News Feature | May 30, 2017

Restaurant And Hospitality News – May 29, 2017

Christine Kern

By Christine Kern, contributing writer

Cracker Barrel

In news this week, a new survey finds 20 percent of guest hotel experiences ruined their stays; PwC says the lodging industry outlook is positive, despite slumps; and Cracker Barrel fights slumping retail and restaurant sales.

New Survey Finds 20 Percent of Guests Say Hotel Experience Ruined Their Vacations 

In its new Hotel Pain Index, experience management company, Qualtrics, surveyed 1,000 recent hotel patrons ranking annoyances they encountered, ranging from bad nights to horror stories and found that nearly 1 in 5 guests say their hotel experience was so bad it ruined their vacation. The report also found that among top detractors were dirty rooms (66 percent) and unfriendly employees (75 percent), while top attractors were on-site restaurants (86 percent), parking (83 percent), and a pool/spa (68 percent).  WiFi access is also more important to guests than free food, though shiny lobbies and fancy restaurants are not enough to compensate for dirty rooms, unfriendly employees, or excessive noise. And 92 percent said that the business center is the least important amenities when it comes to choosing a hotel.

More than two-thirds of patrons reported that they rely on guest ratings before booking a hotel, while 35 percent of all guests feel that hotels don’t put much effort into providing a great guest experience, and the number jumps to fifty percent for one and two-star hotel guests. The study found that 61 percent of guests will not stay in a hotel that has fewer than 5 stars in an online review. And it turns out that luxury hotel guests are more susceptible to tears in the wake of a bad hotel experience, with 34 percent admitting to crying compared to 13 percent of all guests. Meanwhile, 24 percent of guests who had a bad experience wrote a negative online review of the hotel.

The report also discovered that 12 percent of guests found bodily fluids on their bedsheets, while 9 percent reported that their room was haunted.

 New PwC Report Finds Outlook Positive Despite Slow Growth In Lodging Industry

The latest update from PwC reports a positive economic outlook for the lodging industry, despite a weak first quarter GDP growth estimate of just 0.7 percent. Lodging demand also increased at the strongest quarterly rate since the Q1 2015, with the RevPAR increasing 3.4 percent, according to PwC.

Rising employment, higher real income, and increased household net worth have bolstered consumer confidence, providing this optimistic forecast. PwC does expect growth to temper through the rest of 2017, however, as Trump is anticipated to pursue a more modest agenda than initially expected.

Overall, PwC forecasts, in 2017 a shift in the supply-demand balance will lead to the first annual decline in occupancy since 2009, though a minor one. ADR growth of 2.2 percent should drive an increase in RevPAR of 2%, which would mark the slowest growth rate in almost a decade.

Cracker Barrel Feeling The Retail Markdown Blues

Cracker Barrel Old Country Store Inc. is feeling the squeeze of the retail markdowns that have become commonplace in today’s competitive marketplace, News.  Same-store retail sales dropped 4.7 percent during Q3, ending April 28. Meanwhile, their sale-store restaurant sales fell 0.4 percent in the same quarter, with traffic declining 2.1 percent. On an earnings call, Cracker Barrel executives attributed the slump to the trend of heavy discounting currently afflicting casual dining and far worse in retail sales.

“As much as we believe that discounting in the restaurant business is significant, it’s even more so in the retail industry right now,” Cracker Barrel CEO Sandra Cochran said. “I would characterize the environment as even more highly competitive.”

While most of the company’s revenue comes from food sales, the retail area does make up a sizeable portion of the business. To date in 2017, 20.3 percent of its revenue has been retail, down from 20.9 this time last year.

Cochran explained that customers have come to expect deep discounting that they often see in mall stores, and she said the company is working to “highlight value on the merchandise floor.” Cochran said that Cracker Barrel is “aggressively looking at inventory levels and, where they could, trimming them.”