone, CDM, CFPP

Welcome to the days one can go to their favorite fast food restaurant and eat a fresh salad, to the day when you can go to the local grocery store and pick up fresh roasted meats and freshly baked breads, when you can enjoy a meal in one of dozens of nationally branded restaurants that are clean and have stylish interiors or when you can go to a local hotel or resort and enjoy have a wonderful dining experience.

At a time when there are is such a variety of options for great food and pleasant dining experiences, why is it that when you walk into a typical hospital cafeteria you feel as if you have walked into a time warp of 30 years ago? Worse still, is to be admitted to the hospital as a patient, knowing among the many other stresses you face, you can look forward to a tray of bland, overcooked and poorly presented food.

So why is it in a time when the Food Network is one of the most popular channels on TV, hospital food continues to be the butt of so many jokes? Why is hospital food so poor and why is it that it seems to be accepted as “the way it is”? Why does it take the mayor of New York City to introduce a law to improve food in public and private hospitals? Can you imagine what it would be like to go out to eat if the restaurant industry never changed their menus, service styles or interior designs? Can you imagine if hotels, resorts, quick serve restaurants, full serve restaurants and grocery stores did not step up to meet the changing expectations of their customers? They would go out of business.

But not so for a hospital cafeteria. Food service departments in a hospital are often looked at as only a support department to the main game which is medical treatment of in-patients and out-patients. Fair enough.

Medical care is the reason hospitals exist and clearly this is the correct priority and the leaders in the hospital world have their priorities straight investing in doctors, nurses, equipment and new ORs and EDs, but they are also leaving money on the table. Instead of a line item expense, the food and beverage service in a hospital can become not only a income center, but also, a marketing tool of good will and buzz in the larger community.

Back in the days when Holiday Inns were along every highway and new Marriott hotels were being built in urban areas, the main game was guest rooms. Selling a room for the night was where the profit was. “Heads in the bed” was the focus of their business. Oh, and by the way, we have a coffee shop downstairs in case you are hungry. Food and beverage departments in the hotel business were viewed as an amenity to support more heads in the beds. And their restaurants and cafés were boring and most of their guests left the building to find a place to eat. The hotel concierge knew all the best places to dine as they looked down their noses at the hotel coffee shop. After all, the food and beverage department was just a support department of the hotel. A breakeven activity at best.

As construction costs climbed higher and higher to build hotels, every square inch of the design was looked at carefully. The pressure was on for hotel restaurants to not only pay for themselves, but to pay back the costs to the space they operated in. Now F&B Managers and Chefs had to drive business into their restaurants. Now excellent food and service was the buzz. The game was not only to attract their own hotel guests to their dining rooms, but to reach out to the local community and invite them over for a great meal.

Instead of being a line item expense on the hotel’s P&L statements, Food and Beverage Departments were becoming profit centers and it was expected for them to run in the black. Today, some of the best restaurants in the country operate out of hotels and resorts. The best culinary students are being recruited out of school and now work in the hotels and resorts across the US. Hotel’s now fill guest rooms with the promise of new culinary adventures delivered right to their room or in one of their stylish top rated restaurants on the 25th floor overlooking the town.

The majority of income and profit still come from hotel rooms being filled, but now food and beverage departments are part of their marketing plans to fill those rooms. Their cafés and restaurants pull in local business creating an even better reputation for the hotel. When the locals are asked what hotel to stay in, they tell their family and friends about the great local hotel that serves excellent food and delivers great service.

As we come forward to the year 2012, we see hospitals struggling with their income and profits (surplus). We see budgets getting tighter every quarter. Construction costs are even higher. Meanwhile, the food in the café is mediocre at best, the food served on plastic trays to patients goes uneaten, food costs are too high, the cooks and servers in the nutritional support department do not know they are really a food and beverage department.

Very few hospitals have trained chefs to run their kitchen and develop menus.

The solution is rather an easy one.

It is time for hospitals to stop looking at their nutritional support departments as a line item expense and start looking at them for what they can be; a financially viable Food and Beverage Department with the purpose of delivering high quality food to their patients and serving great food in their cafes to their staff and visitors.

The action plan is as follows:

1- Hire a professional food and beverage consulting firm with vast experience in healthcare.

2- Change the name of their nutritional support department to the Food and Beverage Department.

3- Hire a trained, experienced Chef for the department.

4- Revise and update the goals and objectives for the department that include patient food satisfaction of 90% or better and a café with the reputation as one of the best and healthiest restaurants in the area for lunch.

5- Have a full departmental assessment completed by a professional consulting firm who can propose an investment in the department with a 5 year ROI that is FTE neutral in meals served per man hour.

6- Put a plan in place to turn the department into a revenue center.

7 - Train the management team and the staff to be culinary driven professionals delivering high quality nutritious meals to all their patients and to their café customers.