Emerging From A Pandemic: Issues Impacting Hotel Restaurants

By Matias Pesce CEO, V&E Restaurant Group

When someone asks me what the difference is in terms of operations between a restaurant that is based in a hotel, versus one located in a shopping mall or even just another place on the street, the short answer is honestly nothing.

This is exactly the case of Vida & Estilo Restaurant Group, where we have multiple brands and concepts located both inside and outside of hotels. This includes the Cafe Americano brand, a diner concept serving American fare with a Latin twist, with four full-service restaurants currently in operation at hotels in Las Vegas (at Caesars Palace and the Paris Hotel) as well as Miami,  Florida (in the Hotel Victor on Ocean Drive and Redbury South Beach Hotel on Collins Avenue).

As of 2021, the Vida & Estilo Group, which translates to Lifestyle in English, has 61% of its total operations (which accounts for 18 restaurants)  based in hotels.

At a glance, in order to launch and maintain a successful restaurant inside of a hotel you need a combination of experience as well as factors including:

  • offering an attractive menu variety including an all day breakfast and/or brunch option;
  • being able to maintain a fluid 24/7 culinary operation including room service;
  • creating an overall look and feel within the venue to establish the desired ambiance;

Any restaurant business model can be well suited for a hotel based operation depending on the hotel’s needs. One such model that highly compliments most hotel operations very well  are high traffic venues with 24hour offerings, and 60% of those being focused on breakfast as well as the ability to also provide room service to guests staying in the hotel.

A good breakfast offering is absolutely one of the most valued amenities searched for by travelers when selecting a hotel for a leisure vacation or even a quick business  trip. The comfort of having a reliable and delicious meal waiting for guests steps away from their room or just a phone call away via room service is a huge amenity after a long day of sightseeing or at the end of a business day.

Then of course when you add to that the ability of serving breakfast items throughout the day with an all day breakfast model, plus being able to have dinner at any time with a late-night dining menu or a 24-hour full service operation, the formula for a successful hotel resident restaurant  blends together with the hotel’s culinary goals perfectly.

In terms of hospitality food and beverage protocols, both hotel and resident restaurants must adhere to most, if not all, of exactly the same standards. Going back to room service, that is a particular area that exists almost exclusively in hotel restaurants or restaurants that anchor hotel lobbies, like Cafe Americano for example. Not to mention that the room occupancy projections provided by the hotel have a direct impact on the staffing and planning for every hotel restaurant’s daily operations.

Looking back before the pandemic delivery services used to account for between 15% to 20% of any given full service restaurant. But as everything shifted, the off-premise delivery components, which was already a growing segment, played a huge role  during the pandemic, as all restaurants and hotels closed for dine-in activities. As of today, it has continued to grow exponentially, and there is no question that it is here to stay, though no secret is that the hospitality industry as a whole is not only recovering but perhaps, maybe a better choice of words would be to say that the industry is in resurgence mode.

For hotel restaurants, third party delivery services may not be a major influencer or driver, while take-out might be the bigger driver in combination with or as an extension to the room service/room charge variant.

Back to the business model for a hotel resident restaurant, and taking the example of Cafe Americano, which launched three new locations during the pandemic. This model offers 24-hour operations and anchors the hotel’s lobby serving all day brunch in areas of no less than 4,000/5,000 square feet with a seating capacity of 250-300 guests and an estimate of 20 MD year sales.

In March of 2020, life as we all know it completely changed due to COVID-19. Governments around the world declared public health emergencies and here in the United States those were followed by an Executive Order less than a month later restricting activities to those deemed as essential services. Hotels announced that they were closing and for many businesses like V&E Restaurant Group, and its hotel resident restaurants, as well as for so many similar operators in cities across the globe, there was only one thing to do, shut down all operations.

About six months into the pandemic, on September 25, 2020, the Florida governor issued an order that effectively nullified public health measures and prohibited local governments from imposing fines or shutting down businesses for violations of mask mandates. Restaurants were also able to immediately reopen at full capacity and the Governor’s order restricted local governments from ordering restaurants to operate at less than half-capacity.

