Carry cash catering

Hotels fight back, find foothold in off-premises catering arena - off-premises catering market

Sparked by their clients' demand for novelty, status and local charm, major hotel chains are launching a new attack on the off-premises catering market.

A burgeoning revenue source, the off-premises special-events niche also has hotel caterers excited because it offers them entry without demanding huge capital commitments -- for expanded banquet space and new equipment.

"I can do a 2,000-person dinner at the Field Museum without having to build a new ballroom," said John Svensson, who directs off-premises catering operations for the Hyatt Regency Chicago. Considered one of the top hotel-operated groups in the nation, Regency Catering by Hyatt will gross "several million" this year and, according to Svensson, off-premises business should grow by 9 percent to 12 percent.

"There isn't that much expense -- you rent a couple of trucks and give it a ride," added Svensson, noting that convention clients today want to do more functions outside the hotel -- in museums, boats and art galleries, for example.

In fact, some believe that the off-premises plunge by hotels is really a desperation move to win clients back from independent caterers who began wooing them away with high-character venues in the first place.

"People want a new atmosphere, a new environment," said Stephanie Read special events coordinator for Atlanta's Fernbank Museum of Natural History, one of many public venues there that are becoming popular as off-premises catering sites.

"Famous homes and public sites have more personality than a basic square box ballroom," added Lauren Alanskas, an Atlanta-based independent whose Gourmet Tidbits caters to small groups at historic Naylor Hall.

"Some of what we're seeing is panic," said Michael Roman, a onetime hotel caterer who runs the Chicago-based consulting and training group CaterSource. "Hotels have been under attack for a long time, and now they're fighting back."

Roman estimated that hotels gross $20 billion a year from off-premises catering, an amount roughly equal to that done by the nation's 46,000 independent caterers.

"I'm calling off-premise the `stealth' segment of catering--it's bigger than everybody thinks," Roman said. "Off-premise is to catering what home-meal replacement is to the fast-food niche. It's an explosion."

Hetz Wochholz general manager of the Cleveland Marriott Downtown at Key Center, said many previously unavailable off-premises venues are throwing themselves open to catered events because rental cash represents a new source of revenue for them.

"This is a nationwide trend, and it's providing opportunity for a lot of us," Wochholz said.

The Cleveland-based Rock & Roll Hall of Fame, for example, is adding a 10,000-square-foot catering hall complete with a kitchen, according to Wochholz. But that venue may wind up hiring its own catering staff rather than assemble "a preferred list" of off-premises operators, he speculated.

"We'll make 10 percent of our overall dollars on the road this year," said Wochholz, who also competes with strong local caterers yet projected that his property would gross $500,000 from off-premises catering in 1997.

In Atlanta, the Ritz-Carlton Buckhead just created a neW off-premises catering department and named former catering manager Deborah Hill to direct the operation.

"We've only got so many square feet [of on-site space]," said the luxury property's general manager, Robert Warman. "In order to grow the business, we have to move outside."

According to Hill, the hotel now can cater two or more same-night events without conflict, using its 10,000-square-foot ballroom and other chosen venues, such as the Atlanta Botanical Garden. Like her peers, Hill said an increasing number of clients are exploring alternative sites -- off premises -- for catered events.

"An existing client opened a new office and wanted to show it off," Hill said. "In the past we couldn't have done it outside, but we were able to cater this function in their new building, which is just what they wanted."

Hill said she became aware of the niche's potential while she was preplanning catered events for the 1996 Summer Olympics.

"We were getting approached for so many catered events, we put up a 25,000-square-foot tent on the roof of the parking deck. It was 2.5 times the size of our ballroom," she said.

Now Hill's staff bids off-premises social and corporate events, fund-raisers -- even private-home events -- for groups from 50 to 1,000.

"The catalyst here was definitely the Olympics," added Ritz-Carlton corporate food and beverage director Otto Svensson. "We see a 20-percent growth opportunity chainwide in off-premise catering."

The Ritz-Carlton Buckhead's sister property, Laguna Niguel, a California coastal resort between San Diego and Los Angeles, is moving even more aggressively in the off-premises market. Also boasting a 10,000-square-foot ballroom, Laguna Niguel has catered at 30 different sites since launching its effort in 1996.

Laguna Niguel's off-premises director, Elizabeth Howard, said the nearby Mission San Juan Capistrano, because of its postcardlike ambience and romantic history, is a top venue with clients.

"The competition [from independent caterers] is severe, but by focusing on custom events we created a niche," Howard said.

"We're also doing regular events at Salt Creek Beach [a public space that recently became available for private functions]. Most of the conference groups that stay here opt for something on the water," Howard added.