Essential Tips On Integrating Tech Into Your Restaurant

Restaurant Revenue Management Toolbox

Strategies to improve Profit from your Restaurant

by Puneet Mahindroo, CEO & Founder RevMantra and Rohit Sachdev, CEO Soho Hospitality

Discover key strategies for integrating technology into your restaurant to boost efficiency and customer satisfaction. This overview will highlight essential tips for choosing the right digital tools, streamlining operations, and enhancing the dining experience, ensuring a smooth adoption and impactful results. Presented by the Hospitality Sales & Marketing Association International.

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ENGLISH TRANSCRIPT

I heard you are implementing a lot of F&B Revenue management in the Singapore Market? (Asks Cat Wu)
All over, not just Singapore but in any countries all over the world now ranging from Australia to Europe.  Can you share a little bit; what do you see is the latest trends and what do you see especially in Hotel restaurants, what do you see as the the benefit of having the F&B Revenue management? Well, it’s been five months into the year and this is the 12th time I’m talking on the subject in five months so that just shows how much interest is there whether it’s restaurant Revenue management or integrating technology into restaurants, there are quite a few people over here who are bold and brave to already embark on that journey so I’m really proud that some of them are present in this room and the reason is that behind every calamity comes an opportunity and I think Covid was one such calamity that gave an opportunity, an emphasis on food and beverage which was treated like a prodigal child for a long time and today instead of being an ancillary area of Revenue generation, a lot of owners, more than operators, a lot of owners are realizing that I have this huge capital investment in real estate so how is that performing?  How is that generating revenue and I can tell you two years from now your performance tests are not going to be based on just GOPAR and GOP levels and how you rank on STR.  Its going to be based on how you utilize your food and beverage facilities so there’s a huge mindset change and I think that’s driving both in the independent as well as restaurants housed in the hotels so I/ we work with both right so I see both the realms of independent and Hotel restaurants. Now I know what KPI I need to set for my hotel next year.
Puneets POV
Thank you,  so I’ve already done similar sessions now this is the 12th one I’m doing and thank you to HSMAI and you know it’s so strange that I was at HoReCa which is one of the biggest conferences for food and beverage, it’s a very big exhibition in Thailand so I had a one-on-one with uh Rohit who’s a phenomenal a,uthority in restaurants in Asia he’ has got people swear by his outlets, in fact today, he was talking and he didn’t even mention, he just said I have some restaurants and people started blurting out names of restaurants and they were all his right! He’s got them in Thailand, Cambodia, Dubai and Saudi Arabia so he is a major authority in food and beverage and we’re going to be having a quick conversation with him but what I wanted to do is speak about first is technology, integrating technology into restaurants, and I just want to talk about customer life cycle journey; you know it used to be fairly simple, flat, someone comes to the restaurant, eats food, chef comes out says hello, you eat the food go and back home and tell a few friends about it, what a great xperience you had and then the journey was over.   This has now transformed in the last 8 to 10 years, you know and we feel the extent of that transformational journey which has become highly complicated from the way you design restaurants to the way you do the service aspects of the restaurant, to the way you optimize performance of the restaurants right and this change has led to already transformational technological advances that apply to restaurants so whether it is online menus to things like Open Table, Trip Advisor and talking about restaurants and you can book restaurant tables through those apps.

