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December 20, 2024by David Klemt David Klemt No Comments

You Will Fail Without Strategic Clarity

Why Your Business Will Fail Without Strategic Clarity

by Doug Radkey

Success in the hospitality industry—whether operating a bar, restaurant, or hotel—requires more than just passion, ambition, and a quality concept.

In addition to all of the above, success demands strategic clarity. Put simply, this is the ability to see the big picture while understanding the smallest details possible of how your business will operate, scale, and, most importantly, drive profits.

Without this clarity, even the most creative and exciting ideas face a high risk of failure.

In summary, without clarity, you’re just reacting; with it, you’re leading.

Let’s explore the definition of strategic clarity, why it’s a non-negotiable, and why your hospitality business cannot succeed without each of these strategic playbooks: feasibility study, conceptual playbook, prototype playbook, brand strategy playbook, tech-stack playbook, marketing playbook, financial playbook, and business plan playbook.

What is Strategic Clarity?

Strategic clarity goes far beyond writing a mission statement or setting sales goals.

Strategic clarity is the alignment of vision, goals, and actionable steps required to move a business from idea to concept to sustainable success. It’s about building a solid foundation that guides every single decision; from idea, to concept, to hiring staff, to launching and everything in-between.

Strategic clarity is the DNA of your business.

In the hospitality industry, strategic clarity ensures that every decision is cohesive and aligned with your target audience, operational capabilities, and long-term goals. Strategic clarity eliminates guesswork, reduces risk, and increases your odds of building a highly profitable business.

Why is Strategic Clarity a Must?

Without strategic clarity, businesses are left vulnerable to disjointed efforts, misaligned goals, and reactive decision making.

These issues not only waste time and resources but can also alienate your guests, frustrate your employees, and diminish your levels of profitability.

Now, let’s dive into why strategic clarity—and each of the eight key playbooks—are non-negotiable for a winning hospitality business.

1. Feasibility Study: The Foundation of Success

Why You Need It

A feasibility study lays the groundwork for strategic clarity by determining whether your bar, restaurant, or hotel concept can succeed in your target market.

This crucial study evaluates market potential, competitive landscape, and operational logistics, ensuring you make informed decisions before making major financial commitments, or signing a lease.

Without It, Your Business Will Fail Due To:

Lack of Market Insight: Skipping this step leaves you guessing about TAM (Total Addressable Market), SAM (Serviceable Addressable Market), and SOM (Serviceable Obtainable Market), risking a misaligned business model and wasted resources.
Poor Location Choices: A feasibility study helps you identify the optimal neighborhood, property size, site requirements, and development budgets for a variety of scenarios, saving you from costly real estate mistakes.
Data-Driven Decisions: This study offers industry trends, technical specs, and competitor analysis, ensuring your planning is backed by actionable data.

- Example: Consider a boutique hotel targeting luxury travelers. A feasibility study explores guest demographics and psychographics, seasonal fluctuations, spending behaviors, and the region’s existing upscale offerings. This data shapes future pricing strategies, internal programming selection, operational requirements, and marketing efforts, turning assumptions into calculated strategies.

2. Conceptual Playbook: Your Vision on Paper

Why You Need It

The conceptual playbook translates your vision into a strategic framework, defining how your brand comes to life through design, experience, and operations.

This playbook aligns creative and functional elements into a unified, market-ready concept.

Without It, Your Business Will Fail Due To:

Lack of Clear Direction: Without precise definitions for design, fixtures, furniture, equipment, uniforms, menus, and guest experiences, your business risks becoming a fragmented idea, leaving both guests and staff unclear about the brand’s identity.
Team Misalignment: You and your shareholders, support team, development team, and employees need a clear understanding of your concept to execute the vision, and deliver consistent experiences.
Failure to Stand Out: A distinct concept differentiates you in a saturated market, helping carve out a memorable niche. Let’s take a look at two sample scenarios:

- Restaurant Examples
  - A Restaurant Without a Conceptual Playbook: Generic tables and chairs, mismatched menus, and a lack of on-brand marketing leave little impression.
  - A Restaurant with a Conceptual Playbook: A coastal-inspired bistro with subtle and authentic sea-themed décor, locally sourced seafood menus, and immersive guest experiences creates a more lasting impact, and nurtures guest loyalty and repeat visits.
- Hotel Examples
  - A Hotel Without a Conceptual Playbook: Standard rooms, impersonal service, and forgettable interiors offer no unique appeal.
  - A Hotel with a Conceptual Playbook: A retro yet modern boutique hotel showcasing local craftsmanship, personalized service, and a curated lobby café makes every stay an unforgettable one.

