Dynamic, stimulating, vivid colors—a palette to please the eye. This could very well be a critic’s choice words for a well-known and highly acclaimed hotel restaurant:  Picasso at the Bellagio in Las Vegas. I recently had the pleasure of experiencing this unique and aesthetically divine establishment on a secondary reconnaissance trip on behalf of a client who has great aspirations to incorporate a similar venue within his new boutique hotel. Since we are still within our development stage plans and waiting for approval on a zoning variance (related to the restaurant facility), I felt it would be prudent to personally revisit Picasso and see how it has fared since its opening in 1998 when I first visited the establishment.

Before my second visit, I went on my usual Internet search for reviews and comments (from the Bellagio’s own press releases and sites such as TripAdvisor, Frommers, and Gayot) to read up on current commentary.

Throughout my evaluation process, I worked with various criteria that we needed to implement in our own hotel-restaurant project and found ample opportunities existed for our version of a Picasso-styled eatery à la façon du Bellagio. We found there were consistent choices we could implement in the front of the house as well as the kitchen, and it merely required a stage manager. Fortunately, I have a theatrical background and sought to encourage an expedient program to design and integrate various techniques to create a provocative style, theme, and the type of culinary performers who would be equally enthusiastic about our own production.

Our business plan and budget have been modified to assume seasonal décor and significant menu changes to create a “traveling exhibit” format (similar to museum runs). We feel this will create sufficient hype and interest for the dining and art patrons who reside in our area. Our proposed location is in a warm resort region in Florida and in close proximity to a world-renowned museum. Of particular interest to our plans is also the accessibility of an influential school of art and design and for which we will establish a student scholarship program with the proviso that they produce certain works of art specifically for our restaurant and the hotel common areas. This will benefit us as much as the students who will be able to identify their works in their professional portfolios. We will also establish a special student dining rate (with certain restrictions on days and times for use). We recognize the area is home to a local state-run university as well as several colleges, and we feel this particular demographic will bring us a respectable source of revenue.

The Demographics and Location

We benefit from our placement within a resort town and enjoy a mix of international dining patrons (tourists, seasonal visitors, full-time residents) as well as an increase in young business professionals who, by preference, appreciate the selectivity of multiple dining choices providing mix-and-match meal assemblages, and who (most importantly) contribute to a hefty liquor tab. It’s a good mix for us and, yes, it’s VERY expensive to operate a trendy business oriented to the masses. This is the price you pay for location, location, location. As a realtor, I am fully aware of what’s going on in town, so we benefit from my research and negotiating skills.

The Competition and Cost

Although there are a few relatively new entrants in this region (two major hotels having recently completed renovations and additions to their own on-site restaurants), we welcome the opportunity to introduce our own signature restaurant as part of our boutique hotel complex. Aside from the portion-control menu presentation at Picasso’s, we will attempt to re-create a similar menu plan with our proposed restaurant. It is truly a cavalier tasting extravaganza and one that we have tested on a recent focus group, where we found an eager audience asking for more.

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Another one bites the dust.

World famous La Jolla restaurant Jacks closed its doors for good last week. After four years of wowing locals and out-of-towners alike, it became just too difficult to keep the doors of this huge three-restaurant venue open. Of course there is always more to any story, and I’m sure we will hear more about this unfortunate news in the weeks to come. Anyone want to buy an amazing building in downtown La Jolla? Now is the time if you have the cash!

But the story about Jacks paints a broader picture of what is happening in communities all over the U.S. Restaurants that were always considered local mainstays are closing their doors. You may see many of these places deceptively busy, but when you look closer, the traffic only hits on weekend nights—or maybe the people you see crowding the restaurant are just hanging at the bar enjoying a three-dollar happy hour beer.

Some of the more affluent communities like La Jolla do have some success stories. Tried and true places are hanging in there if not flourishing. Many local residents need to eat after all—and where do you go when your private chef has the night off? But these places seem to have figured out the loyalty formula years ago—the newer places (and by this I mean less than 5 years old) are the ones re-analyzing their portion sizes and labor hours just to pay the rent.

Loyalty, pricing, and creativity are essential right now. But weren’t they always?

The Rancho Bernardo Inn just launched a great PR campaign. You can rent a room—sans bed, heat, a/c, power, minibar, towels, etc—for $19.00. Yeah, $19.00 for a $300.00 room. You get a key and a tent that has been set up in the stripped down room. Will anyone buy this? I’m not sure, but it got a lot of press! Creativity—way to go John Gates!