Distribution

There is a huge amount of digital disruption in this space and and it’s continuously evolving so today, when I ask a hotel “what is your distribution strategy?” How many of you can tell me your distribution strategy for your hotel?” Raise your hands.  For the restaurant, the answer would be maybe two or three people in the room and that’s been my experience if I ask someone what’s your distribution strategy for a
restaurant no one knows right and and I don’t blame them because we’ve never thought about it strategically and that’s why I put up
kind of a Distribution Roadmap over here of how complex Distributing a restaurant is and I don’t want to take the fire away from Rohit in the conversation I’m going to have but I just want to put some thoughts out there  which are thought-provoking so today restaurant technology is not just essential, it’s a priority, but one of the key questions an independent restauranteur asks me is “I pay
200 bucks a month for Google, I pay another $200 for my emails, I pay for my PR another $400 you know if I add up all these costs, I’m paying $3,000 just for this and then you want me to put money in digital marketing that’s another 6,000, I’ve got a fixed cost base of
$6,000 so if I add another $60,000 for other fixed costs, I have to start the month thinking how am I going to pay $70,000 and make money on top of that where my margin in this industry is only 6 -8%. I had speak to his Finance person, I said why can’t you cut down costs and the next question was didn’t you hear him say it’s a fixed cost base where do you want me to cut cost? Beneath the only way is to go up, increase revenue and that’s the reason why technology is so important, and it makes money I’ll give you an example for a restaurant in Dubai, we did a menu engineering exercise, we increased the price of all chicken dishes by 30 cents it generated $25,688 in incremental Revenue. Multiply that into 12 months annualise it, tell me how much money you made?  Insane amount of
money, it can pay salary wages, it can drive serious profitability.  I have several examples like that I can go through.  I also have a tech product which does exactly that today so it’s not that technology is not available, it’s not that data is not available right so with that context in mind.
Interview
I would like to invite my partner in crime Rohit on stage. Rohit is like I said an authority in food and beverage he runs
restaurants like Charcoal, Above 11, Havana Social where people going to Bangkok would have partied quite a bit uh and he’s got restaurants in Dubai so welcome Rohit thanks a lot thanks a lot, so you know a funny story is I had two setbacks getting in the tech and I failed and then I got to hospitality which is really what runs through my veins so when he called me, he said he’s bringing me to a Tech
conference I was like wondering if I my voice is loud enough, we’ll turn it was inviting me to a Tech conference I was like Puneet, are you really sure I’m the right guy to come here today? Thanks a lot for having me today you know a funny story about me and just as a precedent of this conversation, the story about my journey with tech at SoHo Hospitality; I was at a about two years ago when we were getting out of the Covid pandemic and I was invited to a conference where a moderator asked me what is Soho Hospitality that’s my company dealing with data and I stumbled for a few seconds not knowing what to answer and then I courageously or foolishly answered data.  We don’t know what we’re doing with our data we have no clue and about few weeks after this, true story, I was at HICAP in Singapore and Sebastian was on stage doing a fireside chat and the moderator asked Sebastian “What is accor doing with this data and to my surprise his answer was no different from mine, he said Accor has no clue what it’s doing with its data and that’s when I realized that the problem of data in Tech is not a Soho Hospitality problem, it’s an industry problem and what I did then is I dropped everything I was doing I put a task force together and I said let’s go and address the data challenges at our company and what we did was we mapped out all the technology platforms that we’re using, reservation management, table management, we’re using Seven Rooms POS, we’re using Revel and then you know we’ve got the accounting app, we used Sage300, and when we looked at each of these applications,  the one thing was that they were all sitting in their own data silos.  None of them spoke to each other and then when we started going to the provider and say hey we need to connect our POS with the accounting app and they’re like well you’re not big enough we don’t have the API connectivity and we’re not going to do it for you.  So, that sets the precedent for the problem that we have
today as an industry and it goes beyond restaurants it goes into the hospitality industry as well when you look at the hospitality industry, massive amounts of consolidation right like you know, it’s like a Pac-Man the hospitality is like Pac-Man, each one is trying to acquire smaller companies so that they can gain market share you know Accor is doing it, Hyatt did it, Marriott and Starwood and that
presents another whole set of challenges because we got to integrate more systems and at the same time we have more Tech coming into the space right and that whole Tech thing started with OTAs, OTAs caught the hotel industry with their pants down and that started them looking at Tech because they fely they needed to do it but that started a precedent of new tech applications  came about and what you said was really interesting because, now it’s death by you know software-as-a-service right, like your software is a service this guy’s
offering this software as a service and it’s death by software as a service.  We gotta have fixed costs as an industry and we got to see  and really articulate what we actually need, where are the gaps in our business that we need software, so that’s kind of a precedent of you know where where I am and we still have challenges but we’re trying to address those challenges.
Great Rohan, that was a fantastic opening so thank you for doing that, and killing my first three questions!  Anyways, taking a cue
from that question you just open El Santo right? A fantastic Mexican restaurant and talk us through that journey because I know you
talk about different phases of restaurant development and how have you integrated, how do you take these decisions about integrating technology into your restaurant and what technologies do you use? What is the value you see out of them how does it help you, you’ve got an army of food cost controllers sitting in your office. You know which I’ve never understood, and your dad says you have just too many people so when we first looked at all the data applications and all of the silos, we needed to look at which ones were going to be the simplest to integrate and the one thing that we did which was the biggest win ,for us and it’s funny because if you ask the hotel guys they still don’t have this, we integrated Revel with Seven Rooms and by integrating these two applications, which both have an existing
API.
“So you want to tell everyone what’s Revel and what’s 7 Rooms?”
Revel is a POS system and it’s not Micros, it’s a more, it’s much more, a lot of restaurants are using it, they’re actually based out of
Singapore and Seven Rooms is a table management system that allows you to basically get your customers to upsell.  On Seven Rooms you can get them to prepay reservations you can tag customer preferences in terms of their dietary restrictions, and all that, and what we basically did was we integrated Seven Rooms with Revel and by doing that we are able to; every time you pay in the POS that data gets exported into Seven Rooms so we can actually look at your spending, we run a restaurant group with six lifestyle Brands and one Quick Service Restaurant Pizza brand and we can now see the guest Journey not only at one restaurant in the group, but across all seven restaurants in the group so we can see every time we pull up the customer data we can actually see how much that customer has spent at a particular restaurant but we can also see how much he spent across the entire group so you get the visibility on the ndividual level but you get the visibility also at the group level so that was that was one of the first things that we did.  But ask the hotel guys today can they do that and I challenge them because they can’t do that. Okay, I’m going to protect my hotel people, they are already doing that, they’ve got very good Food & Beverage programs.
The next question is; fine you spoke about it you can see the customer journey, you know how much was spent, how big a sucker he is for your restaurants and so on and and so forth, what do you do with this? Okay, how do you use it?

