3 ways to make nightlife operations profitable
3 ways to make nightlife operations profitable
30 NOVEMBER 2016 1:30 PM

Make your hotel’s nightclub or cocktail lounge a destination for guests and locals by emphasizing local elements and paying attention to detail. 

LOS ANGELES—A new crop of entertainment venues are proving that nightlife can be profitable for independent hotels by drawing locals and supporting the property’s overall brand message.

It’s all about paying attention to the details that create a good vibe, said speakers on the “Boutique nightlife” panel at the recent Boutique & Lifestyle Leadership Symposium. The most successful spaces, they said, fit well within the hotel’s niche while carving out a unique, loyal customer set.

“Attention to detail in all facets of the overall experience is the most important thing,” said Med Abrous, co-owner of the Spare Room, billed as a “modern-day gaming parlor and cocktail lounge” located in the Hollywood Roosevelt Hotel. For Abrous, that meant doing a lot of research on what customers wanted that the hotel wasn’t necessarily providing.

“We found there was a void between the hotel restaurant and nightclub, and we wanted to create a cocktail lounge that brought people together in a different way,” he said. “So we created a gaming experience with great cocktails, great food and different gathering places.”

Here are three tips from the speakers on how to make nightlife options fun and profitable:

1. Hyper localize
Identifying niches of opportunity between what the hotel offers and entertainment options in the neighborhood is a critical step toward creating a nightlife venue that can keep guests on property and also draw in locals, sources said.

That’s where creating a relevant, locally customized vibe is important, said Michael Lindenbaum, EVP of operations and development for Dream Hotel Group. The New York City-based company is developing Dream Hollywood, its first hotel on the West Coast.

“We don’t pretend New York knows exactly how everything works,” he said. “We’re committed to not exporting something successful in one market to another—that’s a recipe for disaster.”

Abrous said partnerships are a great way to bring local touches to a nightlife venue. His company has worked with entertainment industry icons to design decks of cards, and local shoe designers to create the venue’s bowling shoes.

“In the F&B world, one of the most important things is to be relevant locally because travelers want to live like a local for a couple days,” he said. “It gives you an edge.”

2. Hit the right customer mix
All speakers agreed that in order for nightlife venues to succeed, they must draw in local customers.

“When you’re located in a hotel, if you’re doing it right, 20% of revenue coming from in-house hotel guests is high,” Lindenbaum said. “Especially in primary markets like New York City and L.A., the drivers of revenue have to be locals. If you don’t have them to start, it’s almost impossible to get them.”

The challenge nightlife operators, particularly those in hotels, often have is creating reasons for guests to come in seven nights a week.

Laura Modica, director of nightlife for Edition Hotels, said partnering with “local influencers” is one way to create a buzz at the venue all week long.

“Finding the top bloggers and other social influencers in the area turned everything around for (Edition Chicago) in its second year,” she said. Dealing with the size of a market like Chicago compared to a New York City or a Los Angeles made drawing locals even more important, she said, and bringing in local influencers made a big difference.

“I had to work three times harder to ensure the programming was really targeted to appeal to the local clientele,” she said.

David Kaplan, founder and co-owner of Proprietors, which operates New York City bar Death & Co, said that “creating that seven-nights-a-week reason to go” is critical for a successful nightlife venue. His company is planning a second Death & Co in Denver independent hotel the Ramble, which is set to open in 2017.

“Even with standalone bars that aren’t in hotels, we might have a 20% neighborhood demographic and 80% are destination-driven (tourists),” he said. “So we need to find as many touchpoints as possible to bring people in.”

3. Make operations great
Those touchpoints include great design, a clear mission and committed employees, the panelists agreed.

“We have to give people lots of reasons to come, and identity and branding need to be throughout everything,” Kaplan said. “It has to happen in a 360-degree, almost manicured way. Design is maybe 50% of it; the rest is PR, operations, price point, aesthetic.”

Employees are key as well, speakers said, and especially tough when nightlife jobs require long and late hours.

“It’s really important to hire people who are loyal,” Abrous said. “It’s a hard enough business to be in; you may as well do it with people you like.”

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