You're Opening, Now?!

By Elizabeth Blau Founder & CEO, Blau & Associates | August 23, 2020

Whether your hotel is starting construction of a new concept or you are about to premiere your property's latest restaurant, the project is underway and you have decided to move forward. Under the finest circumstances, the development pipeline is a complex series of timelines, twists and turns; today's unavoidable elephant in the room is an unprecedented global pandemic bringing tragic consequences, single-digit hotel occupancy, and enormous operational challenges.

So, what to do?!

We believe smart operators can and should proceed with thoughtful adaptations to existing plans. When the pandemic emerged as a disruptive global event, the hospitality industry was already in the midst of an evolution. We were already in a collaborative evaluation process with many of our clients. The greatest hoteliers operate under hyper-adaptive conditions and instantly began the process of questioning and innovating.

To be of the utmost value to our clients and our industry, we have developed various guidelines to help navigate these turbulent times. Our approach is an optimistic long-term vision grounded in a methodical assessment of the present and a careful forecast of the near future. At every stage of the project, informed critical decisions, the utmost flexibility, and strategic creativity are of paramount importance. 

Our restaurant development process has evolved over several decades and economic cycles. From the great recession in 2008 to the bull market we were just experiencing, our process maximizes the customer experience and profitably regardless of the economy. In reality, every project is unique and requires adaptation! We therefore took the constant in our methodology and rearranged projects into three categories.

To do so, we had to accept, even embrace that this pandemic has and will continue to require every enterprise in our industry to immediately and consistently evaluate and recalibrate. With this in the forefront of all our decisions, we developed three precise analyses for each of the three categories of projects in varying stages of development.

We see operators working within three time-based phases; those opening immediately (within the next 6 months), those in the planning stage (opening in 6 months – 1 year), and those in development (opening in 1-3+years). Adaptations to construction, design, finance, operations, marketing, technology, service and much more are more vital than ever throughout each stage.

For example, the current consensus is that many existing industry food-service operating standards will become obsolete as a result of this pandemic. One advantage is that certain standards long overdue to expire will finally be forced to do so. A trivial but recognizable illustration (which not so secretly makes me sad) is pouring your own batter in the lobby waffle-iron as part of a complimentary breakfast. This vision certainly no longer delivers the warm, satisfying value proposition it used to.

If Opening in the Next 6 Months…

Some operators are on track to open immediately because they have to. These scenarios, defined by timelines and stages of development, require immediate consideration and adaptation of novel, best-safety practices from around the globe.

The reality is that the investment on properties preparing to open within 6 months is so substantial that the operator either opens in this climate or four-walls and looks towards better times ahead. The former is not financially viable for most, so chances are, the venue is opening now. There are certainly considerations and tactics to enhance opening viability, however local and regional health department guidelines continue to evolve and require constant monitoring with nimble responsiveness. Presently, there is no perfect budgetary adaption to reflect this, however one should be prepared for sales to be only 40-50% of initial projections and liquor sales to be drastically reduced.

We advise looking to enhance financial stability by managing your cash flow first. Review projected margins and budgets YOY while remembering that in a crisis, all YOY analysis takes a back seat to smart cash flow management. Take advantage of any and all programs designed to support the industry during this time. The PPP, labor programs, tax credits and other evolving financial remedies can offer real support.

We strongly recommend you stay up to date with local, regional and federal opportunities as these programs change frequently and require ongoing follow-up. Where relevant, be proactive in landlord negotiations. Seek to establish fair and equitable solutions for both parties and remember that both of you are struggling.

Prior to opening, immediate physical space adaptations are necessary, such as reconfiguring dining room floor-plans to create 6-foot spacing between tables. Explore mobile partitions and creative seating arrangements. Where viable and possible, consider building temporary outdoor dining space if city officials permit. Restaurants are proudly a high-touch business now forced to operate in a "no-touch" world. Keeping guests, staff and servers safe is essential. Technology affords restaurant operators numerous options for adaptation.

QR menu codes are everywhere, smart-phone menu browsing and ordering platforms are popping up more and more, and the use of disposable paper menus can be implemented while transitioning to digital solutions. Streamlining your planned menus, meal periods, and offerings can increase efficiency and decrease labor. While cuts are vital, look to potential revenue opportunities with enhanced take-out, curbside pick-up and delivery options.

