Do Not Disturb

michael WHY YOU DON'T


December 7, 2006 -- Do you eat in hotels? If you are the normal business traveler, you probably don't. Maybe you catch a breakfast in a hotel dining room here or there. Or you down an overcooked, overpriced hamburger from room service once in a while. Drinking at the hotel bar? Yes, sometimes, but only if the bar is really fun.

As a hotelier, I can tell you that most of you avoid eating where you sleep. Which explains today's most intriguing trend in hotel restaurants: big-name chefs.

In record numbers, hotels are bringing in celebrity chefs, most of whom create menus that offer food that most of us have never heard of. Gordon Ramsey first opened in Claridge's in London and has now stepped across the Atlantic to hotel outlets in New York and Las Vegas. Jean-Georges Vongerichten first set up shop in New York's Trump International Hotel and his restaurants can now also be found in hotels in London and Shanghai. He recently cut a deal with Starwood, too, and is expected to open restaurants in St. Regis, Westin, W and other Starwood properties. Charlie Trotter, Emeril Lagasse, Todd English and Thomas Keller have also opened hotel-based restaurants. Not to be outdone, Alain Ducasse is hotel jumping in New York, moving his eponymous restaurant from the Jumeriah Essex House to the more-prestigious St. Regis hotel.

The latest hotel dining room with a big-name, celebrity chef is the Four Seasons in New York. L'Atelier de Joel Robuchon opened there two months ago. It's Robuchon's third hotel restaurant--there are L'Atelier dining rooms in Paris and Las Vegas hotels, too--and more are planned for hotels around the world. I'm not a restaurant reviewer, but my spies tell me that L'Atelier is pretty good and very expensive, but totally devoid of hotel guests from the expensive guestrooms above.

Regular readers of this column know that The Beverly Hills Hotel is one of my favorites; its Polo Lounge is at the very top of my list for food, drink and stargazing. But one sees very few hotel guests in the Polo Lounge. A quick check with the hotel's PR department reveals that less than 20 percent of the revenue of the Polo Lounge comes from hotel guests. My favorite bar in Chicago, nestled inside the Four Seasons Hotel, is packed with locals, but draws very few hotel guests. The Four Seasons Chicago's dining room appears to be a no-guest zone, too.

So two questions arise from this strange dichotomy: Why don't we business travelers use the food-and-beverage (F&B) outlets where we are staying? And why are hotels paying huge sums to bring celebrity chefs to their dining rooms?

The answer to the first question is quite simple. The food at most hotel restaurants is boring, not very tasty and perhaps 30 percent more expensive than at a local eatery next door. Why pay $28 for a plate of pasta in the hotel dining room when you can get the same in a cozy local eatery down the street for $15? The booze at a hotel bar is also way more expensive than at the saloon down the street. I certainly have difficulty paying $22 for a martini in a hotel bar and, to add insult to injury, not even having a television to watch my favorite team get beaten.

Hotel dinning rooms are usually half-empty and the bars dark and dreary. I remember walking into the restaurant on the roof of the old L'Ermitage Hotel in Los Angeles. I was being shown to a dark and dismal table tucked away in the back of an empty room. Upon asking for a table with some light so I could read my copy of Time, I was informed by the haughty maitre'd that "this is not a library". Exit one customer, never to return.

All of which is also the answer to the second question. Having failed to attract their guests into their F&B outlets and having failed to attract outside customers for the same reasons, hotels lose money on their restaurants. Generally speaking, a hotel is doing well if it can eke out a 20 percent profit on its F&B operations. But that cheery-seeming margin doesn't take into account what hoteliers call A&G expenses. A&G includes the salaries and overhead of the general manger and the team of accountants buried in the basement. Even the hotel marketing team's costs don't get charged to the food-and-beverage budget. Hotels often exempt F&B from insurance and tax charges, too.

When those many extra costs are taken in account, a hotel's F&B program might break even, but more likely would show a thumping great loss. (By the way, banquets and catering make huge profits for a hotel and generally keep the F&B program afloat.)

So to cure the financial problem, hotels around the world are signing up celebrity chefs and fitting out restaurants to their specifications. (Renovations usually cost a few million bucks, but those are considered capital expenses and aren't applied against the restaurant's bottom line.). In exchange, the hotel charges the celebrity chef rent and/or takes a percentage of his turnover. That rental income and/or percentage of the action then shows up on the hotel's balance sheet as almost 100 percent pure profit.

Most everyone is happy with this arrangement: The celebrity chef has a new restaurant that he couldn't possibly afford to build himself. The chef's celebrity will bring in the rich masses. The resultant public relations will be great for the hotel. The general manager will sport a new Hermes tie and look like a genius for turning a financial black hole into a profit center.

You and I? Well, that's another story. We'll probably continue to take the elevator down to the lobby, leave the hotel and search for a nice local spot for an affordable bowl of pasta.

A note to readers: The first draft of this column included the joke line, "I guess that Rachel Ray will be the next celebrity chef to jump into the hotel restaurant game. She'll surely open a place offering hotel guests meals in 30 minutes or less." I had to cut it because Accor, the French hotel company, made an important announcement this week: Its 11 Sofitel hotels in North America have launched the 30-Minute Lunch. The company promises that a "refined four-course meal is guaranteed to be served within 10 to 15 minutes of ordering."

This column originally appeared at

Copyright 1993-2006 by Michael Matthews. All rights reserved.