Some of the industry's biggest names have done it. But like anything else in this business, there are pros and cons to consider.
What do Danny Meyer, Tom Colicchio, and Mario Batali all have in common? They have opened restaurants inside hotels.
More and more established restaurateurs are doing this, and there are pros and cons.
Scott Gerber is the principal and CEO of Gerber Group in New York City. All but one of his restaurants operate out of hotels—in New York, Atlanta, and Santiago, Chile, but over his years in the business, he’s opened many freestanding restaurants, too.
There’s a huge initial advantage to launching a restaurant in a hotel, Gerber says: The hotel takes care of everything. This typically covers all pre-opening costs, including buildout, utilities, interior design, and initial inventory, meaning an operator with no capital investment can open a restaurant. However, once the restaurant is operational, the hotel takes “a very big percentage of the business,” Gerber explains.
Given this, Gerber says he can usually get hotel restaurants off the ground faster than freestanding locations. Under his purview, when opening in a hotel, is marketing, working with contractors, hiring, training, uniforms, and music.
Gerber considers himself a partner with the hotels he works with, and says they usually give him free rein to create the restaurants as he wishes. “Because we have long-term relationships with a lot of these hotels, they have to trust us and they trust we’ll be complementary to their brand.”
Because of this, he designs the restaurants to his company’s style. “They should have the feel of a Gerber restaurant, with great design, food, drink, and music. There should be something about it you can feel.”
However, each restaurant is tailored in design and feel to the city it’s in. He works with the management in each hotel for input into the venues and the food and beverages they offer, even though, he says, “our beverage program is 90 percent the same across the board.”
Also important to Gerber is that the menus he offers consist of 50 percent basics, with comfort foods guests recognize, such as a chicken Caesar salad. Even for breakfast, he says, “We might have an interesting granola or muffin, but it’s important we also have comfort foods because people come to us tired and have been traveling and don’t want to have to think about food.”
Also important to Gerber is pricing. Operators have the options to charge a lot more in hotels, but he doesn’t. “It’s important to attract locals and the only way to get locals is to have street pricing.”
Another very important tenet for him is that all of his restaurants look and feel like a completely integrated part of the hotel. For example, he says, if a customer comes to the bar complaining about the hotel, the bartender will apologize, rather than agreeing that service in the hotel needs some work.