One of the surprisingly successful programs we implemented at Honey Salt was to offer small retail sales of grocery-type products unique to the restaurant such as house-made sauces, fresh baked bread, artisanal oils, and more. Alcohol was a prevalent request and at the onset of the shutdown, toilet paper was even on the menu. "Family Meal Kits" to go were another small triumph.  

Honey Salt "Market Place"

In all on-site operations and promotions, it is critical to create clear, positive, branded signage that indicates the restaurant is open, where curbside pick-up is available, what the phone number, website, and social media handles are to assist in ease of ordering, pickup and brand awareness.

Staffing is critical in a crisis, and training will need to address current regulations regarding masks, handwashing, temperature checks, as well as the "house philosophy" about service and hospitality. More than anything else, reinforce the safety concerns for your staff. While initially training your opening staff, train them to work as multi-taskers rather than specialists. This will allow your team to become fluent and adaptive to "do more with less." Look for opportunities to creatively reward your staff in ways other than just with cash. Consider offering financial counseling, meal replacement, flexible scheduling, advice, and other regionally and locally meaningful options.

Pizza Kit-To-Go

Once you are open, welcoming guests becomes essential. Marketing and public relations are critical to communicate your opening which must include assurances about comprehensive measure to assure your guests health and safety.

Aggressive promotions are necessary during this period and marketing tactics such as offers that we have found effective include up to 50% off, buy one hot meal get another meal to take home, or ½ off bottles of wine with purchase of a family meal. And if business continues to be slow, consider making kitchen space available in another part of the hotel as a ghost kitchen for more active outlets offering take-out, delivery and family meal kit service.

We also recommend seeking a partnership with a local charity or community outreach organization, to collaborate with other restaurants in your area. We had a powerful response from our partnership with Delivering with Dignity in our home market of Las Vegas. This program provides a way for restaurants to receive an additional revenue stream and keep staff employed by creating daily meals that are delivered safely to homes of the most vulnerable in our community. In addition to our regular restaurant operations, we were able to utilize our currently unused Private Dining Room and transform it into the staging area to these prep these meals on a daily basis.

Remember that we are in the business of hospitality and making experiences for our guests memorable and fun.  Having guests enter your dining room, no matter how beautifully designed it once was, is not an optimal ascetic at half capacity. One solution we created in response to the seating capacity mandate was to fill empty seats and bar stools with whimsical stuffed animals. 

If You're in the Planning Stage (Opening in 6 Months – 1 Year) …

The planning stage of opening a new restaurant is when your timeline is 6 months – 1 year from opening. There is a silver lining to this stage of restaurant development where you have time to make meaningful adaptations adapt in response to the dynamic landscape and operating future we all face. These silver lining long term changes will reflect opening in 18 months.

Immediate considerations must include a re-evaluation of your proposed business model, staffing models and future revenue streams outside of traditional dining service. Originally, in March 2020, we considered an "after" scenario for our industry that looked similar enough to our existing operating paradigm that we could confidently cling to existing success strategies and tactics. Today, we can say with confidence that many of the successful, creative industry adaptations we have seem emerge during this crisis have become or will become standard in our future. Things that work better, that offer more value or convenience to our guests deserve to stick around.

At this stage of planning, it is essential to embrace the full range of digital technology solutions to maximize a future operation with potentially fewer staff and increased guest's participation, cost management and enhanced "no-touch" health and safety. The swift adoption and implementation of digital technology solutions such as contactless payments, QR code menus, all digital ordering and payments can result in improved operating efficiencies, reduced costs and space optimization.

Private Dining Room transformed into Delivering with Dignity staging area

In hotels, consider self-service options such as high-sterile, pre-packaged grab and go options. The buffet is being creatively re-imagined with served, all-you-can-eat service in luxury properties. Imaginative "no-touch" solutions are emerging worldwide and evidence that the nature of hospitality industry professionals is to welcome, serve and delight guests. Innovations in room service have been under consideration for years. Room service has long been a money losing proposition, especially in full-service luxury hotels. During the pandemic, traditional room service has all but disappeared. Operators in the planning stage could take advantage of the change and embrace package delivery models, touchless ordering / pick- up, and even robotic delivery.

