The New Hotel Cuisine:
Don't Bite the Brand that Feeds You
by Tejal Rao
May 2007

Classically, the grand hotel restaurant was owned by its hotel, its name synonymous with the hotel’s, if not identical. But as the relationship between hotel restaurant and hotel evolved, so did the deal structure. Hotels eager to turn a profit, or update their image, employed little tactics like adding a street entrance to be more accessible to non-guests, or starting an entertainment-focused restaurant to draw a crowd. But little tactics can only go so far in competing with stand-alone, chef-driven restaurants where the diner makes a personal connection with the chef.

Bob Amick of Concentrics Hospitality, who most recently consulted on the Lobby at Hotel Twelve project, explains why hotels are playing the concept game: “Hotel restaurants have recently realized that they have to compete with free standing restaurants. Now hotels are emphasizing their restaurants and hotels by 'concept-ing' their restaurant or by bringing in high profile restaurateurs to 'concept' the restaurant. Hotels are bringing destination dining into the hotel by bringing in a restaurant and becoming a destination place to eat.”

Think of hotels as the Midwest of the culinary landscape – trends take a little longer to catch on. If we define concept-branded restaurants as chef branded restaurants, this is not a particularly new thing (Ducasse, Robuchon, Nobu, etc.). But in hotels, the concept restaurant is just starting to take off. Here’s how:

The management/licensing deal where the operator acts as manager:
In this deal the chef can get anywhere between 4-7% of the gross revenue. Often when the restaurant is not performing to expectations and the chef isn’t around, the operator becomes disenchanted with the chef. A lack of understanding of each others’ roles, or expectations, makes for a bad situation. The developer will often move to terminate the relationship, ie ditch the chef.

The tenant/partnering deal where they share equity:
In this deal the chef is more intimately involved. The equity can range from 30-50% for the chef, depending on how much money he puts up in the beginning. The management fee will be between 3-6% (which the chef also gets in the management deal above). Once the capital is repaid to the investors then the profits are split based on the equity share and the operator can start to see some profit. But during the repayment of the capital, the chef still gets the management fee. That’s the incentive for the chef to stay involved, ie see the big picture as an investor and as a chef.

Adam Block, Principal of Block & Associates, discusses the concept: “Today chefs are diversifying their roles by being in many places, or lending a brand. What hotel owners and developers really care about is employing a good operator, not so much about whether the chef is there. You could almost say the concept being delivered by the chef is more important than the chef himself.”

Let’s play restaurant word association. Craft…Tom Colicchio. L’Atelier…Joel Robuchon. Spice Market…Jean-Georges. See, it’s easy. When a restaurant lodges itself so deeply into our culinary subconscious that it becomes synonymous with a chef’s name, the chef is successful. When a brand is managed so well that its chef can personalize the concept without negotiating their vision or the vision of their financial partner, everyone wins.

It’s a rare and delicate symbiotic relationship between restaurant, hotel, owner, and management, but Craft, Dallas is proof that it’s possible. Kevin Maxey, Shannon Swindle, Aaron Rodonis and Justin Beam run the cuisine, pastry, wine and cocktail programs, and they run them well by applying their personal visions, respectively. Colicchio’s vision is still carried through, with a build-your-own ingredient-focused menu and East London industrial design, and so is the W Hotel’s. An art installation on the wall reminds you’re in a slick W; its hanging plastic horses and cowboys remind you you’re in Dallas – there’s nothing impersonal or anonymous about the concept, duplicated as it is across the country. Enter through the W’s ultra-modern white lobby or the velvet curtained door on the street, either way the experience will not be the disjointed one you’d expect at the conceptual juncture of two mega-empires.