Can hotel restaurants have a spot on the table next to independently run establishments?
Since I founded Soho Hospitality 11 years ago, we have had our fair share of successes and failures and we run both hotel-operated and independently operated restaurants under our belt. The one thing that is clear in terms of trajectory over the last decade - we have seen a sharp decline in the popularity of hotel operated restaurants and a rise in the success of stand-alone restaurants. So, what can hotel operators and owners do in light of this trend? Is there a secret recipe for ensuring success in a hotel F&B outlet?
Unfortunately, there is none (but please read on!) The truth is that I cannot concoct and share some magical formula to bring hotel dining establishments ahead of independent restaurants in this race to success. What I can do is highlight some critical success factors for hotels to adopt to increase their yield from f&b venues designer going forward.
In order to crack the formula, we must first understand why hotel-owned restaurants have taken a back seat in recent years. Over the last decade or so, consumer behaviour has evolved phenomenally and it all boils down to one thing: People no longer go to restaurants just for the food. There has been a paradigm shift that has moved consumers out of hotel dining establishments and into main street restaurants simply because the latter were better at discerning their tastes and preferences.
Hotel operators continued to thrive from room revenue, using their proven “plug and play” formulas, on the other hand, in F&B, many operators struggled with Restaurant Concept Development that absolutely failed to meet the expectations of consumers due to a lack of focus on F&B offerings at the time. Simply put, operators were too busy planting their flags on the map to bother about keeping their F&B establishment up-to-date with consumer demands. This distraction gave independent restaurant operators a fair chance to compete for market share. Restaurants started popping up at every corner offering unique concepts with a buzzy ambiance, delicious cuisines – offered at a great value for money proposition. Things weren’t going very well for hotel restaurants and in came the Covid-19 pandemic which accelerated the experience trend and demise of these already dying establishments.
Giving credit where it’s due, hotel restaurant operators did seize the opportunity that was brought about by the pandemic using the forcefully imposed hiatus to look within and rethink, retool and reboot their global F&B strategies. Hotel restaurant operators are now engaging and collaborating with independent lifestyle F&B brands to elevate the hotel F&B dining experience. Hotels are now working with turnkey operators who promise to create unique F&B concepts to not only put hotels on the map by increasing their visibility, but also ensuring their bottom lines are impacted positively. With this shift in approach, things could very well be looking up for hotel-based restaurants. However, there is much more work to be done and many lessons still to be learnt. I remain faithful though that the hotel F&B experience will be reborn post-pandemic but in order to perfect this recipe of success, there are some secret ingredients to create the next winning f&b concept at hotels.
- Where you trade will determine how far you will go :
The first and most important decision when addressing F&B in a hotel is Location. Where your hotel trades is an almost sure-shot factor in ensuring that revenue is generated beyond what you make with room and breakfast sales. There is no use in investing in F&B outlets if you are not situated in an area where you can attract external footfall in the disguise of local diners or tourists. The golden rule for success? Location, location, location.
- Don’t overlook the importance of interior design
Once you have settled on a great location, do not make the mistake of overlooking the need to hire a specialist F&B interior designer. Be sure to invest in an interior designer/firm that has a track record of delivering a return of investment (ROI) from other concepts that they have created. Too many times have I seen high profile designers charging gut-wrenching top-dollar for their work forcing owners to spend huge amounts of CapEx on the fit-out without any concern of whether or not the owner can/will get an ROI from the space. Owners should make sure that the interior designers they partner with are financially driven and are going to deliver yield as opposed to over capitalised trophies that look great but fail to deliver on their financial potential. This means that the interior designers that curate beautiful rooms are not necessarily going to design you profitable restaurants if they don’t have deep know how in f&b operations under their belts. Endure that you are seeking the right design partners who are committed to your financial success!
- Hire an f&b specialist
I always tell my clients that there are eight other important elements to consider when creating a winning lifestyle restaurant - food, beverage, cocktails, branding, lighting, uniforms, tabletops and music. Getting a perfect mix of all eight elements in one restaurant can be challenging. To give yourselves a real shot at success, hire a turnkey specialist during the initial stages of the project. I cannot emphasize enough how important it is to work with an F&B specialist who can provide all of the above under one umbrella. Going to one source for all the elements will also create seamlessness of the concept ideation and execution process. At Soho Hospitality, we seldom work on any project that does not include at least 2-3 of the above services. Great F&B restaurants are a culmination of successfully integrating the above elements into a deliciously curated dining experience!
- The customer’s journey into your restaurant starts online.
Following the first three steps above will get you closer to the promised land, but the success of the f&b outlet cannot be achieved without proper digital marketing activation. It is extremely crucial to create awareness for the restaurant by leveraging digital marketing tools to encourage engagement and visibility. Hotels need to engage digital marketing agencies that have a track record of in f&b - creating interest and engagement, utilizing data analytics to reach the target customers, spark their interest and convert them into customers. Hotels needs to work closely with their agencies to develop a detailed marketing plan that includes everything from events, collaborations, influencer marketing and storytelling through videos - and lots of it!
- Don’t forget we are in the business of delivering exceptional service!
There is one final element that ties everything together, the one special ingredient that is truly unique to every restaurant - service. At the core of the business, the hospitality industry, whether hotel or restaurant, regardless of its name, concept, cuisine, location, price range - is in the business of delivering great service. I mention this last because hotel operators have always been good at offering great service standards, it is what makes them who they are and in this game, hands down, they are the true winners. This is one area where independent restaurants could actually learn a thing a two from their hotel counterparts. Hotel restaurant operators should not forget who they are and continue to emulate the standard of service that they are so highly recognised for to ensure customer satisfaction and financial success!
I truly believe that we are going to see a resurgence of exceptional hotel dining experiences in the future which are more aligned to the needs of consumers. I believe hotel operators will not only be able to catch up to the success of independent restaurants but have a pretty good chance of surpassing them! The above points can help owners and operators to increase the visibility of their f&b outlets and positively impact their bottom but at the end of the day the x factor rests with fickle consumers who will ultimately decide whether they want to spend their dollars at your establishment or not!