How are hotel restaurants doing? I know for a fact that many in our industry are taking a hard look at their three-meal restaurant. Reference my old post about this type of restaurant. Some are taking my advice, many are not. I spoke to a young GM of a decent hotel restaurant who was bragging about the five grand in custom steak knives he just bought for his new Kobe promotion. I asked him how many covers he did last Saturday (while ComicCon was in town by the way—125,000 people within 1 block of his restaurant). The answer was 25. Twenty-five covers on what should have been the busiest night this year. The mid-priced steakhouse around the corner did 350 covers. But those steak knives!

We all need to get real about who we are, what we are, who our customers are (not who we WANT them to be—but really who they ARE). We need to check out egos and make it happen for our owners and investors and GUESTS.

So Mr. and Mrs. Newmoney decide that since they have traveled extensively around the globe and stayed at only the most exclusive hotels, they are well qualified to buy, renovate, and open a hip boutique hotel. Let’s call them dreamers for the sake of this article.

Nothing wrong with dreamers, don’t get me wrong. However….

Don’t get me started on how this dynamic is really doing some damage to our industry. Guest experience and perception of independent boutique hotels is getting tromped on. Of course there are some solid, creative, and just plain genius owners out there….but many fall short.

The biggest mistake most of these dreamers make is trying to be all things to all people. I recently worked with an owner in Southern California and their brand new 30-room boutique property in a very nice part of town. This was their very first business venture, much less the first time they had ever been exposed to the business end of hospitality. They had a good handle on the guest rooms. Yes, the furniture they bought is going to wear out in a few months and, yes, the linens they are using have to be hand-ironed by one of their poor room attendants just to get the wrinkles out. But overall, the guest rooms were nice, the design was cool, and the staff was looking sharp.

But the restaurant. They took a small room off the lobby—I think it used to be part of the front desk—and turned it into their “all day bistro.” From there, they serviced hotel guests, walk-in guests, and 24-hour room service. All this with one regular refrigerator, a home style stove/oven, and a microwave. No hoods, no prep area, no hand wash sink. They had told the fire and health inspectors that this was a break room to get their permits to open.

They did not tell me any of this when they hired me to come in and “fix” their F&B service issues. In just four weeks since they opened, they had been through two “chefs” and turned over the service staff three times.

Once I saw the operation, I told them that the only way to move forward was to bring in an architect and re-design the kitchen to code. I will not work with an illegal operation. The owner was shocked to now be spending about twice what he needed to with a post-opening conversion of the kitchen and restaurant. Their hotel is going to suffer through a busy summer (near the beach!) without F&B.

This is the second time I have run across situations like this in just the past few months. With more and more inexperienced “dreamers” opening up properties with no expert advice, I am sure this is happening all over the country.

What this all brings us to is the need for owners of smaller properties, even inns and B&B operations, to plan accordingly when it comes to their F&B operation. Look to outside experts, not your friends or relatives. Even worse is relying on equipment vendors to design your operation! Their goal is to sell equipment, not to maximize your space and revenue opportunities.

Smaller boutique hotels have a lot of opportunity when it comes to what they can do with food and beverage. Being independent allows you to actually be a “dreamer”—just do it right. Here are some suggestions if you fall into the dreamer category:

• Hire a good commercial kitchen design/architectural firm. They can save you a lot of money and time in the long run. They can, in most cases, even identify ways to capture revenue or maximize expenses that you may not have thought about. This will also, in most cases, guarantee that you are going to pass plan check and health inspections.
• Consider bringing in an outside expert on F&B, specifically hotel F&B. This person can go over your vision and apply it realistically to your operation, budget, and local market. It may cost a bit at the beginning, but, like the designer, will save and make a lot of money for you over time. You will also not need prescription headache medicine, just the extra strength that anyone in the hospitality industry is addicted to!
• Don’t design menus that you can’t really prepare. Match your menu to your expected guests, not what you want to eat every day. Be realistic about the operation, market, and expected volume.
• Be ready to change. The best plans will need to be revised, altered, and sometimes even scratched as the reality of your operation becomes apparent.
• Listen to your customers. I hear time and time again from dreamers that their guests “just don’t get it.” Well…if they don’t “get it,” then you won’t get them or their money.

So to all of you dreamers out there, be bold. Go forth and buy, build, create and innovate new hotels. Just plan a little and don’t be afraid to bring in some help at the get-go.

