Can a Hotel Restaurant make money? The view of an Entrepreneur.
Great views by Adelina Barphe
Partner Mocinno International
Adelina Barphe is also Vice President – International Food & Beverage Association
This interview is a fragment of the book 'A Hotelier's Mind, Setting Strategy for the Future' by Jeroen Gulickx. Available on Amazon.
How do you believe a stand-alone restaurant is run differently from those within a Hotel?
Seriously, this is a fascinating question and one of my favorite research topics as well! How an independent restaurant is run differently has always been a hot controversial subject. As an entrepreneur and restaurateur, with a first-hand experience in both operating structures, I may describe both as "Phenomenally alike, yet totally different!" The stand-alone and a hotel restaurant are two different species living and operating in an entirely different ecosystem. We could analyze this forever, but let's focus only on their striking differences such as management, mindset, available resources, and their operating environment and structure.
To begin with, running a stand-alone restaurant requires different management style and skills from running a hotel restaurant.
After all, hotels and restaurants are two different businesses, with different operations and visions. When it comes to management styles, of course, there is no right or wrong, it clearly depends on the circumstances and situation you have to manage. However, it seems that flexibility and adaptability in management plays a great role in the bottom line success. Especially in such challenging field as Food & Beverage, where everyone, from personnel to management team, will have to keep engaged and committed to achieving results.
Like most entrepreneurs, the successful restaurateurs have an undying passion and enthusiasm for their business, and most importantly the spirit to do whatever is required to survive and achieve sustainability. They are warriors, with a strong sense of purpose, forward thinking, creative, willing to take risks and try new things, as opposed to F&B management in a hotel who are not necessarily equipped with these entrepreneurial skills and mindset. Even if paradoxically someone would have that kind of mentality would be nearly impossible to create and influence changes within a hotel operation framework.
Specifically, hotel departments and corporate brands have a tendency to impose rigid standardized procedures and behavior. Couple this, with the reporting structure and the centralization of decision-making over just about everything, and we end up with a management style that has a slow reaction time, is inflexible, and unwilling to change. A system which is strictly based on SOP and rule enforcement tends to frustrate and disengage highly skilled and creative employees who strongly resent micromanaging. How far can you go without engagement, creativity, and motivation? Guests' expectations and employees' needs are in a fast-track change in today's environment. Without taking into account these changes, management is setting up to fail.
On the other hand, the management of a stand-alone restaurant is clearly interdependent with the mindset and vision of the entrepreneur. Communicating and sharing this vision on a daily basis keeps everyone aligned and committed. Employees' participation and contribution are much higher. Management focuses more on initiatives and adaptability, giving the team the flexibility needed to try new ways of doing things and experiment.
This ability to change, or be changed means everything in grasping new trends and staying ahead of the game.
Moreover, when looking it from a resources perspective, differences are huge.
Hotels have inexhaustible gifts, a real horn of plenty, for their outlets. Their restaurants have exceptional resources for marketing and public relations, their advertising and promotions reach national and international scales, the expenditures and operating cost, along with services like cleaning and maintenance, on the other hand, are shared with the hotel, making it considerably cheaper to run. They enjoy preferential pricing from suppliers and vendors; they attract a higher quality workforce, and the list could go on and on.
Despite all this, the F&B department remains the "Achilles’ Heel" in most hotels. This obviously raises the question why? Where does the responsibility lie? The truth is that if a restaurant in the real world is not successful and profitable, the whole responsibility lies with the manager or in many cases the owner. That is not the case at hotels. The bad F&B results in a hotel are somehow chopped and sliced in many pieces along the management team. This tendency to feather off the bad results and accept speculations is one of most important factor why this has always been the case with F&B departments. Poor management and operational decision, waste and mishandling are overlooked under the security umbrella of the hotel property and rooms division revenue. Therefore, it actually is the mentality and the comfort zone syndrome that plays the most decisive role here.
It would not be far from reality if we resembled the ecosystem of a stand-alone and a hotel restaurant with the difference between wild animals and domestic. Just imagine their ecosystems. The wild animals running in the wild, free and independent; hunt and fight for their food every day; prepared for the worst; crazy adaptable to external conditions and resources' availability; learn to survive by themselves and cope with difficult conditions and circumstances. On the contrary, domestic animals live in a totally protected and controlled environment; entirely dependent and conformed to their ecosystem where humans provide them with their basic needs, shelter, food, medical care, and more. Altogether, such diversification in the operating environments affects management and the overall attitude of the business.
So getting back to the point, the stand-alone restaurant has to be financially sustainable by itself, or get out of business! As simple as that! It does not have the resources or the "big brother's" support. It has to establish a strong competitive advantage, get beyond conventional approaches, to adapt, adjust and be flexible, to go off mainstream and find creative ways to stay successful and profitable. So yes, this mentality is huge, and it affects everything, and not only the way of managing it. Ironically enough, most hotel brands do not even consider applicants that their experience comes from outside the hotel breeding ecosystem. That is totally absurd! An F&B manager who profitably runs a stand-alone restaurant has a lot more to offer in a hotel if he manages to tackle the system. Even more, hotel operators and F&B management still consider food and beverage outlets as hotel accessories with no particular identity, when in fact restaurateurs and most people consider restaurants as living and breathing characters with their own unique spirit. That generic feeling in hotels reflects on the guest experience and satisfaction! It also remains the primary reason why hotel guests search for that unique experience outside the hotel. Although the last decade we have seen an evolving and increasing trend in the F&B departments through the involvement of restaurateurs in managing hotel restaurants. Many brands and boutique hotels are finally treating their outlets as “stand-alone” destinations. But that is another chapter.
In conclusion, independent restaurants may lack significant resources but in the end, all comes down to the extraordinary passion and perseverance to make it happen. The restaurant industry, unlike F&B outlets within hotels, has embraced over time new and creative approaches, leading the way to an exciting and innovative dining experience. Comparatively, hotel F&Bs have a whole multidimensional mechanism, tools and resources to support them, though, not enough authority to influence changes, not enough power to move that dinosaur! As long as hotel restaurants would be like dinosaurs, nobody will ever manage to move them, at least not fast enough. Unless they change and adapt, unless they are willing to become panthers, jaguars, leopards, or antelopes, making space for these creatures to thrive, it would be unfeasible to get hands on, and stay on the cutting edge of the industry.