Clubs are setting their F&B budget parameters for 2021 with cautious optimism and care.
Clubs’ food-and-beverage managers and chefs have surprised even themselves at times this year with their adaptability and determination, as they have had to make myriad changes while navigating the challenges posed by the pandemic, But there’s still no denying that 2020 has brought a crash in F&B revenues, primarily through significant loss of wedding, banquet and catering business.
However, it’s not all total gloom, as clubs have positioned themselves this year as a much-needed retreat for people whose other outside-world options have largely withered away—and the way in which their food-and-beverage programs have been creatively revamped deserves much of the credit for doing so successfully, while still assuring proper safety for members.
As it becomes increasingly clear that the COVID-scape is likely to linger well into 2021, clubs are factoring how they have still proved to be a big hit—and where they’re still likely to miss—as they set financial objectives and budgeting goals for their F&B operations in the coming year.
At least half of the members of The Country Club of Pittsfield (Mass.) have dual residency, says Chief Executive Officer Melissa Aitken, usually spending the warm months from June until October in Pittsfield before going elsewhere for the winter. But with the onset of the pandemic, many members—most of whom are over 65 and in the “at-risk” category—came back to Massachusetts sooner, and made plans to stay there longer. And while there, they have been spending more of their time at the club.
“Usually members come to the Berkshires to immerse themselves in the cultural offerings the area provides,” says Aitken. “On a typical day, they arrive early, play golf, swing in quickly for a dinner, then head to a show. Most of the time, their social calendar is very full.
“This year, not so much,” she adds. “Members have basically had nothing to do locally, due to COVID. Luckily, due to the efforts we put in to adhere to all of the safety regulations and guidelines, they have felt very comfortable being here.”
Still, with events reduced to a whisper, budgeting for 2021 requires conservative number-crunching like no year before, especially as outside options may begin to open up more. The new year likely won’t be totally back to “normal,” but it still may look different than 2020.
In early fall, Aitken and the team at Pittsfield began looking at the club’s 2021 budget as a whole. For F&B, Aitken predicts that even if restrictions lift, some people won’t feel comfortable dining, and large events will still likely be off the table.
Noting that Pittsfield doesn’t normally budget for a lot of events from January to April, Aitken says that “Our fingers are crossed that by May, restrictions will be lifted at least a little, and we can return somewhat to business as usual—still adhering to safety guidelines.
“Most of our events will probably have headcounts in the 50 to 100 range by May or June,” she adds. “I don’t even think hosts of events will want to have 200 people anymore. I anticipate at least a 25% decrease in catering, and honestly I think that’s being a little hopeful.”
As a result, Aitken advises clubs to take a simple “bottom-up” approach to budgeting through which expenses are covered first, and then fewer events with lower capacities, which will require fewer staffers, are forecast.
“It’s an easier way to determine expenses and what you need to cover them,” she explains. “Then you’re not as scared later [as opposed to] if you just budgeted like you did for 2019 and hoped for the best. I don’t think anyone is doing that at this point. Our F&B is changed for the foreseeable future. It’s time to adapt and make it work.”
The coming year’s budget will also account for additional expenses to make Pittsfield’s indoor space even more comfortable for members who are still cautious. For example, the club recently purchased additional air purifiers and more table dividers, to try to entice people to spend time indoors in the winter months, as outdoor dining, even with heaters in place, comes to an end.
What ‘Wins’ Now Look Like
Like other properties, Kenwood Country Club in Cincinnati, Ohio has found bright spots in the revenue it’s been able to generate during the pandemic through creative offerings in to-go service, including family meals
“I joke that we make more money selling a to-go Thanksgiving package for $400 than by having 800 people here for a buffet, because we use less labor,” says Chief Executive Officer Dylan Petrick. “It’s difficult to characterize these things as ‘wins’ in food and beverage, but they are now.”
For its third fiscal quarter (October through December), Kenwood budgeted for 50% of its originally projected revenue—about 60% less than the same period in 2019. “That’s a net loss of well over $300,000 over three months,” Petrick reports.
In a “regular” year, Kenwood’s food-and-beverage operation does not break even, serving as an amenity subsidized by other key revenue sources, such as membership and golf. That need for a subsidy will be even greater in 2020, and while the club has been able to get through this year, continuing that pattern won’t not be sustainable over the long haul, Petrick says.
Still, Petrick strongly believes that cutting back on experiences is bad business for clubs as they strategize survival tactics.
“Clubs that decrease their food-and-beverage subsidy are going to start seeing members leave,” he warns. “Members are paying for experiences. If I cut that service back but charge the same amount in dues, why are you going to stay?
“We have to bite the bullet a little more in food and beverage,” he adds. “That doesn’t mean we won’t get more aggressive in cost-cutting and pricing. But if I cut about $2,000 in subsidies, and then I lose my [membership] waitlist, that’s foolish.”
As a result, Petrick and his staff are focused on finding ways to tighten up through a rigid cost analysis, without sacrificing experience.
“Clubs in the past set their liquor, beer, and wine prices, but how often do they go back and look at costs and consider where adjustments can be made?” he asks. “Are you doing proper menu mixes? Can you cut your menu size down a little bit? We’re doing those deeper-level F&B analyses to save a couple of percentage points.”
As Kenwood CC prepares for 2021, Petrick says he is cautiously optimistic, although he is expecting finances to “bleed” again until at least June or July.
“We may see COVID drop off if a vaccine comes,” he says. “But the really large holiday parties of 300 to 500 people are going away for at least a couple years. If your company is working remotely to be safe, why are you going to hold a 400-person holiday party and risk exposure?”
With question marks around how politics and science will unfold, Petrick is playing it safe by budgeting for about half of the events Kenwood did in 2019. The good news is that golf outings are returning, and to full capacity, as state restrictions loosen.