The Influence of the Hospitality Industry on Real Estate Development
April 19, 2017
April 19, 2017
Recently, New York Times restaurant critic Pete Wells turned his evaluation away from what’s on the plate in the city’s restaurant scene and instead tackled a growing trend in New York real estate: Big-name chefs setting up shop in hotels across the city.
The entire piece is well worth a read, both for foodies and those watching real estate trends. Wells dives deeply into the economic forces at play in Manhattan and Brooklyn that make the union between marquee chef and hoteliers so appealing. A unique restaurant helmed by a big-time chef allows a hotel to stand out in a cutthroat marketplace. Chefs get a custom-made restaurant property paid for by the hotelier—down to the chairs and publicists, in some cases. The hotel owners take the risk; which can be a huge financial relief in the hospitality industry, which is known for its razor-thin profit margins.
This trend isn’t limited to New York. In urban areas around the globe, marquee chefs and hotels continue to partner in hopes of mutual profit over the long term. Gordon Ramsay’s restaurant group partnered with private equity firm Blackstone Group in 2001 to facilitate the celebrity chef’s international growth—including hotel-based outposts like Gordon Ramsay at Claridge’s, which was open for more than a decade. Alain Ducasse has hotel-based concepts from Hong Kong to Las Vegas. In Boston, Tim and Nancy Cushman of O Ya fame opened Hojoko in the Verb Hotel in 2015.
One trend I’ve seen is the increasing influence of hotels and hospitality on the real estate industry across the board. Think about it: We often have our best experiences in hotels. We’re typically away from our daily grind. Hotels pamper us with luxury fixtures, bedding and amenities. It’s no wonder developers across the industry borrow from this playbook.
Hence why residential properties are in an amenities arms race, offering gyms, dog washing facilities and more. In-building restaurant offerings can help a property stand out to renters and buyers. The approach, as always, varies by city.
In Boston, residents tend to want a unique experience from up-and-coming chefs, along with a small, convivial feel. Bar Mezzana offers a relaxed experience for Ink Block residents and Siena condo owners, helmed by a husband and wife team. Post 390 has been a stalwart for residents of The Clarendon in the Back Bay for years. Liquid Art House blends art, cocktails and food in The Arlington.
Some Boston properties are embracing the New York model of large-scale, splashy restaurants from established chefs. Bar Boulud opened in the Mandarin Oriental in 2014. More recently, Pabu opened in the Millennium Tower earlier this year, bringing Bay Area Chef Michael Mina to the Hub and establishing a new place to see and be seen.
Restaurant space is built in to nearly every new large-scale residential project in major cities around the globe. Whether it’s geared toward chefs who want a small-scale location to launch their careers or huge soaring spaces for the chefs that have proven their mettle with diners, developers will continue to distinguish themselves from the competition by appealing to residents’ tastebuds.