We believe that the focus must be on brand differentiation through experiences rather than complex menus. This will enhance guest's experiences as well as keep labor costs lower.

Where possible, expand outdoor dining, patio spaces, seating and if possible integrate this with food service delivery service strategies. In addition to expanding outdoor seating and dining options, interior considerations must be re-worked. Re-organize floor plans, seating options and if possible build more booths and spaces with natural partitions to increase capacity while maintaining governmental social distance mandates.

Delivering with Dignity meals

If You're in the Development Stage (Opening in 1-3+ Years) …

The decision has been made to proceed with the project and the configurations, considerations, designs and build might be so malleable as to allow for the greatest forethought and redesign to maximize future utilization.

Foremost is the need to explore any possible lease negotiations and finance considerations. Nothing is more important that the costs moving forward into uncertainty.

Recent findings suggest that HVAC and air circulation requirements can have an impactful role in maintaining guest and staff health and safety. Now may be a good time to re-evaluate planned systems and consider investing in an upgrade to these systems to better protect guests and staff.

24-36 months out until opening will allow you to re-consider and re-evaluate the physical configuration of the dining rooms to accommodate more take-out/curbside orders, 6-foot table spacing, and additional booths. Even if the world goes back to normal in two to three years, we have seen that people will always gravitate to the outdoors. Patio and outdoor space should be maximized, and is often available rent free.  Weather protection, misters, fans, and heaters can extend the season. Creative programming can be developed to ensure the areas are used to their full potential.

In the exterior of the build-out, reconsideration of all third party delivery access and pick-up locations can be evaluated and reconfigured. This can also be done to increase and enhance take-out orders and curbside pick-up, as well as additional outdoor guest seating.

Lastly, while it may sound counter-intuitive, consider a smaller footprint for a restaurant space, that will allow you to increase and enhance other low-touch and no-touch guest food service options.

Our team validates that the operational impact of the current pandemic, for both immediate and longer term projects presently in development, who have already made the decision to proceed, to be dynamic and opportunity laden for creative operators. While guest and staff health and safety are paramount, we see that this crisis has brought out the best creative, solution oriented adaptations in our industry. We are encouraged by these worthy improvements, brought about from crisis, and which we believe deserve to become a part of our standard operating future.

Ms. Blau Elizabeth Blau's impressive food service career spans nearly three decades. Widely credited with transforming Las Vegas into a world-class culinary destination, she continues to lead the industry with her innovative and fresh approach to hospitality. Deftly distinguishing fad from trend, irrelevant from significant, Ms. Blau's skilled touch defines her work in Las Vegas and around the world. Ms. Blau parlayed her extensive experience and expertise in the restaurant industry to found Blau & Associates in 2003. She adeptly assembled an impressive team of experts and turned the firm into one of the foremost restaurant development companies in the field. Blau & Associate's client list reads like a Who's Who of hospitality: Celebrity Cruises, Destination Hotels and Resorts, the Kor Group, One and Only Resorts, Montage Resorts, Paragon Gaming, the Ritz Carlton Hotels and Resorts, Trump Casinos, Viceroy Hotels and Resorts and Wynn Resorts, among many others. Ms. Blau also maintains partnerships in three successful Las Vegas ventures. She and her husband, Kim Canteenwalla, launched Society Cafe at Encore in late 2008. Celebrated food critic John Mariani selected the restaurant as one of Esquire magazine's "Best New Restaurants of 2009." Her longstanding friendship with celebrity chef Kerry Simon resulted in their fifth collaboration together; they opened Simon Restaurant & Lounge at Palms Place in 2008 with partner George Maloof. Noted for its whimsical spin on the traditional Sunday brunch, the restaurant emphasizes Simon's flair in the kitchen and Blau's attention to the details. Cathouse at the Luxor Las Vegas is Blau's vision of a glamorous nightlife destination. Equipped with a master's degree from the Cornell School of Hotel Management, Ms. Blau began her career with famed restaurateur Sirio Maccioni. When Maccioni expanded the renowned Le Cirque brand to Las Vegas, her insightful work on the project caught the attention of Stephen Wynn, at that time, CEO of Mirage Resorts, Inc. Wynn then personally recruited Ms. Blau to fulfill his vision of revolutionizing the food and beverage operations at his newest venture: the $1.6 billion Bellagio. Elizabeth Blau can be contacted at +1 702-256-1665 or elizabeth@elizabethblau.com Please visit http://www.elizabethblau.com for more information. Extended Biography

