Ask anyone in the hotel industry and they will tell you that the mini-bar is dead, a victim of its own arrogance, in pricing and in product. After years of charging 200-300% mark-up for things that we hoteliers told the customer that they wanted, the guest has spoken forcefully in the form of significantly reduced mini-bar revenues across our industry. But what if the conventional wisdom that is portraying the downfall of mini-bars is, in fact, not quite so “wise?”
The numbers don’t lie, mini-bar revenues are down and the guest has made it clear that this amenity is no longer as important as it once might have been. However, some visionary and perhaps more entrepreneurial hotel operators have found a way to slow and in certain cases eliminate the financial bleeding taking place and actually break even or turn a profit from their minibar programs. So what is their secret?
Like so many revenue opportunities within our assets, the answer to declining performance often resides in a place that we seem reluctant to go to; that is, with the customer. While many hotel operators have bemoaned the declining revenue stream being generated by their minibars for years, many of those same operators have done nothing to better understand what the guest would like to see in their minibar. One of the most important pieces of information to be solicited here would be the guests’ perception of the location of the minibar itself; in so many hotel rooms, it is almost as if the hotelier is playing an evil game with the guest of “see if you can find where we hid the minibar.”
The challenges of operating a minibar operation in a today’s hotels are great. The function is labor-intensive, it relies completely on the personal taste of the guest for their purchases, and the available shelf space for products is, by definition, “mini.” Knowing all of this, there may be an opportunity to improve performance here by taking a very different approach to the problem.
Historically, minibars have included soft drinks, juices, miniature bottles of liquor and wine, chips, peanuts, etc. Without the benefit of any particular research or analysis, hotel operators had assumed that guests wanted these items in their rooms to indulge their late-night snack cravings. Human nature tells us that different people have different preferences, sometimes strictly personal, sometimes driven by geography and other demographics. Despite this, our industry’s answer to these preferences has historically been to dictate to the customer what they can pay exorbitant prices for. For example, at a boutique hotel in Palo Alto, guests can purchase a fully stocked “Fresh Fridge” and can graze freely on pressed juices, salads, fruits and healthy snacks. While clearly not all hotels need to take the plunge to such a degree, it demonstrates their commitment to satisfying the needs of the health conscious customer, a demographic that frequently stays at the property and positively impacts revenue.
The challenge today, as well as the opportunity, is for hotels to come up with a mini-bar concept that does more to address the specific desires of the guest, while also being presentable within the confines of a guestroom without taking up too much space. In other words, “less is more;” a mini-bar ‘menu’ that is created with direct input from our guests, and that is designed in a way that is both presentable and economical in terms of its use of guestroom space. Creative presentation of items that we know that our guests prefer, priced rationally, can turn the negative trend in mini-bar revenues into something less offensive to our bottom lines.
For example, the years-old tradition of burying mini-bars themselves inside pieces of furniture, only to stock them with items that may or may not be appreciated by the guest, has started to change. Today, one is more likely to find actual displays of mini-bar offerings in plain sight in the guestroom, as an attempt to stimulate some interest on the part of the guest. However, simply placing items on top of furniture rather than inside it will not settle the issue. Rather, more customer feedback is required relative to the question of what products to offer. Combining more desirable, creative offerings with more proactive placement of those offerings in the guestroom space is required in order to maximize profitability of the mini-bar.
Mini-bars are just one piece of the revenue puzzle that goes along with owning and operating hotels. However, in today’s ultra-competitive hospitality marketplace, our ability to re-think and re-concept this area can reverse the downward trend that we seem to have resigned ourselves to in recent years. It is up to you as the owner or operator to challenge your team to re-imagine what a mini-bar should be, proactively soliciting feedback from guests and acting on it in a strategic manner, so guests can begin to look forward to what we have to offer, rather than using it as potentially negative Trip Advisor fodder.