Mr. Escoffier

Food & Beverage

Free Standing Food Service Facilities

By Marcel Escoffier, Associate Professor, FIU School of Hospitality Management

You may remember the old saying that the more things change the more they remain the same. Given the hundreds of thousands of hotel operations throughout the United States, you can bet that whatever new ideas are reported on in the press really have been done before.

I have just returned from an all too brief trip to Vienna, Austria, where a very savvy hotel owner about one hundred years ago realized that his hotel was too small to accommodate the crowds of late night customers in search of an after theater light meal. His solution? Build dining facilities with expanded seating out on the sidewalks surrounding the property. He also started the idea of creating a signature dish which people could purchase and take home with them or give to friends who had invited them over for a party. The hotel? Does Sacher ring a bell? Google it and see a very well done website with a nice recap of its official corporate history.

My theme for this article concerns free standing facilities; food and beverage facilities that are outside the walls of the main hotel building. (Or, at least, architecturally, appearing to be separate from the hotel.) When proposing this topic to the Editor, I had in mind a continuation and updating of a trend started in the 1950's by the Holiday Inn chain of building properties on sites that were also occupied by a gas station and a family style restaurant (such as a Denny's or Bob's Big Boy.) This trend was in response to the burgeoning interstate highway system and the opportunities it provided to realize the Holiday Inn's corporate expansion strategies.

Other groups of strategic visionaries attempted to tap into the common American hotel guest's desire to eat off premise while still retaining the guest revenue. Primarily found in the mega resorts that flourished in Hawaii during the late 1960's through the 1990's, these huge properties took a theme from the Disney resorts and constructed out-parcel food service facilities which had the look and feel of an independent operation. There was a blurring of the distinction between property-owned versus outsourced operations, but many of the properties developed by Chris Hemmiter and operated by Hyatt are examples of this type of operational design.

The advantage here was that the food service facility drew business not just from the guests staying at the Hyatt, but also from guests staying at other hotels within the resort area. The Hyatt Kaanapali on Maui is one good example of this cross-property guest activity. The small property I managed on Miami Beach had a similar experience. We opened a burger / bar shack (literally a shack) out by the beach. It was an instant success. We had 115 rooms in the hotel and frequently served 800 or more orders for hamburgers, etc. out at the beach. Clearly those visitors roaming up and down the beach area were stopping at our little facility.

As the lodging industry matured, even more creative ways of making the food service stand out from the hotel were invented. Las Vegas has several outside operations. The restaurant in the model of the Eifel Tower is one good example. No doubt that it stands out from the hotel surrounding it, and no doubt that many visitors to the city eat there while staying elsewhere.

But less-grand properties have facilities that are outside the main structure. Oceanside or lakeside dining rooms are to be found all over the country. Facilities that can be next to or in sight of major visual locations offer hotel guests a significant vacation experience while keeping them and their dollars on-site.

Many hotels are designed along a "cluster" model with one or more buildings surrounding some central recreational activity. A food service operation here often loses the opportunity to attract patronage from off premise, but can be an integral part of the guest experience. Poolside bar / snack stands can generate a great deal of activity. The old Key Biscayne Hotel (Richard Nixon's favorite watering hole) did well over $1 million dollars a year (in 2000 dollars) in food and beverage sales at its ocean from bar / lounge. Next door a hotel had a "Tennis Club" (a separate food service facility out by the tennis courts) that was really another local watering hole that did an incredible lunch business.

One last example of doing this right are the resorts at Disney in Orlando. The various resorts around the monorail which loops between the parking lots and the parks have several excellent examples of free standing food service facilities that offer views of the lake, park, fireworks display and even a floating light show. Guests staying within the hotels, or on the property in general dine in these free standing venues. Given the high guest counts, it is difficult to measure how much additional guest traffic the free standing units attract over what would be the case were they to be within the main hotel structures, but I would guess that these free standing units are attractions in their own right.

The question can be raised, "can a hotel brand a food service facility that would be a popular free standing restaurant in its own right?" In other words would a hotel, let's call it the Grand Imperial Palace Resort and Club, build a restaurant that is away from the hotel itself that would be popular with the general public? Like most questions in business, the proper response is, "It depends."

Obviously the proposed operation would have to be affiliated with or branded by some hotel operation that is easily recognizable by the public. Think of this criteria as a reversal of the Hard Rock Hotels that is a lodging facility under the brand of a recognizable restaurant chain.

