If the hotel isn’t interested in owning and running the restaurant separately, then maybe it shouldn't own the restaurant.

This has been a topic of conversation that I am recently more and more engaged in. It started with a really great post I saw in LinkedIn from my good friend Scot Turner. Scot is the founder and managing director of

Auden Hospitality in London. Scot spent most of his career in the hotel space. Then he shifted to restaurants for a while and is now back to helping hotels think differently about their restaurant operations. He shared some very profound points in his post and it really got me thinking. Later in this column addition, I will share my additional thoughts.

Scot’s post listed several reasons why hotels should think differently about their restaurants other than just as an amenity.

For:

  • Revenue Managers: F&B increases your RevPar
  • Finance Directors: F&B diversifies your revenue streams
  • Sales Directors: F&B creates a destination for your rooms proposition
  • Events Directors: F&B creates an experience to justify higher room cost
  • Rooms Division: F&B creates an amenity to wow your guests
  • HR Director: F&B feeds your employees every day
  • Housekeeping: F&B stocks your mini bars
  • Purchasing Manager: F&B increases your buying power
  • Concierges: F&B provides an in-house place to send guests
  • PR Manager: F&B gives you constant content to share

This viewpoint while still focusing on the hotel as the epicenter, points out some of the benefits that restaurants bring to their hotel. And Scot is making a huge difference in the hotel clients he has by changing the hotel mindset of his clients.

As I said at the beginning of my column, I will now share my insights. I have a slightly different perspective because I spent almost my entire career in free-standing restaurants and a very limited time working in hotel restaurants and bars. So, while I see the value Scot speaks of, I also see that not only do hotels need to view restaurants differently, but they also need to run them differently.

My experience running a restaurant in the hotel had a lot of challenges. I’m in agreement that there is a different mind-set when running a hotel and I saw this first-hand in my experience. However, I also believe there is a different skill set and just like I wouldn’t pretend to know how to run the front desk or housekeeping of a hotel, hoteliers should realize they may not know what restaurant operators know. Here were some of the challenges I saw.

  • Too many coaches, not enough team players
  • Fragmented Leadership
  • Tech between the hotel and the restaurant didn’t interface
  • Lack of Profitability
  • No P&L Accountability
  • Restaurant an amenity rather than its own Profit Center

With that said, if you asked me, I would do things very different. I would either keep the restaurant hotel owned but create separation operationally and financially. First, I would run the restaurant as its own entity. Room charges, room service, guest recovery comps, and VIP amenities would be charged to the hotel and paid to the restaurant. The restaurant would have its own complete P&L and would pay the hotel for leasing the space and utilities.

All operational decisions would be made by the restaurant management team. Payroll, HR, policies, and procedures would all be implemented and monitored by the restaurant management team. The restaurant chef and his team would report to the GM of the restaurant. All tech used by the restaurant would maximize efficiencies for the restaurant rather than accommodating the hotel. All marketing would be local focused.

By doing these things, the restaurant would be run by restaurateurs who are experts in maximizing sales, guest experiences, marketing opportunities, community engagement and profitability. By doing this, measuring performance of the restaurant would be separate from being lumped in and hidden with the hotel’s performance.

If the hotel isn’t interested in owning and running the restaurant separately, then I would recommend not owning the restaurant. Many hotels are now outsourcing their dining experience to expert restaurateurs who are leasing the space. My good friends Gannon Leary and David Wileman are doing just that with their restaurant Gannon’s located in a Marriott property in Nashville. And both the restaurant and hotel are both doing well and are happy with the arrangement.

My advice to hotels, either own the restaurant but let the restaurant GM run it separately from the hotel or lease the space to a restauranteur that will pay a fair rent and will give your hotel guests phenomenal experience. If you decide to own the restaurant in your hotel and you need a restaurateur’s perspective, I recommend you either call my friend Scot Turner, in London or book a call with me to find out how you can bring me in as a Task Force consultant at your hotel by clicking the link below.

https://calendly.com/montesilva/free-one-on-one-30-minute-call-with-monte?back=1&month=2023-12

Editor’s note: This is the 25th article in a new column from restaurant expert Monte Silva. More on the series can be found here. The first story, on Why Underpaying Restaurant Employees is a Recipe for Disaster, is here. The second, on Why Marketing is Not Expensive, is here. The third, on people-centric leadership, is here. The fourth, on Why Working 70-Hour Weeks in Your Restaurant is Not the Answer, is here. The fifth, on How to Provide Hospitality in a High-Tech, Low-Touch World, is here. The sixth, on ‘The Convertible Culture’ in Restaurants, is here. The seventh, on Why the Old P&L Model Has Set Restaurants Up for Failure,’ is here. The eighth, on How to Scale Your Restaurant Business When There is Only One of You, is here. The ninth article, The Secret to Finding and Keeping Great Employees is Not Difficult, is here. The 10th, What Culture Do You Really Want at Your Restaurant?, is here. The 11th, on Your Restaurant Should Serve People, Not Product, is here. The 12th, on Don’t Let Shiny New Toys Distract Your Restaurant from What’s Most Important, is here. The the 13th, on Why Restaurant Value Shouldn’t Be Based on Price, is here. The 14th, on The Case for Hyper-Focused Menus, is here. The 15th, This is How Your Restaurant Will Survive Beyond 3 Years, is here. The 16th, on The Difference Between a Restaurant Coach and Consultant, is here. The 17th, What is a Restaurant Tech Stack, and How Do You Know if You Built the Right One? is here. The 18th, You Can’t Make Someone Accountable if You Haven’t Made Them Responsible, is here. The 19th, Memo to Restaurants: Service and Hospitality are Not the Same Thing, is here. The 20th, Why a Penny Saved in a Restaurant is Not Always a Penny Earned, is here. The 21st, on Why You’re Never Too Old for Greatness, is here. The 22nd, Why Consistency is the Only Way to Keep Your Restaurant Open, is here. The 23rd, onThe Restaurant Industry Doesn’t Have a Labor Shortage—It Has a Leader Shortage, is here. And the 24th, Are Restaurant Employees Today Entitled? is here.

Expert Takes, Feature, Hotel & Lodging