News Feature | January 30, 2017

Restaurant And Hospitality News – January 30, 2017

Christine Kern

By Christine Kern, contributing writer


In news this week, a new report helps hoteliers understand travelers online search and booking behaviors to better capture their business; the IFA predicts a $26 billion expansion for the Franchise sector in 2017; and McDonald’s reports slumped U.S. same-store sales for Q4, despite efforts to streamline menu options and costs.

New Report Highlights Travelers’ Online Search and Booking Behaviors

TrustYou Hotel Insights’ new  "Travelers' Online Search & Booking Behaviors" reveals just how travelers are finding your hotel and what you can do to meet their demands as they go through the travel planning journey. According to the report, 91 percent of travelers utilize Google during their search process, and 71 percent of travelers use keyword searches to find accommodations and/or locations. Over half (57 percent) search for hotels, 49 search for a particular location, and 31 percent search for a combination of the two.

Additionally, a hotel’s review score is the second most important search variable when booking (hotel’s nightly rate is first), and 88 percent of travelers prefer hotels with scores of 3 or more stars, while 32 percent want hotels with 4 or more stars. The study also traced click-through on a Google’s hotel listing and found that travelers are most likely (20 percent) to click on the direct link to the hotel’s website  and are also very likely (10 percent) to click on review data provided by TrustYou.

According to the study, “Travelers’ decisions are not only influenced by the factors they are exposed to while searching and booking an accommodation, but also based on the primary sources of information derived from previous on-site experiences and post-stay feedback, including online reviews and/or recommendations from friends and family.”

The study concluded that “hoteliers must consider their presence on Google within their strategies….y optimizing a hotel’s presence on Google, more information is available that would likely drive travelers to your website and also to book direct.” Additionally, “travelers place a very high importance on hotel reviews,...therefore, increasing a hotel’s positive review count is of major importance to the success of a hotel’s online bookings.”

IFA Predicts Franchise Sector To Grow By $36 Billion In 2017

According to the International Franchise Association, the Franchise Business Economic Outlook for 2017 is positive, with the industry poised to expand by $36 billion this year through business and job additions and continued strong restaurant performance. The report projects that output by franchise businesses will reach $710 billion in 2017, a 5.3 percent increase over 2016.

Further, the study anticipates that the number of franchise establishments will grow by 1.6 percent to reach 744,437 locations, providing nearly 7.9 million jobs (a 3.3 percent increase over 2016). The sector is projected to have a gross domestic product of $426 billion, 5.2 percent over 2016 figures.

“Franchising is an American success story,” IFA president and CEO Robert Cresanti said on a conference call with reporters. “Establishments are growing faster and creating more jobs at a faster pace than the overall economy. They’re getting more sales and growth than other businesses.”

"We expect to post robust numbers this year, but these projections will depend on the overall legislative environment," says Robert Cresanti, president and CEO of the industry's largest trade group. "We have an incredible number of regulations that are just coming to roost in the industry, everything from overtime rules to the effects of Obamacare.”

"There's still a lot of digesting going on."


McDonald’s See Drop In Fourth Quarter Sales

McDonald’s reported a 1.3 percent drop in same-store sales during the fourth quarter that ended December 31, largely due to tough comparisons according to the company investor’s call. But even as U.S. quarterly same-store sales dipped, global same-store sales increased 2.7 percent and diluted earnings per share rose 10 percent, beating analysts’ expectations for the quarter.  Global same-store sales saw a 3.8 percent increase year-over-year, representing the best year for the chain since 2011.

“Throughout 2016, we worked diligently to lay the groundwork for our long-term future,” stated CEO Steve Easterbrook. “Our efforts yielded a more streamlined and focused organization that generated solid fourth quarter and full-year results.”

McDonald’s has also rolled out three versions of their iconic Big Mac, adding the Mac Jr. and Grand Mac to its original version. The sandwiches are being added for a limited time on McDonald’s national menu. “The Big Mac is a legend and a great-tasting burger with hints of pickle relish, mustard, garlic and onions,” said McDonald’s Chef Mike Haracz. “We listened to our customers who told us they wanted different ways to enjoy the one-of-a-kind Big Mac taste.  The classic combination of ingredients remains timeless and customers around the world continue to enjoy its signature taste.”

According to the Chicago Tribune, McDonald's has spent the last two years working to streamline its menu to cut costs and speed service while allowing it to better compete with "better burger" rivals like Five Guys, M Burger and Shake Shack. The new  Big Mac offerings  are designed to spur sales by providing menu flexibility without complicating work in the kitchen, especially now that all U.S. restaurants are serving breakfast all day.