How to unlock the value of hotel restaurants

There was a time when hotel restaurants were special and desirable, the pinnacle of fine dining experiences and the places to be seen. For myriad reasons, those days are long gone. Today, many hotel restaurants have earned a reputation for unimaginative food, marginal service and poor value. The principal reason is that, as a business proposition, restaurants are labor-intensive, low-margin business units that are tough to get “right.” Consequently, many hotel operators treat restaurants as a “required amenity,” believing restaurants are not worth their attention.

Within much of the big-branded hotel space, senior leadership’s systematic approaches to food and beverage are driven from the corporate office. This predictably has resulted in conservative and arcane practices that lack innovation, creativity and the
appropriate organizational structures to ensure success within the restaurant space. To wit, many GMs and
directors of F&B at full-service hotels are unqualified, or under qualified, to oversee restaurant operations. Even

when there is an “autonomous” restaurant, often the underlying operating philosophies remain grounded in the corporate F&B playbook.

Thankfully, groups such as Kimpton Hotel & Restaurant Group, Sage Hospitality, Morgans Hotel Group and numerous others have broken with the tradition of giving short shrift to hotel restaurants and, for the most part, have been rewarded for it—directly in profitability and indirectly in overall competitive advantage. I believe the apathy of operators toward F&B generally, and restaurants specifically, should be arduously challenged by owners of hotel real estate.

As in any business, much of the success lies in the details. This article focuses on four underpinning factors critical to the success of hotel restaurants and unlocking the value within: strategic assessment; absolutes; trend-based evolution; and sustainable practices.

Strategic assessment

Before embarking on any effort to change, it is vital to make an honest assessment of the market potential for something other than a three-meal restaurant “amenity.” Factors to consider are the following:
• potential for local business;
• competitive restaurant environment;

• facility constraints;
• indirect benefits of strategic positioning;
• labor market (including union issues); and • third-party options.

When a case can be made for a focused restaurant strategy, ownership commitment is required, operator buy-in is critical, and competent local management is imperative. If the case cannot be made, other strategic options should be considered rather than just continuing down the same path.

Absolutes

The essentials are mostly well known, and yet, mostly executed poorly. The list is long, but begins with the following: • hiring the right people (restaurant professionals, not hotel employees);
• service training;
• sensible productivity standards;

• thoughtful menu planning and engineering;
• unrelenting internal controls;
• knowing your potential food cost compared to actual food costs; • meticulous attention to every detail of the operation;
• dynamic marketing; and
• consistency.

Trend-based evolution
Restaurant trends are evolving more rapidly than ever. Everyone is becoming a “foodie” to some degree. Typically, a restaurant cannot keep up, and some trends are not worth following. The local management team, and hopefully the brand and management company, must be dialed in when it comes to monitoring the restaurant landscape and what it means to business.

Today’s hot trends include farm-to-table; hook-to-cook; tail-to-nose; healthfulness and nutrition; craft cocktails and beers; artisan-produced foods and beverages; edgy designs; local restaurant concept (as opposed to a hotel dining room); and “celebrity” chefs.