Food & beverage

the Savoy Grill or Le Cinq are as illustrious as the buildings that host them. As Ernest Hemingway |put it of another distinguished restaurant: “When I dream of afterlife in heaven, the action always takes place in the Paris Ritz.” New York is now in the midst of a new pandemic

– and this time, oyster-soaked feasts are out of the question. With lockdowns ravaging occupancy rates, 140 of the city’s hotels, and dozens of its hotel restaurants, have gone to the wall. Yet, even before Covid-19, Hemingway’s old dream of grand meals in grander halls was fading. Years before the pandemic, US hotel F&B numbers had already started dropping from their 2016 peak. More broadly, these trends are likely to accelerate with new technology. Why would someone spend an extortionate sum on a hotel dinner when apps like Seamless offer cheap and easy alternatives? Not that the situation is hopeless. Spurred by recent crises, hotels are starting to adapt, abandoning traditional F&B, and opening their kitchens to new chefs and new opportunities to make money.

Cooking up a storm Wander the streets of New York – or London, or Sydney – and one will eventually come across an unusual sight. There will be a kitchen, often with its doors flung open to the pavement, complete with ovens and fridges, and sinks. There’ll likely be chefs there too, busy chopping up vegetables and carving up meat. The only thing missing are diners – and that’s the whole point. As a ghost kitchen, this is a place expressly designed to cook food for remote customers, with finished meals delivered to their homes. Traditional storefronts, and the customer service that accompanies them, are unknown, yet their austerity makes ghost kitchens cheap. Entrepreneurs might be able to open a ghost kitchen for as little as $50,000, compared with the $750,000 they likely need to start a regular restaurant. Though the hospitality industry has rushed into

this lucrative new world – burger chain Wendy’s recently announced it was opening 700 ghost kitchens – hotels have historically been slower to follow. For Richie Karaburun, that’s partly down to experience. “Before Covid-19, frankly not that many people knew about ghost kitchens,” says Karaburun, a professor in hospitality at NYU. That’s unsurprising given how deeply F&B has been woven into the fabric of hotel finances. Despite increased competition, in fact, hotel food and drink revenue has increased by 4.5% a year from 2010 to 2016. Then there’s the question of space. To put it bluntly: why would hotels adopt the ghost kitchen model when it has a fully-staffed kitchen all of its own?

Hotel Management International /

This all changed with the pandemic. With some

80% of US hotel rooms unoccupied, and indoor dining literally banned across much of the planet, properties suddenly found their kitchens ominously empty. As Karaburun puts it, hospitality is “all about the money” – and owners had to pivot away from money-losing ventures sharpish. Fred DeMicco agrees. Because outsourcing lowers the cost of real estate, cuts the need for staff and often fits neatly into the online ordering zeitgeist, the Northern Arizona University professor explains that ghost kitchens can easily make money. “Coupled with Covid-19,” adds DeMicco, “we’ve seen a perfect storm of events – all of which have only accelerated the development of virtual kitchen concepts.”

Even before the pandemic, F&B numbers were dropping due to rising technology trends, such as food delivery apps.

“Coupled with Covid-19, we’ve seen a perfect storm of events – all of which have only accelerated the development of virtual kitchen concepts.”

Fred DeMicco

Nouvelle cuisine If nothing else, this ‘perfect storm’ can be observed in how quickly hotel-focused ghost kitchen companies have proliferated. Over the past 18 months, they’ve puffed up like pastries in the oven, scrambling to find hotel partners with cold stoves and empty freezers. In the UK, Kbox Global and Karma Kitchen are just two of the companies to set up shop in the country’s hotels. Karma Kitchen, for its part, recently raised £252m in funds – despite initially looking for just £3m. Across the Atlantic, meanwhile, companies like Butler Hospitality and C3 have been welcomed into a number of hotels, the latter recently signing a deal to cater in the Graduate chain.


Property total profi ts that a serious hotel restaurants can make. The Business Journal


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