Five-star hotel restaurants no longer have big draws
Hotels such as Starwood and Marriott say they are opening no more than two restaurants each in their upcoming hotels because it is no longer viable to have more. The Courtyard by Marriott hotel in downtown Pune recently closed its Asian restaurant “Red Zen”. For builders like Duet Hotels, which has a tie with Intercontinental Hotel Group (IHG) to build Holiday Inn Express hotels in India, banquet space is far more the need of the hour than a restaurant.
“With the proliferation of independent restaurants, footfall is much lower for upscale hotels,” says Uttam Dave, a hospitality industry expert. Previously, it was not uncommon to have five to seven restaurants in five-star hotels. But today, this concept is not feasible, he adds. Step out anywhere in South Mumbai or Delhi and you’ll find a slew of upscale new restaurants. Non-resident guests who form the backbone of a hotel’s restaurants (especially specialty restaurants) now find them cumbersome in terms of accessibility, security features, and even ambience.
While hotel chains such as Taj say footfall at their restaurants such as Machan, Rick’s, House of Ming has not decreased, several others say the threat from high-quality stand-alone restaurants outdoors is real. Some of the successful stand-alone restaurants in India include the Smoke House chain which operates in Delhi, Mumbai and Chandigarh, Hakkasan, BBar and the Mamagoto chain which operates in Delhi, NCR and Mumbai. Rahul Khanna, co-founder of pan-Asian casual dining chain Mamagoto, sees this as a natural progression as more people get into the restaurant business, including talented chefs who are now willing to take risks with investors who support them.
“People are also realizing how expensive hotels are and hotels are less imaginative with ideas as they cater to more generic taste. People want constant newness and affordable experiences,” he says. account, it comes down to viability.” Although the cost of operations is very high, the hotel’s restaurant prices need to be brought into line with those of stand-alone restaurants and as a result, the owners question the logic of investment,” says Ashish Jakhanwala, Managing Director of SAMHI Hotels, which builds and owns hotels like Hyatt Place Hotel in Gurgaon and Four Points By Sheraton in Ahmedabad. For these hotels, a single restaurant in addition to a cafe is enough.
Concept restaurants are going out of style in most hotels, as younger guests want to go out and try something new. “Quality local restaurants make us reconsider how many outlets we need in our own hotels. If we are in a downtown area, we prefer an all day restaurant in the lobby with more cuisine choices and smaller portions. That’s because Tier 1 downtowns have more dining options,” says Dilip Puri, Indian general manager of Starwood Asia Pacific Hotels and Resorts.
The next five-star hotel, JW Marriott in Andheri (East) Mumbai, will only have a cafe and restaurant, said Rajeev Chopra, managing director of The Residency Hotels, which has developed and managed hotels in various parts of the countries, including brands like Marriott and Starwood.
“While the profit on chamber business is almost 80%, the profit on F&B is only 4-5% (after taking all costs) and therefore F&B is a losing proposition,” Chopra said. at a hospitality summit recently.
These hotel chains are also reworking their F&B offers. All-day restaurants are slowly transforming to include set menus and specialty dishes, saving the cost of building a separate restaurant. With the increase in meetings, incentives, conferences and exhibitions (MICE) activity, hotels are expanding their banquet space while reducing the number of restaurants.