Restaurant Closures
Most diners, i.e. those who eat out regularly and know a thing or two about how good or bad a restaurant is, don't typically give restaurants a second chance if they are not given a great experience the first time around. On the other side of the coin, restaurateurs who realise or appreciate the specific set of demands that come along with owning and running a restaurant generally succeed. This includes the way guests are handled along every step of their dining experience (from being greeted at the door to paying the check). A well known fact of business is that customer retention costs far less than customer acquisition. Unfortunately, not many realise this and when they eventually do… it is often way too late.
Now more than ever, independent and hotel-based restaurants are in fierce competition. Hotels are increasingly finding it challenging to make their venues more attractive than the standalones, despite having the advantage of possessing the licence to serve liquor. Another differentiating feature is the manner in which concepts are created. The standalone or independent operators are likely to focus on revenues; whereas, the hotels focus on costs. The reason why independent restaurants focus on revenue is because they pay rent, they’re paying utilities etc. Most hotels don’t charge rent or utilities to the outlet. Infact, several of the major international hotel operators are far less willing to offer leases. Hence, many hotel management contracts are contingent upon profits – not revenue.
Hotels build a restaurant for the hotel guests hoping that the locals will be attracted as well. Whereas, standalones create a concept that caters to the local market and in an era of experiential travel, end up seducing the hotel guest. Unfortunately, many restaurateurs confuse concept with menu. A restaurant concept is not just a menu, some recipes and standard operating procedures. Rather, it covers a location, a marketing strategy, a service style, design, ambiance, price point, a defined position in its competitive set and, equally as important as the food itself, a long-term strategy and commitment.
Restaurant closures happen all the time, and for many reasons. The main reason is when the restaurant operator ignores the cornerstone of its very existence – which is the execution and delivery of proper food as a top priority. Very often, restaurant owners just do not realise that they are serving sub-par fare. Sometimes it can be due to the lack of taste or quality – but more often it is because of a breakdown in the chain of command and quality control. Day-in and day-out food preparation and presentation becomes routine — sometimes almost a factory-like motion and this can lead to skipping steps and cutting costs by leaving out key ingredients over a period of time. Eventually, these restaurants are so awful that they should be closed. Others, that seem to have deep, healthy roots with years of business behind them, also close down, perhaps unable to keep up with the constant market changes or unwilling to change themselves.
Some restaurants close despite being at the very top of their game. ElBulli a Spanish restaurant could have operated for years to come; it had only 8,000 seats available, and yet had more than two million requests every year. However, Owner and award-winning chef Ferran Adria felt his ElBulli which topped a renowned World's 50 Best Restaurants list a record five times had completed its journey as a restaurant. Indeed, a remarkable journey… of 27 years.
Shafeek Wahab – Editor, Hospitality Sri Lanka, Consultant, Trainer, Ex-Hotelier |
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