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If any provision(s) of this Agreement is held by a court of competent jurisdiction to be contrary to law, then such provision(s) shall be construed, as nearly as possible, to reflect the intentions of the parties with the other provisions remaining in full force and effect. HotelExecutive's failure to exercise or enforce any right or provision of this Agreement shall not constitute a waiver of such right or provision unless acknowledged and agreed to by HotelExecutive in writing. The section titles in this Agreement are solely used for the convenience of the parties and have no legal or contractual significance. This Agreement may be assigned in whole or in part by HotelExecutive. This Agreement may not be assigned in any manner by you without the express, prior written permission of HotelExecutive.

Any and all disputes or controversies of any kind, including but not limited to any performance, duty, obligation or liability arising under or related to this Agreement which are not first resolved informally, shall be determined by binding arbitration in San Francisco, California, in accordance with the rules of the American Arbitration Association. The final award in any such arbitration proceeding shall be subject to entry as a judgment by any court or competent jurisdiction, provided that such judgment does not conflict with the terms and provisions hereof. The jurisdiction of the arbiter (or arbiters) with respect to legal matters shall be limited only by the statutory and common law of the State of California and the United States.

Notwithstanding the foregoing, any and all disputes, which the parties cannot informally resolve, regarding the scope of issues or matter with the jurisdiction of the arbitrator, shall be resolved by a separate dispute resolution process whereby HotelExecutive, in its sole discretion shall elect the dispute to be resolved by either (1) a court of competent jurisdiction in the State of California or (2) a panel of three new arbitrators.

This Agreement shall be governed by and construed in accordance with the laws of the State of California notwithstanding any conflict of laws provisions. You and HotelExecutive agree that the venue for all legal disputes, controversies, actions of any kind arising under or related to this Agreement shall be San Francisco, California. You and HotelExecutive further agree that in case of any litigation regarding this Agreement, you irrevocably and unconditionally (i) consent to submit to the exclusive jurisdiction of the state and federal courts in the County of San Francisco, California for any litigation or dispute arising out of or relating to this Agreement, (ii) agree not to commence any litigation arising out of or relating to this Agreement except in the California Courts, (iii) agree not to plead or claim that such litigation brought therein has been brought in an inconvenient forum, and (iv) agree the California Courts represent the exclusive jurisdiction for all litigation relating to this Agreement.

11. MEMBERSHIP FEES

Hotel Business Review Subscriptions

If you choose to purchase a subscription, member subscription payments can be made in U.S. Dollars, as well as a variety of international currencies. Membership terms are Annual Recurring, and Monthly Recurring. The Annual Recurring subscription is an annual commitment and subscribers will be charged each consecutive billing cycle. Annual Recurring subscriptions can be cancelled after the first billing cycle and within 30-days of the billing date for a full refund. Monthly Recurring subscriptions are ongoing and subscribers will be charged each consecutive monthly billing cycle. Monthly Recurring subscriptions can be cancelled after the first month and within 7 days of the monthly billing cycle for a full refund.

12. PAYMENT AUTHORIZATION

Payment for the services provided to you in, at, through or in association with HotelExecutive may be made by automatic credit card, debit card, direct debit, bankwire or Paypal and other approved payment means offered in, at, through or in association with HotelExecutive, and you hereby authorize HotelExecutive and its agents to transact such payments on your behalf.

You hereby authorize HotelExecutive's Internet Payment Service Provider to charge your credit card to pay for your membership to HotelExecutive. You further authorize HotelExecutive's Internet Payment Service Provider to charge your credit card for any and all purchases of products, services in association with HotelExecutive. You agree to be personally liable for all charges incurred by you in association with your access or other use of any content provided by HotelExecutive or any third party in association with HotelExecutive. You acknowledge and agree that your liability for all such charges shall continue after termination of your access or any type of membership arrangement with HotelExecutive.