Customer Data

By looking at this customer data, we can now actually see who tops the spend per visit for example, and based on that spend per
visit and knowing like what spending power each customer has we can for example “there’s somebody who uh you know buys expensive wines we now have you several bottles of that of expensive wines that we know cater to this particular customer type and then we
train our our waiters to you know perhaps offer them those wines as an upsell to the customer right if the customer is (we we can even tag the customer that he’s a gin tonic drinker), we we will know that if he’s vegetarian, and we can sort of pre-empt what the customer needs are so that’s that’s the basics of what we can do from that perspective, and we can also start what we can also do is we can start benchmarking that data because we have the visibility across seven restaurants we can start benchmarking that data across various restaurants to check on efficiencies and what concepts generate what kind of returns okay,

Improving operational standards

There’s also some other apps that we’re using like at Soho Pizza we’ve got seven outlets and we need to maintain consistently across those seven outlets so we use a platform called Nimble; and it’s a it’s a tech platform that allows us to do opening check checklists, closing checklist, so that
like in terms of hygiene cleanliness, operating standards, they can basically use the app to you know say what they do like.  At the end of the night they need to clean all the shops and make sure that the standards are there in terms of hygiene.  The app allows you to take a
picture of the premises so you can take all of your shops and especially the important ones put them on the app and we use the app to communicate all of those operations in terms of quality assurance.  That’s another app that we use, we’re talking to a company um right
now called Eat Labs, amazing MIT graduates, we’re actually meeting with her tomorrow. We’ve had several conversations and what they’re using is Pixelated cameras that are going into restaurants, and through Machine Learning, the pixelated cameras  can actually learn the repetitive functions that are happening in the kitchen, for example, in our Soho Pizzas we can place these pixelated cameras into the kitchen so when they’re making a pizza for example,
“Are you spying on your employees?”
Sort of, but here’s where it drives efficiency, let’s say in a 12in pizza, you can put 2 pieces of pepperoni but your guys’s you know he’s overloading it right he’s putting like 15-16 that’s a cost that’s taken away from your balance sheet so through machine learning these pixelated cameras they don’t know it’s a pizza but through the pixels it starts to learn what’s going on, and it can improve efficiencies in the kitchen but what’s more interesting, it can also do it within the restaurant in like for example if you’re raising your hand up a lot and like see waiters are not coming it would actually be able to notice the discrepancies in service standards in terms of customers needing to order something or needing a waiter to attend to them and if hey’re not doing that, it would be able to spot that, so there’s a lot of really interesting Technologies out there.
There’s also another one this might be really really interesting for the hospitality industry, it’s called HEN, it’s an AI Tech that uses avatars to create videos and you can create any type of video and it could you use my face and my body on a video and you could make me speak Chinese, English, Thai and you can use that instead of having like SOPs on soft copy that waiters have to learn by heart. You can actually transform your SOPs into an avatar and it’s able to speak, you know, share those SOPs using like AI driven avatars and voices and that could replace your documentation so there’s a lot of interesting stuff going on.