For any hotel resident restaurant with expansion plans, looking back again at the example of Cafe Americano, the first two months of 2020 would have represented the official opening of the second location at the Paris Hotel in Las Vegas. This only occurred later in June 2020 when the hotel announced the reopening of restaurants and bars, as well as the pool, casino floor, and more.

The restaurant at the Paris Hotel in Las Vegas initially opened from 6 a.m. to noon daily. A few months later, the operating hours extended to 11 p.m. and eventually to the restaurant model’s full 24 hours as initially planned. This hotel’s 95,000 square foot casino fully reopened in May 2021.

Caesars Palace, an 85 acre resort on the Las Vegas Strip with six towers and about 4,000 rooms , is the home of the first operating Cafe Americano, which opened inFebruary 2015 in partnership with Caesars Entertainment. Back in June 2020, the hotel announced that they were also reopening post-COVID closure with limited operations. It was only later in May 2021 that the resort announced that their casinos are back to full capacity following the reopening  and not only fully but without social distancing. At this particular location the Terraza area, by the main lobby entrance, is one of the best and well equipped outdoor dining areas in the whole town, which is where Cafe Americano is based.

Back in Miami Beach, Florida, hospitality groups like V&E Restaurant Group and perhaps others have been dealing with a slightly different situation that has greatly impacted other expansion opportunities. The Magic City has been reportedly emerging as a new tech hub, as seen in the media recently.

Throughout 2020 and continuing into 2021 some very high-profile investors moved to South Florida, and Miami started to get national recognition as a great place to achieve maximum work-life balance. Also more and more people from shut down cities such as San Francisco and New York, especially those from the tech world started to make the move and relocate to the Miami area. Millionaires, billionaires, well known finance firms and celebrities moved to the city with the best weather, no state income tax, ocean front properties and business friendly political leaders.

Opening Cafe Americano in Miami Beach, where V&E Restaurant Group also operates over 10 other restaurant brands, has been something that we have been considering for a while, particularly for the breakfast segment’s lack of variety in the city.

The opening of both Cafe Americano locations in Miami Beach, both at the Hotel Victor on Ocean Drive, which has 91 hotel rooms and the boutique Redbury South Beach Hotel on Collins Avenue, which has 69 rooms, had been planned for 2020, but then paused due to the pandemic and ultimately supported by the exceptional hotel partnerships with both Victor Hotel Management Company and SBE Entertainment Group.

Headlines listing Miami as the next hot tech hub as well as stories about Miami being a great place to do business absolutely enhanced these two openings and have positively impacted sales, though Miami Beach restrictions combined by current staffing shortage crisis have not permitted the Miami restaurant concepts to run under the 24 hour model.

The bottom line is that when looking at potential issues impacting restaurants that reside in hotels versus non residency, we can say that there are no significant differences. One thing  to point out is that adherence to hotel food and beverage protocols is something of great importance for resident restaurants, though these protocols are not entirely different from any food and beverage protocols found in hospitality services in general.

At all times, hygiene and sanitation obligations shall be in compliance with the hotel standard and operation. There also might be some added steps, such as signage or specific installations and decorations that will have to always be approved by the hotel on top of any other city or local permit process.

Another very important aspect to mention is the restaurant compatibility and technology adaptability, which translates to services such as room charges, so that the resident hotel gets integrated within the guest experience. Compatibility for this particular operation means to adhere to any existing technology the hotel runs and/or assuring that any new software that the restaurant brings on board, will also have to be compatible.

Retaining key talent is of great importance for any hotel restaurant due to the particularity of the operations. In terms of overall staffing and training there are additional relevant areas to cover in this kind of operation versus others, including room service for example.

In other words, the resident hotel restaurant must blend into the hotel experience in order  to greatly impact the customer’s overall hotel stay and/or visit to the hotel and its restaurants.

Although the Cafe Americano brand vision may not always be the  hotel resident operation, as seen in the Las Vegas examples, the truth is that the overall restaurant formula has greatly impacted the enhancement of the guest experience at all of its hotel partners by providing excellent food and top-class customer service. Making it particularly attractive to hotel operators.

Source: Hotel Executive – Emerging From A Pandemic: Issues Impacting Hotel Restaurants