The Future of F&B
Jan 9, 2021
2 min read
Elizabeth Blau, Founder & CEO of Blau+Associates moderated the International Luxury Hotel Association's webinar on The Future of F&B, with panelists Santi Rodriguez, Operations Director, Nobu Hotels, Sebastien Silvestri, CEO, Dinex, Steven Kamali, Founder, Hospitality House, and Daniel Hostettler, President, Relais & Châteaux, North America & Group Managing Director, OHM Collection.
"This is an unprecedented situation," said Elizabeth Blau at the start of the webinar, "I have spent the last three months in Las Vegas and have never seen anything like this before, these are trying times, and people are quoting that up to 85% of independent restaurants may not survive. The hotel food and beverage landscape is completely unknown."
What can we do to guide and create effective and financially viable operations?
"Our focus has been to ensure restaurants feel there is a support system there for them," said Steven Kamali, "within days of the pandemic and quarantine period we established a coalition within the restaurant network and have over 3000 restaurateurs and chefs who, via the platform, can gain access to professionals like accountants, lawyers, and lobbyists. Our group is advising them 'less is more,' as the ability to provide service as they have been doing is almost impossible today while staying safe and maintaining a level of profitability. We have discussed reducing the level of service and providing more personalized service in rooms, expanding on the offering of room service, and other creative options."
Sebastian Silvestri spoke about how they had to shut down all Chef Daniel Boulud restaurants across New York, Boston, London, Miami, Palm Beach, Washington DC and Singapore, and chose to use this time to reinvent themselves and reposition the brand, post covid. For example, they have partnered with Relais & Château to do a seasonal pop up at Blantyre, where their Cafe Boulud team will be stationed for the next few months. They also created a new brand called Daniel Kitchen, where people in the New York area can order take out, with Lexus fulfilling the delivery side. They are also opening new venues like the Sofitel Dubai Wafi and looking at new markets in the UAE.
"New York is only operating outside," Sebastien added, "and Palm Beach at 25%. It's a patience game."
"We have to take the opportunity to change our mentality," said Santi Rodriguez, "and focus on thinking with the head and heart before reopening, to make sure that we can afford to take the loss or at very least break even." In the United States Nobu is doing take out, but the Spanish market has been hit very hard and Barcelona won't open till 2021 when international travel returns. Ibiza opens July 10th and the pick-up has been very good.
Daniel Hostettler warned against "dumbing down" the service levels too much as it will have a lasting knock-on effect in 2021 and it can be hard to re-earn the customers' trust. It's better to be inventive. At the Ocean House, they've introduced mobile bar carts, and at The Inn at Little Washington Patrick O'Connell has introduced mannequins at every other table, to subtly enforce social distancing while still creating an appealing atmosphere.
Relationships between landlords and restaurants are strained
Steven Kamali spoke about landlord and tenant best practices, saying that "naturally there has been a fracture between the two when thinking about how they are interfacing with their retail tenants." The hotel industry has built relationships with its F&B partners for over the last 10 years, and real estate needs to look at the hotel industry and see what they have been doing. Cash strapped tenants are not going to make great tenants and a lot of concepts won't survive. Steven has been recommending not investing in those that won't work and investing in groups like Nobu and Dinex, looking to them not as tenants but as partners, and creating a more level playing field. No matter how great the chef, the reality is that the margins are thin. The real estate community was not aware of that and the education process has been difficult. The first 60 days real estate owners were very upset, and over the last 45 days, they have realized the only way they will make it work is in a true partnership, side by side, and shoulder to shoulder.
Can technology play a helpful role?
"You definitely need to make an investment in technology to counteract low margins on the labor side," said Sebastien, "we don't want to sacrifice the food and experience, so we need to look to new technology that will allow more efficient accounting, reporting, CRM, Ordering systems, etc. We used to operate a certain way, now we have to make changes and look at corporate overhead and G&A cost."
How do we stay profitable at 50% occupancy?
According to Sebastien, while 25% to 50% is not sustainable, we need to be patient, to reopen slowly, with a different structure and different offerings to meet the new demand, and watch day by day, while trying to limit risk and exposure.
Steven agreed and added that and we need to look at alternative paths of revenue like delivery, private chefs, and new channels. Cloud kitchens are creating a whole new segment of the industry, just as Regis did with cooperative workspace, with small operators housed in cloud kitchens, fewer staff, and less revenue, but higher profitability.
