Waaaay back in mid-2006 Starwood Hotels & Resorts announced that they were partnering with the world-famous chef Jean-Georges Vongerichten for a new restaurant company which would encompass his current restaurants and allow him to open many additional restaurants throughout Starwood’s properties as well as add to his free-standing restaurants.

Ironically this happened almost the same time that Starwood Capital Group purchased B.R. Guest run by famed chef Steve Hanson and did essentially the same thing – brought his company under the Starwood Capital umbrella with the promise of opening additional restaurants throughout Starwood’s 1 Hotel, Baccarat and Crillon properties.

Starwood Capital’s arrangement has begun to show some signs of activity – primarily the announcement that his restaurants would appear in the 1 Hotel in Seattle and Washington DC, with the assumption that the other 1 Hotels would also have one of his restaurants, and then of course don’t forget about Steve’s current restaurants – some in W Hotels which are being run and operated just as they were before.

Starwood Hotels on the other hand has not done anything until just recently. Earlier this week it was announced that Jean-Georges would be forming a new company called Culinary Concepts by Jean-Georgesand it’s first three restaurants would be located in the W’s soon to be opened in Atlanta-Buckhead, Doha and Istanbul. The whole reason for Starwood joining up with Jean-Georges is to expand the type and quality of restaurants within their hotels – primarily luxury hotels. It’s a good possibility that these concepts will not be in the Sheraton or Westins, but I wouldn’t be surprised to see the aloft Re:Fuel area feature sandwiches and quick meals by Jean-Georges. What more of a perfect way to expand his brand name?

It’s a little unclear if all of his existing brands will be merged into this new company – if you look at Culinary Concepts website, it does show all his restaurants under “locations” yet his “concepts” only show a few of the restaurants. I have not been able to find anywhere on the site any reference to Starwood Hotels, but if you go to his existing site (www.jean-georges.com) and click “links’ it has a link to Culinary Concepts saying that it is a joint venture with Starwood Hotels. I do have a feeling that this new company will takeover his existing restaurants and merely be owned in conjunction with Starwood. What would the benefit to Jean-George’s be now that he owns less of his company? The capital behind Starwood Hotels, plus the ease of being one of Starwood’s preferred food vendors allowing him to rapidly open up restaurants throughout the world.

I find it interesting how all the sudden hotels are getting directly involved in high-profile restaurant partnerships. Obviously throughout the existence of hotels there has always been some type of food and beverage operation (I’m referring to full-service/luxury hotels, not select service or economy hotels) yet in a lot of locations the hotel restaurant was a venue of last resort due to the average food quality and high prices. Ironically, even though it is a last resort – it is still heavily utilized because, well – its in the hotel lobby, its a great/easy meeting place, and you can always be sure that it was safe to go there – especially if you’re visiting an unfamiliar city for the first time. But now Starwood Hotels & Starwood Capital are attempting to make the hotel restaurant a destination unto itself which will help two-fold. First, by adding to the bottom line, and secondly – people who go to these restaurants will undoubtedly end up walking through – or at least being made more aware of the hotel the restaurant is located within – thus giving the hotel free marketing.

It’s also interesting to note that Hilton has had a company called Hilton Restaurant Group for a number of years – this company has stayed very much under the radar, but nonetheless operates some seemingly high-end restaurants mainly located within or next to Hilton Group properties. Hilton created the company in the mid-1990s to ensure that their hotels have a restaurant that will have the same type of service and quality that guests can expect from their hotels, but since that time only about 20 restaurants have opened, yet none of those restaurants ring a bell as being well known destinations that you might read about in a magazine. I’m a little surprised that they haven’t expanded the restaurants beyond that.

All in all, its a great step that the hotel firms are taking to diversify their income streams without going too far out of the hospitality business. It’s this type of diversifying that will help the hospitality industry stay solvent when there is a decrease in travel – while obviously the restaurant patronage will decline, it will also be offset by the locals who would visit for a meal no matter what. They are merely taking underutilized portions of the hotel experience and growing them into destinations that people would go to even if they are not planning on staying at a hotel. For example, would you typically go for a spa treatment at a hotel near your home? Probably not – but what if that spa was a Bliss Spa, which is highly marketed and very well known spa brand? Well, if you’re looking to experience a Bliss Spa – except for its 2 original locations in New York City and 1 location in London – you’re going to have to visit a W Hotel as that’s where they are all located.

Now that’s great marketing - don’t you think?

andrew@alconic-inc.com