Hotel Restaurant Solutions - Turning a Headache into an Opportunity

Critical issues to consider when outsourcing a hotel’s restaurant operations to a professional restaurant brand/operator.


In this unprecedented economy where hotel occupancy and rates are significantly down, hotel owner/operators are forced to closely review EVERY aspect of their operation to squeeze out profitability opportunities. If approached correctly, an area of great opportunity can be that of outsourcing property restaurant operations to a professional restaurant brand/operator.

Currently there are over 50,000 hotel properties operating in the United States, most of which offer restaurant options to their guests. While most of these are profitable at a departmental level, when all of the hotel’s restaurant expenses are properly accounted for, a vast majority of venues are unprofitable. In addition, most lodging owners/operators consider the running of their hotel restaurant to be a necessary evil, as the operational and managerial demands far outweigh the related revenue streams. However, when done correctly, an effective hotel restaurant will generate greater restaurant sales and profitability, enhance RevPAR and increase asset value. The key is to retain the benefits of the restaurant operations, while outsourcing the headaches.

When evaluating a partnership with a restaurant brand/operator, the hotel owner must consider three key elements: deal structure, operational considerations and restaurant brand/operator selection. This article addresses these basic issues that influence both hotel owners and restaurant brands.