What do many hotel banquet and catering programs have in common with the U.S. auto industry in the 1980s? Outside competition eroding a business model that stood for decades.


Then Toyota, Honda, Nissan, and everybody else with four wheels moved in. Does a hotel still rely on its giant ballroom as a one-size-fits-all event space? When was the last time the banquet and catering menus were updated to reflect a wider range of food choices, as well as current culinary trends?

NO JOKE
“The banquet industry has been the butt of jokes forever. If we continue to do things the exact same way we've done them in the hotel business, we’re going to see an erosion in our banquet business.”

That’s not some clairvoyant prediction from 1975. That’s a recent quote from an anonymous hotel food and beverage executive.

Some hotels have already implemented extraordinary banquet and catering programs to compete directly with outside caterers. Others are still working on it.

To keep a banquet and catering department from becoming the next Oldsmobile, look at these few reasons why some hotels may have lost revenue in this area.

BURNING RUBBER
We all know about “rubber” hotel banquet chicken, right? It’s a cliché that won’t go away for many customers. And that’s enabling restaurants, especially ones known for quality food, to take a slice of the event pie with private on-site party rooms in the 100 to 500-plus seating range.

“Unfortunately, often the expectation when going to a hotel event is that the food was cooked hours before, placed in a hot box, and then brought out to the table,” says Norma Maloney, VP, Lettuce Planet, Lettuce Entertain You Restaurants (LEYE.)

Catering companies specializing in off-site events say perceived quality of food is a primary lure when competing with hotels for business. If the food isn’t a hit, the client will go somewhere else next time.

“We constantly work on creating unique, seasonal dishes for our clients so they never see the same thing twice. We always work to stay ahead of the curve,” says Sarah Finlayson, creative services manager, Blue Plate Catering.

“The caterer is not selling a room. We're selling food. The hotels say they do that. Not all of them do,” says E. Wickey Helmick, founder, Wickey’s Caterers.

CELEBRITY CHEFS
So what gave people the idea that fresh, exciting food choices should be a deciding factor in choosing where to host a party or event?

Click on the Food Network to get an idea. The rise of the celebrity chef, and the national obsession with food in general, raised the bar more than a decade ago.

“The idea of having a chef that was a name chef, or a celebrity chef doing a party or event, was something a lot of hotels did not have available to them, although some hotels now compete in this arena,” says Maloney.

People eat in restaurants where many chefs are visible, either through an open kitchen or walking around talking to diners. It’s a humanizing association with the food that has become an essential expectation to the customer.

Our anonymous hotel food and beverage executive says this is an area hotels can address now.

“If we make our chefs accessible, in the front-of-the-house, and part of the whole dining experience, we’ll compete head-to-head with off-premise caterers with no problem.”

BALLROOM BLITZ
We have a hotel property that can accommodate any size function, from 30 people to 5,000 and up. There is a trained culinary staff that can produce exactly what’s on the menu every time, and and it has been done consistently for years. So why would a client look elsewhere to host their event?

“The popularity of off-premise catering can be attributed to clients wanting to have an event more tailored to personality and theme,” says Finlayson.

Think of a hotel’s enormous ballroom as an SUV. No matter how many partitions are put into it to accommodate smaller functions, it’s still an SUV of an event space. Not all customers want an SUV pretending to be a cozy sedan or a flashy sports car.

“Hotel banquet rooms often are designed to be pretty faceless,” says Maloney.

Lettuce Planet is an example of a cozy sedan or a sports car when it comes to event spaces. LEYE has more than 25 restaurant concepts from casual to fine dining in Chicago, Las Vegas, Atlanta, Minneapolis, Scottsdale, and Bethesda, Maryland. They are popular restaurants where many clients have eaten in the past, so there’s a familiarity and history of having a pleasant dining experience. This can be a deciding factor when it comes to choosing LEYE over a hotel.

Maloney says Lettuce Planet accounts for about 15 percent of LEYE’s total revenue. Events are no longer something “on the side” for LEYE or other restaurants. They’re big business.

“Primarily in the past 10 to 12 years, more and more restaurateurs, when they design a restaurant, automatically begin with the thought they are going to integrate private or semi-private dining space. That’s a component of the revenue stream now,” Maloney says.

DINNER WITH A T-REX
If private dining spaces at restaurants can be considered a cozy alternative for 100 to 500 people instead of a hotel banquet room, what about parties with 1,000 people or more?

The hotel ballroom isn’t a lock anymore for business in large numbers either.

Off-site catering companies like Blue Plate in Chicago give the customer venue choices a hotel would have a difficult time matching. Dinner for 1,500 at the Field Museum under the towering fossil of Sue the Tyrannosaurus Rex? How about a reception for 10,000 at the Lincoln Park Zoo?

“We do compete with hotels for business. Clients generally know when they want to break out of the hotel ballroom and try something different,” says Finlayson.

Blue Plate started in 1983. They’ve grown into a company that creates more than 6,500 events a year. And they can set up nearly anywhere, anytime, weather permitting. They have preferred status at more than 85 Chicago-area venues, and they have event planners, wedding planners, and a full culinary staff.

Blue Plate, and other companies like them around the country, could be considered a mobile version of your hotel ballroom.

(DIS)SERVICE
Another area outside companies have identified as a flat tire for hotels is the banquet staff.

“What clients often experience in a hotel venue is banquet staff that know they’re only going to make a certain amount of dollars no matter what they do, so their service level isn’t always quite as high,” Maloney says.

Helmick says a caterer can offer a team of workers tailored to a specific event, while many hotels have banquet staff that may be working more than one function that day.

“You don’t share the staff with everyone. They’re dedicated to serve you that evening. They’re yours. That’s the difference,” says Helmick.

EVOLUTION
Many hotels say they’re less expensive than outside caterers because there are no hidden costs, that everything is included when a customer signs on the dotted line.

Many caterers say they’re less expensive than hotels because the customer isn’t paying a builtin cost for the overhead and upkeep of a ballroom, or for union labor.

But clients have money to spend either way, and often the deciding factor is who can deliver the most variety and attention to detail for the price.

While restaurants and catering companies might have more flexibility to accommodate a client’s specific needs than a hotel, that doesn’t mean hotel banquet and catering programs can’t evolve to meet those challenges.

“Many hotels are working to create a hipper image when it comes to events in order to offer a unique, cutting-edge experience,” Finlayson says.

“I think you have to continue to evolve if you’re going to stay healthy in any business model. Every client you work with has to walk away feeling they are taken care of and given the attention to detail needed for their event,” Maloney says.

“Hotels have their niche, and I think offpremise caterers will always have theirs as well,” Helmick says.

Those niches will continue to be redefined in the coming years. Could we eventually see a merging of outside catering and hotel banquets as a single entity, giving the customer every choice of venue and menu available? It may sound crazy, but then again, the idea of Daimler- Chrysler or GM-Daewoo probably sounded crazy 30 years ago too.