The pandemic has delivered a severe blow to the HoReCa business, with multiple companies forced to end their operations or shrink significantly. On the other hand, though, the unprecedented situation has come with new opportunities and ways to operate unseen before. Pairing a hotel with a cloud kitchen can be a great example of this.
The ghost kitchen (or cloud kitchen) industry is developing dynamically, with a market worth (according to EMR data) of $31.3 billion in 2020 and a predicted value of $64.3 billion by 2026.
On the other hand, the hospitality sector is recovering from the pandemic, yet slowly. The American Hotel & Lodging Association released its 2022 State of the Hotel Industry report, developed with Accenture, where it states that the revenue is predicted to reach the levels known from 2019, with travel restrictions halted and events returning to the realspace from the internet. Yet the hotel owners are less optimistic when thinking about the business travels.
Considering the data mentioned above, there are two industries – a smaller yet dynamically growing and a large established market that struggles to return to the pre-pandemic levels.
An unlikely pair, apparently.
What is a ghost kitchen?
Ghost kitchen (or dark kitchen, or cloud kitchen – there are multiple terms naming a similar concept) is a way of running a restaurant, where there is no physical space to serve the meal. All customer acquisition and marketing are done digitally. There are no tables, no sheets, and no chairs. There is no need to invest in decorations and maintain the indoor mood of the place.
The customer gets his or her meal delivered right at their doorstep by a delivery company, be that Uber Eats or a specialized delivery service hired by the ghost kitchen itself. More about the concept of ghost kitchens and ways to run this type of business can be found in our complete guide to ghost kitchens.
How to run a ghost kitchen in the hotel
A hotel owner, especially when it comes to a more exclusive facility, usually runs a high-quality restaurant that serves meals to the customers. Delivering a breakfast and a dinner is the most common way to serve meals, yet there are multiple approaches with an open bar or snacking spaces also seen.
When it comes to switching from a typical near-hotel restaurant to the cloud kitchen model, there are three ways to follow:
- Own a ghost kitchen – in this model the hotel owner rents the owned kitchen to an external partner, who pays for the utilities as well as delivers a stable income in exchange for the ability to run the ghost kitchen business using the hotel infrastructure. With hotels benefiting from great localizations with convenient commuting, this deal can be of great mutual benefit both for the hotel and the tenant.
- Run a ghost kitchen – the second model makes the hotel not only the owner of the space but also the entity responsible for running the online virtual restaurant. This requires significantly bigger commitment and investments as well as comes with the opportunity for greater income, more flexibility, and increased business resilience.
- Rent a ghost kitchen – last but not least, this option is a leap of faith. The hotel decides to cut the owned kitchen and restaurant and outsource all the kitchen services from the ghost kitchen. It can be considered risky, yet the savings can be convincing.
Picking the right model requires a great deal of analysis and counting all pros and cons of the possible model. When counting them and thinking about reshaping its hotel, the company needs to consider:
Owned processing powers
It is common for hotels to own an oversized kitchen that stands still except during the morning and dinner-time peaks. The infrastructure needs to process a swift meal delivery for over a hundred (or more!) guests, yet it stands unused during the noon or early evening hours.
If it is so in your hotel, the excess processing powers can be utilized to generate an additional income. If not, and the kitchen is not underutilized at all, there may be no need to switch to the cloud kitchen model at all.
Also, if the kitchen is on the edge of overload, maybe switching to an external partner can be a relief for the manager and staff alike.
Forge a strategy
Knowing the current state of the kitchen’s processing power, there can be a strategy delivered. It needs to answer several vital questions. For example:
- How the meal delivery to hotel guests will be secured?
- How the priority of guests over external customers will be assured?
- What if the partner would not deliver what he or she agreed to?
- Who and how will be responsible for the profitability and management of the kitchen?
- What will be considered a success? How the success will be measured?
- What are basic goals and what are additional ones?
Having these questions answered the company can embrace the change and approach the new reality by having a plan. Is dominating a local delivery restaurant market a goal? Or reducing the costs of maintaining the restaurant? Or giving the guests new room service options?
Answers are up to you. But only knowing the answers will enable one to determine if the implementation has gone successful.
Pick the right tech stack
No matter which way will you choose, the right tech stack to support your transition will be required. Having an outsourced restaurant the customers will have to get new ordering tools. If the goal is to build an internal cloud kitchen, the need for tools will be even more severe, with the need to combine all digital channels to manage.
No matter which model has been chosen, the hotel guests need to get a new, convenient ordering tool, for example, a tablet in their room. A sophisticated system like Ordering Stack comes with multiple features that support all the models enlisted above. Depending on the way of implementation of choice, the system needs to support:
- Ordering meals via multiple channels, including the mobile one
- Queuing the orders depending on priority and the estimated time of delivery
- Managing the stocking
- Price analysis and business intelligence
Having all features mentioned above, the hotel can employ more sophisticated techniques to improve margin and boost the revenue, including for example the cross- and upselling or the menu engineering.
If the company aims to run or own a cloud kitchen, having a Kitchen Display System is another piece of restaurant tech to implement.
But hey! Is it going to work?
The good alignment between the hotels and ghost kitchens has been already noticed by the Radisson Hotel Group. The company aims to invest in the concept by building new hotels with cloud kitchens included and by repurposing the kitchens in existing hotels.
The key goal of the transformation is to deliver more efficient and diverse room service, for example by including wider menu options available from multiple operating cloud kitchen brands. Also, running the cloud kitchens has been named an “obvious way to increase revenue”.
The cloud transformation of kitchens in the Radisson group is aimed for the upcoming 10 years. The final goal is to build a standalone business unit of ghost kitchens paired with hotels.
If you wish to talk more about the ways your hotel restaurant can benefit from cloud kitchen transformation, don’t hesitate to contact us now!