Legendary hotel properties would be a natural for this kind of expansion. The Broadmore hotel in the foothills near Colorado Springs could easily open a free standing facility as part of a revitalization of downtown Colorado Springs. Imagine what would happen were Disney to brand its Polynesian Resort operation and take it into the nation's hinterlands. There are numerous other opportunities as well.

The Boca Hotel and Club, again, on the outskirts of a city, could consider opening a facility in Boca Raton. In that operation's case, they already run remote food service operations on a satellite property that is on the ocean a half mile or so away from the main resort property. A similar situation exists at Opreland and in many other locations throughout the United States. Servicing far flung food service operations prior to the expansion I propose would help these hotels to more along the learning curve that is inevitable when management moves an operation off premise.

A second consideration would be the current operational strategy of the hotel property. In other words; does the senior management have the enthusiasm and energy it would take to open such a remote food service facility? An honest assessment needs to be made. Many hotel chains have resorted to the "thin management" school of thought. Not referring to the manager's weight, "thin management" means the reduction in the overall managerial staff. The recent buyout of Hilton Hotels, for example, will probably result in the elimination of scores of assistant food and beverage managers, beverage managers, chief stewards, and others in middle-management positions system-wide. With the added burden of managing the current operations with a reduced cadre of managers, it might be impossible to devote the managerial attention that opening a new facility would entail.

Operationally, there are some impediments to opening a free standing facility. The hotel food service facilities are, in most cases, geared to restaurant style service along with the traditional banquet operation. Banquet food, which is produced hours or even days prior to the event, would not be appropriate in a free standing facility (unless that facility is marketed as a banquet or buffet / cafeteria operation.) Rather, the hotel kitchens need to act as a central commissary that pre-prepares food for distribution to the free standing facility. (Like a central commissary supplies food to any chain restaurant). The free standing facility then cooks the food to order, just like in the restaurants located inside the hotel itself.

There can be an advantage in this regard as well. If the concept becomes at all successful, there are branding opportunities for selling foods outside the restaurant or hotel. Would, for example, the Ritz Carlton brand be able to sell a line of gourmet foods nationwide? I think so. A central commissary producing Ritz Carlton brand foods could be geared up to supply the national food market as well.

Another concern is that the capital requirements for a free standing operation could be high. Fine dining restaurants are currently being built in the major U.S. cities for $4 million dollars or more. When coupled with the pre-opening advertising and promotion budgets and other monetary necessities, it may be a better strategic decision to refurbish the existing hotel facilities than to build a free standing facility.

Like many hotel projects, the off premise facility could be financed as a part of a major development. An expanding city like Coral Gables, Florida could encourage a developer to include a hotel operated food service facility as a destination tenant in a residential or even office development. Many smaller cities throughout the country offer the similar opportunities.

Would I, as a customer, select a hotel branded restaurant to dine in? Well, as a hotelier of some years, I guess that I am not the best potential customer to ask. But I can clearly see that several trendy or classic hotel names might be the basis for a very popular chain of restaurants that could be quite successful with the general public. Might a South Beach hotel named restaurant be popular in Minneapolis? Well, it might. Could people in Boston be inspired to dine at a Waldorf Astoria restaurant? They might. Going one step further, might a Hawaii hotel brand name sell the tropical experience in Arizona? Hum...

As with all of my columns, I am hoping to direct my ideas toward a broad range of readers. F+B directors need to correctly assess their needs and take away from my column ideas that can benefit them. A small hotel in rural Vermont has little chance of creating a nation-wide brand. But a nice food service facility located downtown in the village is something to consider. F+B directors in large operations can take away ideas from this column that could be very successful. Downtown hotel properties should consider "free standing" (will, leased within another building) facilities that help expand their business client centered operations. Resort operators should look at ways to capture the roaming hordes of visitors looking for a place to eat. And those few of you who are fortunate enough to be in hotels with names that everyone knows may want to re-read the last few paragraphs.

There is something here for every operation to consider. Expanding food service outside of the hotel building itself has been a successful strategy used by many operators and can be successful in your operation as well.

Marcel R. Escoffier was an Associate Professor at the School of Hospitality Management Florida International University. He had over thirty years experience in hotels and restaurants throughout the U.S. Unfortunately, Mr. Escoffier passed away in September, 2009. We at HotelExecutive.com would like to continue publishing Marcel's articles on our website as a tribute to this brilliant man. The one thing we loved most about him most was his sense of humor. He would always make light of any serious situation, and this was reflected often in the articles he wrote for the Hotel Business Review. Mr. Escoffier can be contacted at editor@hotelexecutive.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.