News Article | 9/2/2006

Restaurants: Chefs Check In

One of Chicago’s most heralded new restaurants this season isn’t opening on the Magnificent Mile, but in a 411-room suburban hotel. In Boca Raton, Fla., renowned French chef Christian Delouvrier will unveil his latest outpost in a sprawling resort. And Tom Colicchio, a star of the Manhattan food scene, just opened in a W hotel in Dallas. Mr. Colicchio says many chefs have shunned hotels in recent years as unfashionable, but now “it’s changed.”

The new crop of restaurants opening across the country this fall will bring further twists on the steakhouse (mini tenderloins) and French bistros that toy with tradition (halibut — with orange marmalade). But the biggest shift in fine dining is where many of the most anticipated new restaurants are opening: hotels. Taking their cue from a few recent successes — notably Joël Robuchon at the MGM Grand in Las Vegas — chefs are increasingly opting for the busy lobbies of convention hotels and four-star boutiques.

For hotels, there’s a potentially lucrative payoff. In most deals, they receive a hefty cut of the restaurants’ revenue — while simultaneously boosting their cachet with a big-name chef on the property. For chefs, signing on with a hotel can mean trading off some profits in exchange for the lower risk that comes from having a deep-pocketed backer to help foot start-up costs. And while not that long ago most chefs were content to stay based in one city, now more want to achieve celebrity status. Hotels, which have locked up prime real estate in tight markets, offer a shortcut to taking chefs’ brands national and a steady stream of hungry guests.

In the past, some of these arrangements have left diners skeptical that famous chefs with their names out front can deliver even while they are shuttling between dozens of outposts. Now, hotels are establishing contractual requirements they say will help guarantee quality, namely by insisting chefs spend more time in the kitchen rather than leaving the cooking up to their minions.

For Todd English, that entails traveling to Louisiana at least four times a year to check in on Riche, his soon-to-open French restaurant at Harrah’s New Orleans Hotel & Casino. Though Mr. English has several other hotel restaurants under his belt, this latest deal comes with stricter terms, according to his company’s director of operations, Allison Williams. In addition to requiring his presence for two to three days each quarter, Harrah’s has made his compensation more dependent on the restaurant’s financial success; he will earn a minimum of 10% of total revenue, plus 3% to 7% of profit. A few years ago, a typical deal would have guaranteed him 18% of total revenue for what Ms. Williams calls “a pretty loose involvement.”

The concept of a top-notch hotel restaurant has a long tradition, both in the U.S. and Europe. But during the celebrity-chef boom of the 1990s, many up-and-coming restaurateurs were more interested in planting their flags in trendy neighborhoods like New York’s TriBeCa or Melrose in Los Angeles. Now, not only are chefs eyeing hotels again, they’re willing to go beyond the established grandes dames to big chains and spots in the suburbs. With Mr. Robuchon receiving rave reviews in Las Vegas and Alain Ducasse cooking in New York’s Essex House, hotel restaurants have gained some glamour.

But there are risks. Top chefs can have their reputations damaged when diners and critics start to view them — justly or not — as overextended. When Wolfgang Puck started to venture into everything from airport terminal cafes to frozen pizza, becoming more of a businessman, he saw his culinary standing suffer. More recently, Jean-Georges Vongerichten, who just a few years ago was a critical darling, has taken knocks for spreading himself too thin and letting the food suffer at Mercer Kitchen, located in the Mercer Hotel in Manhattan. Mr. Vongerichten’s longtime business partner, Phil Suarez, says they don’t believe he’s overextended: “There’s no crime in being entrepreneurial.” Robbie Vorhaus, a spokesman for Mr. Puck, says the chef is involved in every aspect of his restaurants, “no matter where he is on the planet.”

With hotels jealously guarding their chefs’ time in these new deals, the chefs may not be able to pay sufficient attention to their established nonhotel outposts. It remains to be seen whether local diners looking for a night on the town will balk at paying top dollar to dine in a suburban chain hotel, since prices at these places are typically in line with those at top restaurants in city locations.

