Taste Test: Key Considerations Before Opening a Hotel Restaurant

In the cutthroat world of hospitality, standing tall amidst a sea of competitors can feel like scaling Everest in flip-flops. Guests frequently go straight to the room rate when perusing online booking platforms or Google’s Hotel Room Search. And who can blame them? But here’s the rub: succumbing to a perpetual price-slashing frenzy might just erode your services faster than you can say, “Room service, please.”

While the rate wars are hard to avoid, offering stay packages, room add-ons, and introducing more services can boost your overall revenue, making room discounts tenable. For some independent hotels, a restaurant may be the pièce de résistance. Not only does it sprinkle a dash of competitiveness onto your accommodation platter, but it also serves up a steady stream of revenue, drawing in both weary travelers and hungry locals alike. 

But before you dive fork-first into this gastronomic adventure, let’s dig into key considerations before opening a restaurant to see if it’s right for your property. 

Benefits of Hotel Restaurants

First, let’s take a look at the compelling benefits of a hotel restaurant.

Competitive Advantage

Picture this: A cozy hotel nestled amidst a bustling cityscape, its inviting restaurant beckoning weary travelers with promises of culinary delights. Ah, but it’s more than just food; it’s a competitive edge. A top-notch restaurant isn’t just another amenity—it’s a beacon, drawing in discerning guests who crave unforgettable dining experiences. Such a unique selling point can truly set a hotel apart, elevating it above the mundane and securing its place in the hearts of travelers.

Revenue Potential

Now, let’s talk about the revenue potential of a hotel restaurant. Beyond the predictable income from room bookings lies a potential goldmine waiting to be unearthed. Imagine tantalizing dishes enticing patrons from far and wide with eager appetites translating into a steady stream of income in addition to your room fees. A well-executed restaurant can indeed fatten the coffers and ensure the financial prosperity of a savvy hotelier.

Local Attraction

But wait, there’s more! Picture this: your bustling restaurant not only caters to weary travelers but could also become a beloved haunt for locals, drawing in nearby residents with promises of gastronomic delights and warm hospitality. In forging collaborations with esteemed chefs or local culinary gems, the allure of the restaurant only grows, weaving itself into the fabric of the community and ensuring a steady flow of foot traffic and revenue.

A smiling server takes breakfast orders tableside.
Travelers and locals alike seek good food and warm hospitality.

Increased Guest Satisfaction

An onsite restaurant can go a long way to please guests, from providing room service to dine-in experiences—especially if there are limited dining options near your property. Offering quality dining options on-site isn’t just about filling stomachs—it’s about creating unforgettable experiences that linger in the memory long after the plates have been cleared. Ideally, positive reviews will spread like wildfire, fueled by the flames of culinary delight, contributing to a positive hotel reputation, and attracting repeat bookings and glowing word-of-mouth referrals.

Considerations Before Opening a Hotel Restaurant

Before you go the whole hog into restaurant development, a dash of prudence goes a long way. Let’s cover the basics of what to consider before you add a restaurant to your hotel.

Market Demand

First things first, let’s dip our toes into the waters of market demand. Take a peek around the neighborhood—do folks hunger for dining options? Are there few competitors vying for their appetites? If so, opening a restaurant might just be the ticket to a profitable venture. But before you fire up the stoves, a bit of market research can help suss out the preferences of potential patrons.

High Initial Investment

Opening a restaurant demands a hefty initial investment—think kitchen gadgets, cozy furnishings, staff training sessions, and a splash of marketing pizzazz. This financial burden can leave your hotel’s coffers feeling a tad lighter, especially if the revenue faucet takes a bit of time to start flowing. If budgets are tight, consider seeking investors, loans, or perhaps striking a deal with an experienced restaurateur.

Operational Challenges

Ah, the joys of restaurant management—they come in a smorgasbord of challenges. From assembling a team of chefs and servers to sourcing the freshest ingredients, crafting a tantalizing menu, and ensuring every T is crossed and every I is dotted on the health and safety front. It can be an exciting endeavor but ensure you have the management structure in place to meet both the challenges of a restaurant and a hotel. Between the bustling hotel and the sizzling restaurant, tensions can arise. Competition for kitchen space, squabbles over staffing, differing priorities—it’s a recipe for organizational kerfuffles. Best to iron out these wrinkles before they escalate.

Kitchen staff create culinary delights in a well equipped and organized hotel kitchen.
The right staff, tools, and direction form the recipe to success!

Brand Cohesion

In addition to running numbers to know if a restaurant would make sense financially, ensure that it also aligns with your hotel’s image and branding. If you are located beachside and cater to surfers, for example, an avant-garde gourmet restaurant might cause a jarring disconnect that can leave diners scratching their heads and scurrying for the exits. However, a casual Hawaiian-themed burger and poke bowl restaurant could be the big Kahuna of your revenue stream.

Local Regulations

Permits, licenses, zoning laws, taxes, health inspections—it’s enough to make your head spin faster than a revolving door. This should be the very first item on your list to check as there could be restrictions preventing you from even getting started.

Seasonal Variability

How will your restaurant meet the ebb and flow of seasonal demands? It could go either way and it’s important to explore both scenarios. If you experience shoulder seasons, a restaurant that appeals to locals will continue to provide a steady revenue stream even when there are plenty of vacancies at your hotel. However, if you are in a vacation town that clears out at the end of the season leaving a small local population you may need to consider how you will keep your restaurant afloat.

Feedback and Adaptation

As with your hotel, listening to guest feedback is essential. Monitor and respond to online reviews and ask guests to fill out surveys. Then take action to keep guests coming back and new ones coming.

Risk of Failure

May the culinary gods smile upon your hotel restaurant endeavors! But the reality is, even the best-laid plans can fail. Poorly executed concepts, lackluster cuisine, or a misstep in marketing can spell doom for even the most well-intentioned ventures. It’s worth considering if your well-calculated risk is worth it in the end.

Test the Waters

Before opening a restaurant, of course, you’ll do your due diligence, run the numbers, and incorporate it into your business plan. But you can also test out hotel food and beverage trends as part of your logistics. 

Offering a pop-up culinary event, such as an outdoor BBQ, using a tented area, or having a catered culinary experience in your meeting or conference space. Instead of committing to a full-service restaurant, you may discover that these one-off events provide a nice revenue infusion while building community. 

Partner with catering companies and local restaurants while providing a platform for those companies to advertise their services within the community. Or think food festivals. If you have the space, a regular food truck gathering or taco competition can be a good draw. Make it a tantalizing on-trend food affair and you’ll even attract guests to stay at your hotel for the sole purpose of attending your event.

Hotel Tech for Hotel Restaurants

If you take the plunge and add a restaurant to your hotel, make sure you’re set from the technical side, too. 

Streamline guest charges by integrating the restaurant POS with your hotel’s property management system. The beauty of this integration means the POS can send the guest’s restaurant charges directly to their reservation folio so that they can settle their entire bill upon checkout instead of having to pay for restaurant meals separately (and so that staff doesn’t have to add restaurant charges to the guest’s room reservation manually). It may seem simple, but it will save time and headaches for you and your guests.

Well, there you have it. Adding a restaurant to your hotel can produce a fountain of revenue and help your property stand out. With a dash of the right research, a pinch of planning, and a generous dollop of careful consideration, it may just be the business venture that infuses your hotel with the secret sauce it’s been yearning for—a recipe for greater success!