More hotel companies are seeing the importance of the right F&B offering, as hotel chains start to play catch-up and labor continues to be a growing challenge, according to panelists at BLLA’s Stay Boutique conference.
NEW YORK—During a discussion at the Boutique & Lifestyle Lodging Association’s Stay Boutique Investment Conference, hospitality executives and consultants emphasized the value a hotel F&B outlet can provide a hotel’s public relations effort.
Panel members also noted how branded hotels are aping boutique properties by putting a larger emphasis on unique restaurants or bars, and warned against changing strategies often to follow trends.
Gerber Group CEO Scott Gerber, whose company was credited by moderator and cb5 Hospitality Consulting Principal Jody Pennette for its industry-changing work at its Sky Bar at the Mondrian Los Angeles, recalled how people would book rooms at the hotel largely to have guaranteed access to the bar.
“It’s not about having the velvet rope, but if you’re at [bar] capacity and you’re staying at the hotel, you’re going to get in,” said Gerber, whose company’s recent work includes three outlets at the new TWA Hotel at New York’s John F. Kennedy International Airport. “Although we’re a third party, we always operate as a partner in the hotel.”
“There are a lot of hotels driven by the restaurant, whether its [Andre] Balazs or Ian [Schrager] or Kimpton,” added APICII co-founder Tom Dillon, whose company’s projects include Rick’s at the recently reopened Hotel Figueroa in Los Angeles and Burgers & Bourbon at Montage Deer Valley in Colorado. “A 150-room hotel may have 100 people checking in during a day. A bar may have 500 people.”
Such relevance can extend outside the boundaries of a hotel and into a neighborhood that may evolve for the better because of the addition of a hotel with a popular bar or restaurant, said Heyer Performance Managing Director Julia Heyer, whose consulting work includes Great Northern Food Hall at New York’s Grand Central Station and Chicago’s Latincity.
“If you look at [New York district] NoMad 15 years ago, there was nothing there,” Heyer said, referencing area hotel pioneers such as the Ace Hotel. “They changed the landscape around it because the locals were going to the bars and restaurants.”
Achieving such a buzz is becoming more challenging, however, because of a labor market constrained by a combination of low unemployment rates and the Trump Administration’s immigration policies and proposals, panelists said.
“We have a president who has you going back to check everyone who’s worked for you for 25 years to see if their IDs are matching up, and if they don’t, you’ve got a real liability,” Gerber said. “We have a taco place, and I don’t think I have one person from Mexico working there. They’re all freaked out.”
“In Nashville, half the restaurants can’t open a full dining room” because of labor shortages, Pennette said. “In the service industry, we’re running out of inventory.”
Such trends and issues continue to become more relevant as guests spend more on drinks and meals. Last year, U.S. hotel food-and-beverage revenue per occupied room (F&B RevPOR) rose 2.7% to almost $113, with beverage revenue per occupied room advancing 4.2%, STR said in a February report. Hotels’ restaurant/bar revenue and catering/banquets revenue per occupied room last year rose 3% and 3.4%, respectively, more than offsetting a 4.2% drop in in-room dining revenue per occupied room. Among U.S. cities, hotels in New York, San Francisco, San Diego and Miami had the largest year-over-year jumps in F&B RevPOR. STR is the parent company of Hotel News Now.
With restaurants and bars having an increasing impact on a hotel’s bottom line, the panelists warned against chasing trends for the sake of short-term buzz and emphasized mastering the basics. Gerber estimated that 98% of his bar program remains in place across his establishments.
“If you have an ice cube with a stencil but the Negroni around it is mediocre, that’s a problem,” Heyer said.
“If it takes my bartender five minutes to make a drink, they won’t be bartending for me for long,” Gerber added.
The growing relevance of a popular restaurant or bar within a hotel is being reflected by the fact that more chain-hotel parents are seeking out third-party food and beverage operators to create and operate unique outlets that will draw guests and locals alike.
Gerber noted that, whereas his company’s earlier work was symbolized by places such as the Mondrian Los Angeles’s Sky Bar, his more recent work has included Mr. Purple at InterContinental Hotel Group’s Hotel Indigo Lower East Side New York and 12 Stories at IHG’s InterContinental Washington D.C. – The Wharf.
“There’s a renewed sense of excitement and press-worthiness of a food and beverage product,” said Jay Coldren, managing director at Streetsense’s Eat + Drink division. “You won’t fix a hotel with a brand-spanking-new restaurant, but you’ll help give it relevance.”