Hotel-Restaurant Co-Branding

Abstract

This article describes the economic and operational value-and the potential drawbacks-of pairing brand-name restaurants with hotels that previously operated a non-branded restaurant. After analyzing survey responses and the results of personal interviews, the study's findings were inconclusive regarding whether there were across-the-board qualitative or quantitative benefits created for both a hotel and restaurant when co-branding occurred (relative to what each entity might achieve independently of the other). In some cases, where a hotel company is large enough to pull it off, operating a proprietary F&B outlet may be the best approach, as doing so gives the hotel operator unfettered control over the restaurant's operations (e.g., operating hours, menus, and flexibility for room service and banquets). On the other hand, accommodating a leased or franchised restaurant removes many of the headaches associated with hotel restaurants and takes advantage of the professional expertise and advertising clout afforded by many chain-restaurant companies. In most cases those properties that engaged a brand-name F&B operator experienced increased occupancy and improved F&B sales, but the data are inconclusive as to whether those increases would have occurred in any event.