If you want to lose money, open a restaurant. If you really want to lose money, find yourself a celebrity chef to go with it. If you want to be sure that future generations are condemned to penury, make your harassed general manager run it.
This has been the grinding truth for the hospitality sector and for hotels in particular for much of living memory, accelerated in countries such as the United Kingdom where a boom in restaurants and a broadening of guests’ palates has driven a taste for adventure hotels have not kept pace with.
Globally, the search for experience means that travelers want to drop their bags in their rooms and rush out to taste their surroundings. As Anthony Bourdain said: “Your body is not a temple, it's an amusement park. Enjoy the ride.” People have been only too eager to strap in.
Hotels have allowed themselves to become commoditized — a product where the bed is the message, where the guest goes to be unconscious and store their passport. Across the chain scales, hotels have been pulling back from food and beverage, with guests using their Uber Eats memberships to deliver something more inspiring than tepid club sandwiches in a half-empty room. Taking a cut of in-room deliveries has been a upside for many after years of losing money on a kitchen. Some hotels have even turned over cooking space to dark kitchen operators, handing in the keys on their own aspirations for F&B.
In the luxury segment, the restaurant often plays a similar role to the trouser press: required for the star rating but unlikely to make money. In this area of the market a spectacular restaurant — often on the roof if weather allows — with a big-name chef is part of the hotel’s marketing strategy. If you want profile and bookings, you can’t be without one. But it’s part of the window display, not the bottom line.
In the attention economy, this has meant growth in trends such as pop-up restaurants, where hotels seek to stay ahead of food fashions by dropping the latest thing into their properties for a few weeks or months, with reputational gain, rather than revenue, driving decisions.
It doesn’t have to be this way. Most hotel restaurants fail because they exist to serve the hotel, not to stand on their own. I believe that when a restaurant becomes a true destination, it lifts everything around it: atmosphere, bars, events and guest engagement.
Guests want to stay somewhere remarkable, which means more than great design and a good shower; it means adding a restaurant different enough to bring something new and interesting to both the property and the surrounding area. It enhances the credibility of the food-and-beverage offering and reinforces the commitment to quality hospitality, which can be enjoyed not only by guests, but by the local community, embedding the hotel in the locale and creating that authenticity travelers crave.
Hotels have accepted the adage ‘hotels can’t do F&B,’ without considering what they could achieve with the right partner and the right agreement to back it up. As the sector moves into the mainstream as an asset class, owners and investors are looking at revenue per square foot, not revenue per available room when they consider the success of a hotel’s operations. With cost pressures on all sides, every aspect of a hotel must perform profitably to justify its existence and, in the high-end market, this means the restaurant, too.
Bringing in a destination restaurant requires the same rigor with which you would choose to invest in bedroom refurbishments; with a clear view of its purpose and on the return it can bring. This means both revenue and reputation, driving profits and valuable guest loyalty. It is crucial that top management is aligned on clear business targets from the outset and that both parties work together to deliver their shared goals. This is no drop and run, but a long-term partnership with mutual success at its core.
A true destination restaurant can breathe life into dead space. And that which inspires life is what defines the hospitality sector.
Gabriel Gonzalez is managing director of LIMA London.
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