Digital Menus

That’s awesome but some people who are critics of Technology would say that there has to be some balance right? You’re overkilling with technology right? One of the question points you also made is where do you draw the line for instance digital menus? There’s a huge discussion about it, it’s taking away the human touch, it’s taking away the art of selling, of suggestive selling, and so on so how do you deal with such questions in casual to fine dining restaurants?
I do not believe in digital menus, I just,  I will not do it at my restaurants right now but at SoHo Pizza it comes up to another point regarding pricing but at SoHo Pizza we decided to do Dynamic pricing, we implemented digital signage boards at at all of our locations and in the ones that are tourist Centric, where we see a increase in demand during the late night hours from 11:00pm to 4:00 a.m, we actually increased the prices of our pizzas by almost 10% at those tourist Centric locations, which resulted in a 10-12% increase in the
overall revenues you know um at our at across all of our SoHo Pizza restaurants.

Pricing

But the point that that kind of led me to believe is that when it comes to pricing like hotels have done a great job, they now understand how to yield, and what the intrinsic value of their rooms are but when it comes to pricing restaurants, they have no clue.  What to do when it comes to pricing? Herman Simon, this founder of a company called Simon Kutcher and Partners, the largest pricing consultancy in the world, he said that there are two mistakes that Brands make when it comes to pricing, you make the price too high, or you price too little, and pricing is based on the perceived value of the goods and services that you sell, and restaurants have no clue what is the
actual value of the goods i.e. the products that they sell in their restaurants.  This winter I increased the prices 5% across two of my
restaurants and um you know we one does about 400 people a day, another one does about 200 a day, and I did it during the high season I said you know Covids, over this is going to be a great high season in Thailand, let’s raise the prices across across the entire menu.  Not one single complaint.  What does that tell me? That tells me that I was leaving money on the table, and we actually do not know what is the true value of the products that we sell, and the thing is pricing doesn’t have to be challenging right? Simply increase the price and it drives all the way to your balance sheet.  But that’s where you have really inspired me! Um this guy’s a genius when
it comes to revenue management and he really inspired me to go and look into the internal organs of my company to make sure that we are pricing right and we’ve started to doing a lot of menu engineering you know and and the one thing we have to realize is that in restaurants the menu is our real estate, just that this is we look at, we value, you know Hotel developers, value their real estate Assets.  In a restaurant we got to value that menu as our real estate because that’s what’s bringing yield to the balance sheet but we don’t
do a good job of it and the last point I wanted to make is there needs to be more critical thinking in terms of the correlation between menu design and profitability and we haven’t done enough studies in that area.
Some great takeaways but I think my biggest takeaway is if you’re in Bangkok and you’ve had a nice drinking night don’t go to Soho Pizza because you’re going to be paying five times more for the damn pizza, don’t go!
Don’t come to us from 11:00p.m. to 4am (laughing).
Fantastic, thank you very much for sharing such great insights I think everyone has had thought-provoking takeaways the deck is going to be available it has a lot more details so you can go through it Rohit and I are around throughout the day today so happy to talk and engage and have conversations.  As you know, there’s passion flowing from a geek who can speak, as well as from a tech who failed and became a restauranteur!
Thank you very much

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