Daniel mentioned Relais & Châteaux's preset dining experiences - on the beach, the terrace, outdoors, or on the doorknob. Restaurateurs need to get very creative, even doing parking lot pop-ups.
What is the forecast for Europe?
According to Santi, it depends on the market, in Barcelona, they are not going to open, in Ibiza, they are cutting the budget around 25%, but guests from the Netherlands and Sweden are supporting business. Private jets have started landing in Ibiza - it all depends on what part of the world you are in.
Sebastien says he has been trying to do Q3 & Q4 forecasts, but every day the situation changes. There will be a huge transformation in the industry and change will be significant. Once group business is back, he believes, it will be a good indication of recovery and will trigger a lot of things, but that will be difficult until we get a vaccine.
Believe in marketing
"The value of brands is greater than ever before," says Steven. "Especially now, folks need to double down on building relationships with their customer base. I can appreciate the need to cut expenses, but ultimately that is where the connection to the consumer is. Brands who are looking to start should do so with their story, where they are getting their food, and do everything they can to ensure that they are able to deliver their message in the most thoughtful and special way that they can that is unique to their business."
Any mistakes made?
With Barcelona, we made the mistake of overplanning, Santi told us, spending time on SOP's and safety protocols, without realizing we were never going to open.
"I wish we had started Daniel Kitchen a year ago," said Sebastien.
"Everything we do seems to be a mistake 48 hours later," Steven answered, "it's how we react to our mistakes that determines how we are going to get through this. As cheesy as it sounds, we are in this together. These webinars, the questions we receive from attendees, they all give us insight as to how people are thinking."
Daniel talked about the countless times he had to apologize to staff and tell them that they were not actually opening next week but in a couple of weeks, and then, how they cut back on seasonal staff and had to scramble to catch up as their properties have been so busy. The positive, he added, was that competitiveness has turned into far more partnerships, with people in the restaurant and hotel industries sharing information and resources, discussing the new norms. "The willingness to share, speaks volumes about us as an industry," he said.
What is the future for restaurants and bars?
The panelists agreed that nightlife will be "crushed" for the remainder of the year, and cruising is also a long way off, especially without a vaccine. "Those operating independent properties [with recognizable brands] have the edge over big brands," added Daniel, "as people are looking for experiences where there is a sense of place."
Some good news, once there is a vaccine the recovery should be strong, as there is a younger generation who wants to return with renewed energy; however, people will be more thoughtful and careful about where they spend their money and their time.
The webinar was sponsored by OmniMax International
OmniMax International is proud to manufacture two products in great demand for use in the hospitality and food and beverage projects, Knotwood and Equinox.
Knotwood combines the natural beauty and timeless appeal of wood with the capabilities of aluminum.
Equinox Louvered Roof is an automated pergola system that allows for continual use of outside dining and event spaces, independent of the weather.
Both products are customizable, durable, and 100% recyclable.
Get in Touch with Connie Land on 770.354.6435 or at [email protected]
Join the next webinar on The Synergy between Digital, Branding, Revenue Management & Sales, July 15, 4:00 PM EST, with Bridget Tran, Head of Digital and Consumer Marketing at Nobu Hospitality as moderator and panelists Jaclyn Riley, Senior Director of Brand and Communications, Premier Worldwide Marketing, representing Karisma Hotels & Resorts, Aurelia Gabriela Talpa, Director of Distribution at Nobu Hotels & Director of Revenue Management at Nobu Hotel Shoreditch, London and Ginger Gibson, Director of Sales & Marketing, The Millennium Times Square & The Premier New York.
About the International Luxury Hotel Association
The International Luxury Hotel Association is luxury hospitality's preeminent association promoting, unifying and advancing the industry through insight, opinion, and research. ILHA reaches an audience of more than 500,000 hotel professionals in 90+ countries and produces LUXURY HOTELIERS Magazine, ILHA SmartBrief and the INSPIRE SUMMITS in Europe and North America. They also run LinkedIn's largest hospitality and travel group, which ranks in the top 100 of the more than 10 million professional groups on LinkedIn. Connect with us on luxuryhotelassociation.org, hospitality and travel forum, ILHA Facebook, ILHA Instagram, ILHA Twitter, ILHA YouTube
Global Head of Media and Communications
International Luxury Hotel Association