(Reuters) - Plans by one of the largest hotels in New York City to jettison room service could spur other hotels to scrap the luxury to improve profits, Hilton Worldwide Inc reported its chief executive said on Monday.
The New York Hilton Midtown, a 2,000-room, full-service hotel, plans to eliminate room service this summer and open an on-site eatery that will offer gourmet take-out. The company said it does not have current plans to roll out the initiative more broadly at its 4,000 hotels worldwide.
Chief Executive Christopher Nassetta, speaking at a hospitality conference hosted by New York University on Monday, said he expected other hotel companies to scale back or scrap room service, according to Hilton Worldwide. Fewer guests are using room service and it is not profitable for many hotels, the company reported him saying.
The move could represent a major change for the industry as hotels seek to boost profitability and closely examine what products have value and what can be expended.
“It’s big news because room service is iconic within a full service hotel operation,” said Scott Berman, who leads the hospitality and leisure practice at PwC. “But for a long time, it’s been a drain on its ability to perform.”
Bjorn Hanson, a professor of hospitality and tourism management at New York University, said he is aware of hotels that are looking at alternatives to room service, and expects announcements over the next three months regarding breakfast service changes in particular.
“Changing consumer use of room service is enabling hotel companies to study alternatives,” Hanson said. “The demographics that represent the largest number of travelers do not want to spend the hour in the guest room that’s involved” in placing a room service order and waiting for it to be delivered, he added.
A spokeswoman for Marriott International Inc said her company had no plans to eliminate room service at hotels that offer it.
Si Sloman, principal and owner with MJS Hotels, a Scottsdale, Arizona, hotel management company, added that the ease of ordering food online from other venues besides hotels has reduced consumer reliance on room service.
“Hotels continue to have to reinvent their brands and make them more appealing to customers,” Sloman said.
Reporting by Karen Jacobs in Atlanta; Editing by Lisa Shumaker