In the event that you have chosen to have your membership automatically rebilled, unless and until you notify HotelExecutive that you wish to cancel or terminate your membership to HotelExecutive, you hereby agree and authorize HotelExecutive's Internet Payment Service Provider to automatically renew your membership to HotelExecutive on a continuing basis and to charge your credit card (or other payment means you have selected) to pay for the ongoing cost of your membership. You hereby further authorize HotelExecutive's Internet Payment Service Provider to charge your credit card (or other approved payment means you have selected) for any and all purchases of products, services and entertainment provided to in, at, through or in association with HotelExecutive.

13. PRIVACY POLICY

The following is the Privacy Policy for HotelExecutive

We can be reached via telephone, email, or online at our contact page. When you visit our site we do not log any information regarding your domain or email address. Information Sharing: We do not share user information with any third parties other than via press release distribution as described below.

Hotel Newswire is a newswire service that distributes press releases on behalf of our users. If you decide to submit a press release for distribution through our system we will transmit your entire press release including any personal information therein contained to our media contacts and online distribution points including search engines. This is the only redistribution of your information that we engage in. Your submission of press releases through our system indicates consent with this policy. The information we collect during your registration process is used to notify users about updates to our service and inform users of any special events hosted by Hotel Newswire. This information is not shared with other organizations for commercial or non-commercial purposes.

Cookies: Our system requires the use of cookies to enable the user to log back into our website to access information from the newswire, without having to log in each time using the required username and password.

If you do not want to receive email from us in the future, please let us know by following instructions included in our communication with you. Users who supply us with telephone numbers online may receive telephone contact from us regarding their account, or informing them of new products and services available on the HotelExecutive website. If you do not wish to receive such telephone calls, please edit your account and remove your phone number from your account profile. This can be done from your user account menu.

Ad Servers: We do not partner with or have any relationship with any ad server companies. From time to time, we may use customer information for new uses not previously disclosed in our privacy notice. If our information practices change at any time, we will post the policy changes to our website to notify you of these changes and provide you with the ability to opt out of these new uses. If you are concerned about how your information is used, you should check back at our website periodically.

Upon request we provide site visitors with access to all information (including proprietary information) that we maintain about them. Users can access this information by logging in to their account.

Security: We always use industry-standard encryption technologies while transferring and receiving user data exchanged with our site. We have appropriate security measures in place in our physical facilities to protect against the loss, misuse, or alteration of information that we have collected from you on our site. We do not store credit card information in our systems.

If you feel that this site is not following its stated information policy, you may contact us.

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Coming up in October 2020...

Revenue Management: Maximizing Profit

Hotel Revenue Management continues to evolve at a blistering pace. Driven by technological innovation and new distribution channels, there are some dynamic opportunities for expansion in this fast-growing field. The technology is primarily designed to help revenue managers further refine their operations and pricing models to maximize hotel profit. For example, hotels can't be all things to all people, so a key strategy is to precisely identify their target audience. By employing geo-targeting techniques and analyzing behavior such as previous bookings, on-property purchases and online shopping practices, there is an increased capability to define guest demographics. By segmenting customers in more specific ways, hotels are able to create more personalized experiences which, in turn, allow managers to optimize their room rates. It is also an effective way to fulfill the unique needs and preferences of the individual. Another methodology is to consistently monitor the competition's pricing strategies. There are software tools that analyze a competitor's current rates, and then allow a hotel to make its own pricing adjustments. It is also a useful means to conduct forecasting models. Other technologies that are being integrated into a revenue manager's toolkit include Artificial Intelligence in the form of automated algorithms, and Voice Recognition (VR) for data inquiries, rate changes, and booking behavior. Predictive and analytic software programs are also being leveraged to provide more forward-looking data, instead of the usual reliance on historical performance. These metrics allow managers to be more proactive - rather than reactive - with their revenue strategy. The October issue of the Hotel Business Review will examine these developments and report on how some leading hotels are executing their revenue management strategies.