How the Pandemic Shaped the Future of Hotel Restaurants

Sage Restaurant Concepts (SRC) knows the hotel restaurant industry well. Across the country, the group owns and/or manages 50 food and beverage concepts, all within hotels. Although the pandemic forced SRC to temporarily close every single one of its restaurants, the group managed to reopen all but two. And within just the first six months of 2021, it’s added an additional 14 concepts to its roster. 

We sat down with SRC chief operating officer Meaghan Goedde to chat about what she sees as the major takeaways from the pandemic when it comes to the industry’s hotel sector. Plus, Goedde shares how appealing to a local market has been pivotal to SRC’s success. 

Hotel restaurants are a true intersection of hospitality and dining, and I imagine that many potentially took an even harder hit than the industry as a whole at the start of the pandemic. Can you share with us the impact you saw with SRC’s hotel restaurants?

Obviously all restaurants and hospitality, and everyone, was affected by the pandemic. For hotel restaurants specifically, what we really needed to do was to take a look at our meal periods. A hotelier would tell you three years ago, they have to have breakfast, or they can’t get rated or get guests. But that was the biggest change that came out of the pandemic for us – having the confidence to close down meal periods and realize that our guests were OK with that, especially in markets where we’re in urban settings and there are other options. 

For example, at Urban Farmer, our steakhouse in Denver, we used to be open seven days a week for three meal periods a day. Now we're only open for dinner and brunch, and honestly, we'll probably stay that way. The pandemic gave us an opportunity to look at the business differently and realize that we didn't necessarily need to be open for breakfast. 

Another important takeaway for us has been the importance of positioning our restaurants as local restaurants for the people that live, work, and play in our local communities. Our strategy all along is to appeal to the local market, and that has been so important in us being able to survive this pandemic. We’ve had such good local traction versus just relying on hotel guests. 

Were there any other significant pandemic-driven changes that you foresee persisting into the future?

With some of our concepts where we felt like we needed to have a breakfast option for our guests, we just looked at doing it differently. At one of our restaurants, Kachina Cantina, we now have an Airstream camper, and out of that we serve coffee and breakfast burritos. We’re able to staff it with one person versus doing a full-service breakfast. That makes our guests happy, and it’s been a silver lining in being able to streamline and make our breakfast offering more efficient.

We’ve also done more delivery and have used more technology for ordering. For example, at The Red Barber, we’re utilizing Bbot for our guests to order from the table on their own, which wasn’t something we were doing before, but it’s certainly a technology we’ll continue to utilize. And we’ve started using that in rooms as well, so guests can order from their room directly into the restaurant versus the traditional way of room service. Everyone’s very OK now with utilizing their phone, and people actually enjoy having that experience in their own hands. In the rooms, it gives our guests the opportunity to do something that at this point is familiar to them, just like third party delivery.

SRC managed to reopen nearly all of its restaurants, and I know meal kits played a role in the success. How did that strategy turn out to become pivotal? 

There was one point in the pandemic when restaurants had reopened and then closed right around the holiday season. We pivoted really quickly to doing online to-go holiday meal kits at more than half of our restaurants. And that literally kept our doors open for a couple months while keeping our staff in place. 

Some were take-and-bakes, like at our steakhouses, we’d do a prime rib dinner that was mostly made but you could finish off at home with chef videos, and some were fully prepared. It depended on the concept. But it was a really great thing for us. 

This past year, we were open through the holidays but still kept the to-go meal kits, and at one of our Denver restaurants, we had our best holiday season ever because of this additional revenue stream coming in. So the first year it was survival, the second year it was crazy.

SRC also opened 14 new food and beverage outlets within the first six months of 2021. What went into the decision to move on these concepts despite the continuation of COVID-19 challenges?

It was a wild first part of last year. We opened a restaurant, a food hall, and a bar in downtown Denver, and that was part of existing construction that happened pre-pandemic but the openings were delayed. Another project in North Carolina was being built, too. There weren’t decisions we made in the moment, but something we decided before the pandemic. The other [openings] were new management contracts we took over, being in the hotel business. 

We opened with staggered meal periods, like I mentioned earlier, but with the openings, that became extra important because of staffing. Staffing was and is unbelievably challenging, and we certainly had to do a lot of things in untraditional ways. We had to pivot a lot on how we onboarded, and we did orientations via Zoom, which was very weird but necessary to keep everything on track. 