By defining your vision clearly and cohesively, a conceptual playbook transforms your business idea into an operational reality with market differentiation and lasting success.

3. Prototype Playbook: Testing and Refining

Why You Need It

The prototype playbook enables precise testing, refining, and scaling of your concept before making full-scale investments.

This playbook minimizes costly guesswork, instead providing a clear path from design to operational implementation.

Without It, Your Business Will Fail Due To:

Uncontrolled Budgets: Without defined prototypes, development costs can spiral due to unexpected adjustments in design, layout, or FFE (Fixtures, Furniture, Equipment) integration.

- Examples
  - A Bar Without a Prototype Playbook: Custom bar counters are ordered without consideration for staff flow, causing expensive retrofits.
  - A Bar with a Prototype Playbook: Space-optimized bar counters with exact dimensions ensure smooth service operations, and controlled costs.

Resource Waste: Testing workflows, layouts, and service models in a prototype phase reduces inefficiencies and operational bottlenecks.

- Examples
  - A Restaurant Without a Prototype Playbook: Kitchen layout errors slow service, causing delays and increasing labor costs.
  - A Restaurant with a Prototype Playbook: Pre-tested kitchen zones ensure efficient service, reducing wait times and boosting profitability.

Limited Scalability: A well-developed prototype ensures your concept can adapt to various property sizes, layouts, and markets, making expansion more feasible.

Testing, refining, and scaling concepts through a prototype playbook ensures businesses can develop precise start-up budgets while reducing risk, optimizing resources, and positioning themselves for sustainable, scalable growth.

4. Brand Strategy Playbook: Building Your Identity

Why You Need It

The brand strategy playbook establishes your business’ core identity, aligning every guest interaction with your values, messaging, and market positioning.

It ensures that your brand resonates with the right audience while creating lasting, emotional connections.

Without It, Your Business Will Fail Due to:

Lack of Clear Identity: A poorly defined brand confuses potential guests, diminishing credibility and loyalty.

- Examples
  - A Bar Without a Brand Identity: Random décor, inconsistent service styles, and a generic menu fail to create memorable experiences, leaving guests disengaged.
  - A Bar with a Brand Identity: A retro-inspired cocktail lounge with mid-century modern décor, tailored music playlists, and vintage-inspired cocktails creates an immersive guest experience.

Failure to Attract Guests: A distinct brand aligns with target market values, sparking curiosity, and driving foot traffic.

- Examples
  - A Bar Without a Brand Strategy: A new bar opens with no thematic focus, minimal marketing, and a generic online presence. Potential guests pass by without interest.
  - A Bar with a Brand Strategy: A speakeasy-themed bar launches with curated social media content, influencer collaborations, and press coverage, creating buzz and becoming the city’s hottest new spot.

Ineffective Marketing Campaigns: Marketing without a brand strategy leads to disjointed campaigns that fail to engage or convert potential guests.

- Examples
  - A Marketing Campaign Without a Brand Strategy: A basic ad promoting generic happy hour specials attracts price-sensitive guests but creates no brand loyalty.
  - A Campaign with a Brand Strategy: A cinematic video showcasing mixologists crafting signature drinks boosts brand engagement, and drives repeat visits.

Your brand strategy playbook is more than just a logo. It ensures every detail, from service tone to visual identity, works in harmony to position your business as unforgettable and irreplaceable.

5. Tech-Stack Playbook: Leveraging Technology

Why You Need It

The tech-stack playbook ensures your business leverages cutting-edge tools and systems to streamline operations, elevate guest experiences, and unlock valuable data-driven insights.