Okay, this is not specifically about only F&B, but anyone who has experience with boutique hotels knows that the GM had better have their F&B chops, or be as my fellow blogger says, “a true F&B pirate” (Thank you Karl Prohaska—too cool).

Boutique Hotel. Just the words get the imagination going. Even before I dog-eared the pages of Herbert Ypma’s first Hip Hotels book, I was fascinated by the world of boutique hotel properties. “How cool would it be to be the general manager of a cool boutique hotel?” I often found asking myself as I flipped through the pages of his magnificent photos. Working hard to make a career out of the hotel industry, I was convinced that I just had to be involved with a boutique hotel someday.

That someday came true, when in 2004 I was invited to be the general manager of what was and still is one of Palm Springs’ most hip boutique hotels. I left another huge opportunity just to be a part of this amazing world. The art, the design, the vibe. I had never really worked anywhere with a “vibe.” A year later and I knew what many in the hotel business do not…what it is really like to be the GM of a hip, cool boutique hotel. It’s not for everyone and amazing for many.

For the record, it was amazing for me, I loved every second of it and the company I worked for.

There is a mini storm brewing in the boutique hotel world, one I don’t think most involved in this industry are aware of. With more and more boutique hotel operators entering the playground, more and more bad hiring decisions are being made. The right general mangers are working at the wrong hotels. Like a square peg and a round hole, some things just do not work. Who is to blame and what can be done?

Boutique Hotels

First, let me first tell you that I have a very narrow view of what really constitutes a boutique hotel. I think that the term “boutique” is often misapplied when used to describe a hotel. A boutique hotel is not defined simply by a hot design, as many would argue. In my opinion, a boutique hotel is a property that is uniquely significant in four ways:

1. Architecture and design.
2. High level of service. A property must not exceed 150 guest rooms, enhancing the guest to staff ratio.
3. Sells to a specific demographic.
4. Independently owned and operated (this is where some will disagree with me).

A boutique hotel must be an independent operation. The hotel must not be part of a collection that is more than say, 10 properties. Beyond this, you get into having a corporate hierarchical management style that is required in running a large company and maintaining brand consistency. Take W Hotels, for example. In my opinion, these are not boutique hotels. A W hotel looks like a boutique hotel, even feels like one. Many boutique hotels would strive to be as great as a W. But a W Hotel is run and managed by a massive corporation. The property level management makes very few decisions about what services are offered and how the property is run. A boutique hotel must be operated as close to the actual physical operation as possible. Ws and the like are amazing, but in my opinion don’t fit the definition of a boutique hotel. Boutique hotels are also constantly re-inventing themselves, making sure that their fickle guest never get bored and look to stay at the latest new hip and cool property.

Boutique Hotel Guests

Travelers choose to stay at a boutique hotel because of the story or the experience. The experience is very important and must be unique and somewhat cutting edge. The general demographics are individuals 20 to 50 years of age, who work in more creative fields like advertising or entertainment and appreciate a higher level of service. When Ian Schrager entered the market with what many consider to be the first boutique hotel, this demographic discovered that they could use their travel budget to get them a room at a cool, hip hotel rather than a generic mid-level branded property. And the boom started.

Boutique hotel guests enjoy experiences, unique architecture, cutting edge interior design and in some cases an urban location. The market is expanding and the demographic model explained earlier is beginning to bleed into others. You might very well find a Fortune 500 CEO staying at a boutique hotel. It is hard to ignore the hype.

Brands vs. Boutiques

Luxury hotel operators are scrambling to avoid losing market share to the boutique world. Some hotels are actually taking the “brand” off their marketing and streamlining their operations so that their properties are authentically boutique. Take the Kahala Mandarin Oriental for example. This famous luxury property recently took Mandarin Oriental away so that they could operate and compete in the new marketplace of more independent hotels. They are now simply “The Kahala” and are working hard to be authentically local and independent of a major brand identification. I think others will follow.

The Boutique Hotel General Manager

For the sake of this publication, I will use the luxury hotel as the comparison to the boutique, since most tend to closely associate a boutique hotel with luxury travel. So what is so different about being a general manager at a luxury hotel versus a boutique hotel? Can it really be that different? The basics are the same. The general manager is responsible for the entire day-to-day operation, hiring decisions, marketing, budgets, forecasting, rate strategy, facility maintenance etc… The key for both types of properties is guest service and guest interaction. The guest at a high end luxury hotel expects to be able to interact with the hotel general manager, as do the guests at a boutique property. It is all high touch.

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