Honestly I’m not as concerned about revenues for those restaurants. I’m more concerned about expenses. The labor challenge is real, and people are offering wages we’ve never seen before. So it’s really important that employees align with your culture because you could walk out of a restaurant and have a job the next day. The supply chain issues are real as well. Costs are unpredictable, so forecasting profitability is more challenging than ever. But I'm confident in revenue and the guests’ desire to come out and eat and experience.

How are you attracting new staff?

We’ve tried everything. I just got back from Bethesda – we’re opening a restaurant there in a week – and literally we have three people focused everyday on just trying to get talent in, and we're opening in a way less confident manor than we have before. Finding people is really challenging. Literally we're happy if two people show up if we’ve called 70 [people]. Then when we get people in, it’s all about keeping them. It’s so important to take really good care of them once they’re here. 

As far as strategy, we’ve tried it all. We’ve posted in different ways, we've offered bonuses and hiring incentives and referrals. But the key core is keeping people once they do come into your doors. That has to be at the forefront of how we’re working with our teams.

Do you have any top advice for retaining staff?

Just being nice. It sounds really simple, but we really rely on a good, old-fashioned approach of treating people like humans and having empathy. You need to have some flexibility as well. We were laughing yesterday because we were on day two of training for this restaurant, and so many people weren’t showing up or were late. And we were like, “Oh my gosh, remember the old days when if you walked in five minutes late, people would send you home or fire you?” Now you're like, “Oh, that's totally fine. I get that your car broke down.” Or whatever it is. You have to give people some grace and have a little bit lower expectations on how people engage with work because it's really different than what it used to be just because there are so many opportunities out there.

How are you accounting for supply chain disruptions and ingredient price increases?

The best resource we have is our culinary talent. All of our restaurants are chef-driven, so we have the ability to flex and change. If something’s coming in really expensive, we have the talent to create something different and utilize products they can either get or are less expensive. Having highly skilled culinary leaders allows us to deviate from a prescribed menu. 

Can you share some of your strategy behind appealing to the local market with your restaurants?

The key thing that we do is we have separate sales and marketing functions. In all of our properties, my team focuses on marketing the restaurants as separate outlets. So for example, for Urban Farmer, which is an Oxford Hotel, we have a separate website and social media channels. If you don’t know that it’s affiliated with the hotel, you’d have no idea it was affiliated with a hotel. Marketing it as a separate identity is key to having that differentiation where it’s not just known as the hotel restaurant.

The reality is that restaurateurs and hoteliers think really differently. In general, the profitability, marketing, etcetera [of a hotel restaurant] isn’t focused on because it's all about getting the room rate. But we’ve always said we’re going to run profitable outlets. We’re certainly going to take care of our guests, but we're not going to lose sight that we are there to make money. I think that's sometimes where hotel restaurants aren't as profitable because they make decisions more around room rates. We try to really collaborate with our hotel partners to make smart decisions on how to satisfy both.

Have the past two years changed how you’ll choose locations moving forward?

I think so. We are part of Sage Hospitality, so everything that we’re doing currently is within the hotel. We follow the hotel, and then we create food and beverage offerings around them. And we make our decisions based on location – if it’s somewhere that there’s the ability to appeal to local guests and we can get 85% of our guests from outside the hotel, we’ll do one of our restaurants. If that’s not going to happen, we won’t put in one of our restaurants. 

We're starting to look for standalone restaurant spaces where we’re operating outside of a hotel. That's been really exciting and is new for us. And we are certainly going to be looking in areas that are more favorable from a minimum wage perspective and areas that have a lot of foot traffic versus a driving market.

Any other thoughts on where you see the future of hotel restaurants?

Hotel restaurants are super relevant. Over the past 20 years, it’s been very cool to see how great hotel restaurants have become because historically they weren’t thought of too much. The expectation now is that if you have a nice hotel, you're going to have a nice food and beverage experience. And there are some people doing some really amazing things in the landscape. I think it's just going to continue to evolve and get better.

Grace Dickinson is a reporter at Back of House. Send tips or inquiries to grace@backofhouse.io.