More Hotels Seeking Insights to Improve Bottom Line
Memphis Business Journal. Vol. 23, No. 49. March 29-April 4, 2002

Memphis-based Food Insights is helping hotels and resorts nationwide save
significant money by leveraging their purchasing power. The full-service market research and management consulting firm started out specializing in the multibillion-dollar food industry. The company recently announced the formation of Insights Research Group, a more comprehensive parent company under which Food Insights is the largest division.

Hotel clients make up approximately 30% of Research Insights Group's business and the company just added Ritz Carlton as a client on March 15.

“I foresee growth in the future given the experience in the industry and the clients we have,” says Judy Patton, principal and the company's market research expert. “It's clearly the market of focus.”

Food Insights helps hotel companies do everything from develop requests for proposals to negotiate vendor contracts, and the list of services in-between is expansive. The basic goal of the company is to convert data to insights in order to help a business save money.

When Best Western needed to standardize its breakfast program across the board to invoke brand loyalty, they came to Food Insights.

“We put together a breakfast program that was standard in 4,400 hotels which are all unique physically,”says Scott Hoffmire, president of Research Insights Group/Food Insights and the company's resident hospitality expert.

“We had a good, better and best approach, with them all meeting the standard requirements,” Hoffmire says. “The Best Western chain features everything from limited service to full-service properties and they needed operating procedures and standard products with a brand name image that fit with the Best Western name.”

To achieve that goal, Food Insights conducted research through focus groups with hotel owners, operators and patrons, did surveys and shared best practices among chain members. Food Insights then assembled a program implementing all these pieces of input.

After creating a program, Food Insights monitors the service through a proprietary Internet-based research tool called SatisTrack which gives the hotel feedback via the Web and e-mail.

“This allows the hotel to control the elements that are affecting its reputation,” Patton says.

Food Insights also offers business-to-business customer satisfaction measures which are not focused on the customer, but rather on the relationships between suppliers and the hotel properties.

“The corporate office wants to know that each of their hotels is satisfied with their suppliers,” Patton says. “This measure gives them a heads up before a problem reaches the consumer.”

Taking the service a step further, Food Insights measures the customer satisfaction of a service and plots it against areas in need of improvement to come up with recommendations which take into account the severity of a problem.

“For instance, there could be problems in some area, but customers are unaware, or it's just not something they care about,” Patton says. “We measure the severity of a problem and how important it is for them to fix.”

All of this adds up to cost savings for the clients by keeping supplier relationships in check so that a hotel chain does not have to undergo a costly transition; making sure processes are standardized and streamlined; and using contacts to get clients the best contract prices.

Vito Palmietto, corporate director of food and beverage for John Q. Hammons Hotels, says the proof is in his bottom line.

“Since 1996 they have helped us save approximately $7 million," Palmietto says. “I'd say Food Insights has saved us about 5% a year across the board in our purchasing program.”

Six years ago, Food Insights centralized purchasing for the chain's 64 full-service hotels.

“We facilitated the entire transition, negotiating new partnership agreements and establishing new standards, procedures and reporting,” Hoffmire says. “We have updated the program every year and we now have built-in quality processes that aren't affected by turnover.”

“We use (Food Insights) in several ways,” Palmietto says. “They research new product lines for us including food, paper supplies and a variety of other product lines, and they contact individuals who want to work with hotels to develop contract pricing. They are like hunting dogs. They get into places that we cannot as a hotel company.”

Food Insights also tracks purchases and rebates, manages the entire purchasing program between manufacturers, distributors and hotels, and compiles reports so that in most cases, Hammons can fix a problem internally before it becomes apparent to customers.

Although Food Insights' ability to save hotels money is what gets them in the door, the final result of the behind-the-scenes work is building a loyalty factor.

“You want people to be able to count on their experience at a property, and know they are going to get the same quality every time,” Patton says.

CONTACT freelance writer K. Denise Jennings at cjennin1@midsouth.rr.com