The latest deals are leading to some culture clashes in the kitchen. Some hotels expect these haute-cuisine-trained chefs to weigh in on the club sandwiches and shrimp cocktails of their room-service menus. Restaurant consultant Clark Wolf says few high-end restaurants rely on union employees, so dealing with hotels’ unionized work forces can pose challenges for chefs. Not only can labor costs be 50% higher than in nonunion environments, say industry consultants, but according to some contracts, waiters aren’t required to pick up dropped forks — that’s housekeeping’s job.

Nevertheless, many chefs say the realities of the restaurant business make hotel deals attractive, says Elizabeth Blau, a restaurant consultant in Las Vegas. Low profit margins — typically about 5%, with only the most successful restaurants getting as much as 20% — mean expansion is often the surest way to make money.

Volume can be higher, too. At the new L’Atelier de Joël Robuchon at the Four Seasons in New York, hotel guests often show up in the dining room as early as 5 or 6 p.m., says general manager Christoph Schmidinger, so it’s possible to turn the tables an extra time. Partnering with a hotel also offers a cushion: They usually pay the start-up construction costs and handle the construction nightmares. “I did three restaurants myself,” says chef Michael Mina, who in the past four years has opened only with hotel partners, “and there was no pleasure in it.”

For chef Rick Tramonto, his first foray into hotel dining started last November with a meeting with Chicago developer Peter Dumon. Known for his two downtown hot spots, Tru and Osteria Via Stato, Mr. Tramonto won a James Beard Award for best Midwest chef in 2002. Though Mr. Dumon originally was looking for help renovating one of his existing hotel restaurants, the two men ultimately hatched a more ambitious plan: to expand Mr. Tramonto’s brand in hotels across the country.

First stop: the new Westin hotel in Wheeling, Ill., with 35,000 square feet of meeting space and rooms that start at $115. Mr. Tramonto is spearheading four restaurants there, including a steakhouse and an Italian osteria. The chef says he spent time in Italy this summer looking for recipes for the morning breakfast rush. “It’s cool,” he says. “I love breakfast and never get the chance to cook it.”

He and Mr. Dumon operate the restaurants, which cost $12.5 million to build, with two other partners in a new joint venture called Cenitare. Mr. Dumon says he expects them to bring in $15 million to $20 million in sales a year, compared with an estimated $17 million the hotel will earn from rooms. Cenitare’s plans include opening four to six new Tramonto restaurants a year in places like Scottsdale, Ariz., New York and Naperville, Ill., where Mr. Dumon has acquired a Holiday Inn Select that he plans to convert to a Marriott.

Earlier this year, Starwood Hotels and Resorts announced an alliance with Mr. Vongerichten and private-equity firm Catterton Partners. It plans to open 50 or more of the chef’s restaurants over the next four to five years, at the company’s properties and elsewhere, and also gives Mr. Vongerichten an early shot at heading any new spaces at Starwood’s upscale hotels.

When it comes to the food itself, the restaurant scene — both in hotels and elsewhere — this fall is swinging slightly more conservative. Steakhouses, for example, are gaining traction, in part because they’re considered a safe choice by business diners, say restaurateurs. Mr. Mina, mainly famous for seafood, will open his first steakhouse in Las Vegas. French food also is coming back, often with less extravagant takes on traditional meals.

Even some of the most ambitious chefs are hitting simpler notes. Thomas Keller, known for his complex dishes at French Laundry, is planning a more casual Burgers and Bottles in Yountville, Calif. There is also a spate of high-end ethnic restaurants, including a Northern Chinese restaurant with French influences in a New York boutique hotel, an Indian place in Boston focusing on hot-stone cooking and a sprawling sushi restaurant in suburban Chicago.

As for the hotel boom, Philadelphia restaurateur Stephen Starr is opening his first two hotel restaurants, Continental and the Asian-fusion Buddakan, at the Pier at Caesars in Atlantic City, N.J., later this month. He says the casino’s backing is crucial: “It’s guaranteed space and tourists, like an insurance policy.” With that kind of traffic, it’s like “selling the burgers at Disney World,” he says. “We’re looking to get as close to that as possible.”