Build it and they will come. Open kitchens shiny with European-style cooking suites; back bars glowing with high-end spirits; hotel lobbies packed with sofas and love seats; and dining rooms crammed with tables. A chef’s ego and a labor-intensive menu, the profitability of alcohol sales and the raucous energy of a great bar, a cool see-and-be-seen vibe that drives all-day revenue and higher room rates, and the self-affirming buzz of snagging a primetime table in an impossible-to-get-into dining room.
Build it the way we always have. Build it to put asses in seats, butts and elbows up against the bar, and heads in the beds. Build it according to the traditional gross revenue formula for restaurants of # of tables x average check x turns and for hotels of # of rooms x average daily rate x annual occupancy. Build it to pay the rent; service the debt; cover payroll, taxes, and all the other bills; even pay back investors; and maybe, if you’re lucky, replace the stove that keeps breaking down and have something left over to put in your own pocket.
COVID-19 has shattered these time-tested formulas and revealed the razor-thin margins of restaurants, the heavy debt load of many hotels and what happens when no one shows up and millions of jobs vanish. This pandemic and its wildfire of fear have crushed the world’s last face-to-face business, a business built on welcoming the other, the stranger, and greeting them not with six feet of fear but with open arms.
“Every reaction so far to the pandemic has been fear driven,” says Jean Pierre Marty, owner of JPM Projects & Consulting, a Barcelona-based kitchen design firm. “Until the fear goes away, we won’t be able to return to normal, and normal here in Spain means going out, being with other people, eating lunch in restaurants, and sharing tapas in a crowded bar.”
The hospitality industry’s first fear-based pivot was to sanitize. Deep-cleaning theater ruled as the staff made a show of sanitizing everything. The second pivot—survival—drove an explosion of food delivery options and extended resort and Airbnb stays far from urban cores. The third pivot was tech driven—delivery apps, contactless curbside pickup, and hotel apps that magically checked you in. The fourth pivot was the embrace of fresh air and outdoor dining as scientists discovered that the virus spread through airborne particles.
“I’m a little shocked,” admits Gary Johnson, president and CEO of CambridgeSeven, a Boston-area architectural firm. “I was certain early on that we’d see a huge shift in how restaurants and hotels are designed and do business. My business immediately and dramatically changed with everyone working from home, safely distanced. But I was wrong about restaurants and hotels. Although, moving forward, we will see greater use of tech solutions to reduce guest-staff interaction, wider use of antibacterial surfaces, and simpler hotel room designs that are easier to keep clean as well as an increased focus on operatable windows and improved ventilation.”
Right now, with the vaccine rollout providing a glimmer of hope, it appears that the lasting changes in how restaurants, bars, and hotels are conceptualized, designed, and built will actually be limited. Other than 100 percent fresh air and new systems designed to deliver it to indoor spaces and the continued embrace of outdoor dining, the new changes will be operational and opportunistic in nature. The goals will be to build (1) businesses that are far more flexible and labor efficient and better able to withstand the next shock; and (2) businesses that are opportunistic in their ability to continue to create and maximize additional revenue streams, such as delivery, meal kits, cocktail and wine to-go, Zoom cooking and mixology classes, extended stays and resort buy-outs, even as dining rooms and hotels begin to fill back up.
Flexibility and labor efficiency are the two biggest challenges facing chefs and kitchen designers. Once the pent-up demand to dine out explodes it will be impossible for most restaurants to simultaneously juggle a full dining room and successfully service all their additional revenue streams—take out, delivery, meal kits, etc.—due to limited kitchen firepower.
“Some restaurants will dramatically shrink or eliminate their dining rooms, tweak their menus, and expand their kitchens by adding more firepower, and then deliver their brand experience through social media in order to win at delivery,” says Alexander Crawford, director of interior architecture for Streetsense, a Washington, D.C.–based design and strategy firm. “But I think we will also see chefs seek greater flexibility in their kitchens by making changes to their prep lines with equipment that enables the prep staff to easily switch from prep to delivery, meal kits, meal subscription boxes and back to prep depending on demand, without negatively impacting the flow of plated food out to the guests seated in the dining room.”
COVID-19 has made clear the need for these additional revenue streams, and it has also revealed the high cost of labor and real estate as the key hurdles to profitability in the restaurant business.
