6.1.17: Hotels Seek Chain Restaurant Owners/Operators as Partners

Most franchised select service and full-service hotels require on-site restaurants to comply with franchise requirements. However, most hotel owner/operators consider running a hotel restaurant a necessary evil, and most hotel restaurants do not make money. In addition, hotel guests do not care to frequent a “no name” restaurant offering in the hotel and instead seek a familiar chain restaurant nearby.

To kill two birds with one stone, hotel owners are seeking partnerships with chain restaurants that are more efficient and skilled in operating restaurants and provide menu features that hotel guests are familiar with.

For example, Ruth’s Chris Steak House is featured in over 20 Embassy Suites hotels in major U.S. metropolitan cities. In fact, the Ruth’s Chris in the Embassy Suites in Chattanooga, Tennessee just tied for top honors among the brand’s 81 franchised restaurants. According to the hotel owner, “The Ruth’s Chris restaurant is an asset to the hotel. The restaurant staff also handles the food service in our banquet room space so we can focus on selling rooms.”

Another steak chain that partners with hotels is Outback Steakhouse, such as the one found at the Marriott Springhill Suites in Chicago, Illinois, just east of O’Hare International Airport. A recent guest comment indicates how chain restaurants can turn a minus into a plus: “My flight was cancelled (snow/below zero cold) so I spent the night at the hotel, so no luggage or car, and I’m very glad Outback was here.”

This entry was posted in CMBS, CMBS Conduit Loans, Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit, Valuexpress and tagged , , , , . Bookmark the permalink.

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