Updated: Mon, 03 Jun 2013 17:02:00 GMT | By Darren Booth, CNBC

New York Hilton, city's biggest hotel, quits room service



Taxis pass the New York Hilton Midtown Monday. The biggest hotel in New York City is halting room service.

Taxis pass the New York Hilton Midtown Monday. The biggest hotel in New York City is halting room service.

Enjoying breakfast in bed at New York City’s largest hotel will soon require you to head to the lobby for grab-n-go items, as traditional room service comes to an end.

This summer, the 2,000-room New York Hilton Midtown will discontinue room service. If guests want a bite to eat, they can go to the hotel’s gourmet self-service Herb n’ Kitchen outlet.

The move comes as Hilton and other major chains expand casual dining options to meet changing traveler demands, and help offset decreasing in-room dining requests.

More than 50 jobs may be eliminated at the landmark hotel on 6th Avenue between West 53rd and 54th streets.

But does this change whether a hotel can call itself full service, and will more hotels follow Hilton’s lead?

Casual Dining Expansion
Hilton initially announced its casual dining concept last fall.

“We surveyed 22,000 guests, owners and operators and we learned that the way people eat at home is translating into the way they eat on the road,” said Beth Scott, Hilton Worldwide’s vice president of food and beverage concepts, in a statement. “As a result, we decided to reinvent the hotel dining model to better serve the needs, wants and lifestyle of our customers.”

And Hilton isn’t alone in its development of casual, yet gourmet grab-n-go dining options for travelers.

The Grand Hyatt New York, for example, opened an establishment similar to Hilton’s Herb n’ Kitchen called the Market in 2010, but as an addition to room service, rather than a replacement.

Declining Room Service Revenue
In 2012, room service represented just 1.2 percent of total hotel revenue, down from 1.3 percent in 2011, reported the USA Today citing PKF Hospitality Research figures.

And this appears to be a driving factor in Hilton’s decision at its New York property.

“Like most full service hotels, New York Hilton Midtown has continued to see a decline in traditional room service requests over the last several years as customer preferences and expectations continue to evolve,” said a hotel spokesperson.

One industry analyst understands why Hilton is making the move, citing outside competition.

“I'm sure room service demand has declined,” said Henry Harteveldt, travel industry analyst for Hudson Crossing, noting that many hotels – particularly those in New York City – face growing competition from the likes of McDonald’s, Starbucks and street diners on virtually every block.

“Opening the lobby café is one way for the Hilton to serve its guests as it tries to also win back some of the business it may be losing to outside establishments,” he said.

But Harteveldt cautions it could also put a hotel’s status in jeopardy.

“It will be tough for the Hilton to call itself ‘full service’ without room service, even though it offers many other amenities,” he said. “If room service is a requirement to earn a four star rating from independent organizations like AAA, Hilton's move may put (that) rating in jeopardy, unless the hotel can obtain an exemption.”

Will other hotels follow Hilton’s lead in dropping room service from full service properties?

“If the Hilton and its union can find a way to compromise on pay and benefits, it's possible room service may return to the Hilton,” said Harteveldt. “If not, we may see other hotels drop room service as well.”

Hilton said it would work with its union to offer alternate positions or severance packages at the New York property for those employees impacted by the upcoming change.

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