“Most of our current projects,” says Jimi Yui, founding principal of YuiDesign, one of the country’s top kitchen design firms, “have kept moving through the pandemic with a mission to design kitchens with fewer bodies and less space. Our key learning has been not to dramatically shrink kitchens but rather to design them with labor flexibility so that the operator can staff up or down.
“We’ve moved away from the European-style suites that are labor intensive to American-style kitchen lines that are more flexible staffing-wise and, unlike in the past, we’re not ‘gluing’ equipment to the floor but keeping everything on castors. It’s a messier look but much easier to adjust the equipment layout as menus change.
“We’re recommending that all of our clients think through how and where they assemble and package delivery within their kitchens as well as urging them to build larger hoods than they think they need and install oversized Ansul systems both of which provide the opportunity for even greater flexibility.”
Contactless interaction is here to stay, whether that means ordering through a delivery app; scanning a QR code; or checking into a hotel with a branded app that opens your room door, orders room service, lets housekeeping know when to make up your room, and makes movie suggestions or sends you a reminder that the Knicks are tipping off in five…a road warrior’s dream.
But most of us aren’t road warriors, at least not anymore, and even those who have dreamed of seamless contactless hotel stays for years are definitely in need of a little human interaction beyond their bubble. “Tech is here to stay,” says Kevin O’Shea, co-founder of Salt Hotels, a boutique hotel company, “but staff education is key. It’s about teaching how can we make the new normal all the more welcoming and hospitable, even with masks on, as we seek those hospitality moments where we can interact with and touch the guest in a way that makes their stay memorable.”
Pre-arrival education of guests continues to be just as important for Salt Hotels. “We let guests know that we limit our room sales in order to provide the necessary space to socially distance at breakfast, and perhaps more importantly have the chaise lounges spaced properly around the pool,” says David Bowd, the other co-founder of Salt Hotels.
“I think that the concept of space as luxury will stay with us moving forward. We won’t try to cram as many tables into a dining room or as many chaises around a pool as possible. My sense is that guests will be willing to spend a little more a night for that luxury of space. The challenge for us then, with more space equaling less people and a little less energy, is how do we keep our hotels feeling cool.”
Walk down any street in New York the past nine months and a quick glance into nearly every restaurant dining room revealed tables pushed together and piled high with stacks of takeout containers and bags prepped for delivery. In cities that still allowed indoor dining, it was often a fight to get in through the front door past the queue of waiting delivery drivers. Delivery is here to stay, and indoor dining will return; what happens to dining rooms is going to be interesting.
Many dining rooms will shrink or disappear, as operators stay focused on the tighter menus and lighter labor model of delivery. Other dining rooms will address the new normal with larger tables, more space between them, and even armchairs with, of course, much higher prices.
“Foot traffic is down and will stay down,” says Alexander Evangelou, founder of London-based Alexander Waterworth Interiors, “and unfortunately we will lose a lot of the common-man experiences. But the upper class will be willing to spend money on special experiences. And I think we’ll see many restaurants go to one seating with fewer seats set at the right, very high, price, instead of trying to turn their tables 2-3 times a night for the same revenue. What worries me is that creativity has always been at the lower levels, in the neighborhoods that encourage boundaries to be pushed, and I’m not sure how quickly that creativity will return.”
“A proper bar without close contact between guests and the bartender,” exclaims Jean Pierre Marty, “is impossible. A bar with distance is ridiculous!” But, once fear recedes, bars—the single hardest hit industry segment—will pop back up first in neighborhoods like the wildflowers and lodge pole pine seedlings that first emerge from the charred soil of a forest devastated by wildfire.
With much lower barriers to entry; smaller square-footage requirements; cheaper rents; leaner staffing models; higher profit margins; and the beautiful simplicity of an operating model that requires only good ice, strong spirits, and a smile, bars are poised to once again anchor and enliven neighborhoods. Affordable, accessible and supremely flexible, bars will benefit from their proximity to remote workers working from home, their ability to collaborate with chefs who are “without-a-stove” to create new revenue streams, and especially their social mission of being joints where everyone knows your name. So, get ready to pull up the shades, polish the bar, crank up the music and open your arms. If you open the doors, they will come.