Restaurants play a bigger role than ever before in boutique and lifestyle hotels. And with the right concept, owners can make a healthy profit, said a panel of food and beverage experts at the Boutique Hotel Investment Conference in Manhattan last week, presented by the Boutique & Lifestyle Lodging Association.
“Today more than ever, eating is a lifestyle, so people want to go to hotels where they know they have a good restaurant, good chefs, and it’s a full experience,” said Richard Sandoval, chef and owner of Richard Sandoval Restaurants, which has about 30 self-operated restaurants around the world and 10 hotel concept developments.
When owners approach Sandoval to do a restaurant inside their hotels, he often feels his existing brands aren’t the right match. “Every hotel is different and every city is different, so you cannot just take a brand from somewhere and think it’s going to fit,” Sandoval said. “Sometimes it’s more important to understand the community your hotel is in, and then develop a concept for that hotel.”
One of the first steps to building a successful hotel restaurant is to understand the relevance of food and beverage to the brand, said Tom Dillon, cofounder of APICII, an F&B development company. Developing a business pro forma is a key step, but “before we even get to the revenue side, the starting point is to create a concept that really supports and helps define what that hotel is.”
Differentiated concepts are not only an additive to the hotel brand value, but also offer a unique experience that draws both guests and locals. When working on a restaurant project, APICII also considers the local demographic, what drives people to a particular area, and what the comp set is doing. “A lot of our up front work is driven by those demographics and also an understanding of the landscape in terms of what things are currently working in that market,” Dillon said.
Sandoval knows firsthand the importance of local business to a hotel restaurant’s performance. His La Hacienda restaurant at the Fairmont Scottsdale Princess in Arizona attracts 40 percent locals, and Raya at the Ritz-Carlton Laguna Niguel in California draws 30 percent locals. “If the owners are going to pay these fees to us, for us to be relevant, we have to drive the locals,” Sandoval said. “I don’t think you can’t sustain a restaurant just from the hotel guests.”
Morgan Plant, VP of food and beverage for KSL Resorts, suggested hotels host local town hall meetings to determine what residents are looking for in a restaurant. “By doing the detailed concept analysis, psychographic, and demographic information, you really can nail it,” Morgan said. “Then it comes down to, do you have a partner that wants to underwrite the right kind of restaurant there?”
While there is no magic gold formula, James Lin, SVP of restaurants and bars at Kimpton Hotels & Restaurants, agrees it’s imperative to get local feedback. “Getting connected with local tastemakers and key influencers who really understand the market in that specific neighborhood is critical.”
For many hotels, especially in the boutique and lifestyle segments, restaurants are a calling card, Morgan explained. To help chefs gain notoriety, especially a local following, it’s important to invest in marketing and PR efforts as well. “The hard part when you’re underwriting a restaurant is to say how important marketing and PR is, because most people look at that as a money pit,” Morgan said. “But if you do it right, and you’re using the right resources or firms, it can be very successful.”
Hotel owners need to ensure there is enough volume to sustain their restaurant and that the concept is relevant to the location, but “I think you can have a really killer restaurant scene in a seedy hotel in the middle of nowhere as long as there is attention to detail put to it and the right marketing and positioning behind it,” Morgan said.
With the right product and right concept, older hotels can revamp their F&B and make money doing it, Sandoval said. When the InterContinental Miami underwent a multimillion dollar revamp in 2012, Sandoval was tasked with implementing an F&B concept that would draw more people to the 30-year-old hotel. His steakhouse concept Toro Toro boosted restaurant revenue from $2.5 million to $6.5 million.
For a hotel restaurant to succeed, all parties involved—owners, brands, and chefs—need to have buy-in and an ongoing dialogue, Sandoval advised. “You have to make sure it’s a marriage and a partnership.”