In today’s digital-first landscape, technology is no longer optional—it’s another non-negotiable.

Without It, Your Business Will Fail Due To:

Operational Inefficiencies Causing Chaos: Without integrated technology, processes break down, leading to delays, wasted resources, and unhappy guests. The right tech stack synchronizes workflows. Think reservation systems that align with table turnover rates, or POS systems that monitor real-time inventory levels, preventing over-ordering.

- Examples
  - Inefficient Operations: A restaurant using outdated manual inventory processes faces unexpected stockouts, leading to missed sales and guest frustration.
  - Efficient Operations with Tech: A cloud-based POS with inventory management ensures automatic reordering alerts and prevents shortages during peak hours.

Failure to Meet the Guest Demand for Seamless Tech-Enhanced Experiences: Today’s guests expect convenience. From contactless payments to personalized services, technology bridges the gap between expectations and delivery.

- Examples
  - For Restaurants: Tableside ordering tablets reduce wait times, while QR code menus provide instant access to specials and allergen information.
  - For Hotels: Mobile check-ins, room key apps, and smart room controls create frictionless stays, differentiating your property immediately.

Missed Opportunities: Without the right technology, you forfeit valuable analytics that could shape your business. Actionable data reveals trends, such as best-selling dishes, total guest revenue management, or high-margin offerings, enabling smarter decisions.

By aligning the right systems with your business model, you can deliver efficiency, meet evolving guest expectations, and mine insights to fuel your growth.

The question isn’t whether you need technology, it’s whether you’re leveraging it effectively to gain a competitive edge.

6. Marketing Playbook: Reaching Your Audience

Why You Need It

Your marketing playbook is the roadmap to attracting, engaging, and converting guests through well-orchestrated campaigns across digital, social, and traditional channels.

This playbook defines your unique voice, message, and tactics that resonate with your target market.

Without It, Your Business Will Fail Because:

You’re Invisible to Guests: The “build it, and they will come” approach is a myth. A strong marketing playbook ensures visibility through SEO, social media, PR campaigns, and community partnerships, positioning your business in front of the right people at the right time.

- Examples
  - A new bar without a marketing plan might rely solely on word of mouth, leading to slow growth, and unpredictable traffic.
  - A bar with a marketing playbook uses social media promotions, influencer partnerships, and a launch event to create buzz, providing immediate brand awareness, and generating foot traffic.

You Waste Money on Ineffective Campaigns: A marketing playbook defines objectives, key performance indicators (KPIs), and actionable steps, ensuring every marketing dollar spent delivers a measurable return. Let’s look at a sample result:

- Sample of Measurable Results: A bar runs a social media campaign promoting a new seasonal cocktail menu.
  - Goal: Increase weekend reservations.
  - Campaign Action: Targeted social ads with a direct booking link.
  - Result: A 35-percent increase in table bookings within 30 days, tracked through specified promo codes, POS integration, and follow-up metrics through brands such as Ovation.

You Can’t Build Loyalty: Consistent messaging and guest engagement cultivates trust, fostering repeat visits and long-term brand loyalty.

- Example
  - A restaurant with a clear marketing strategy shares behind-the-scenes content regularly, offers loyalty rewards, and sends personalized email offers, keeping the brand top of mind among their most valuable guests.

A well-defined marketing playbook is not just a promotional tool, it’s the engine that drives visibility, guest engagement, and long-term loyalty. It ensures your brand stays relevant, compelling, and profitable in a competitive landscape.

7. Financial Playbook: Managing Money Wisely

Why You Need It

The financial playbook is your blueprint for sustainable profitability, guiding budgeting, forecasting, and cash flow management. It transforms your concept from an idea into a financially sound reality.

Without It, Your Business Will Fail Because:

You Won’t Secure Funding: Lenders and investors need detailed projections. A financial playbook builds trust by showing profitability scenarios, ROI timelines, and realistic financial goals.

- Sample Insight: A hospitality group secures $2M USD for a new cocktail bar by presenting a robust financial playbook that presents realistic five-year forecasts, start-up budgets, and more.

You’ll Run Out of Cash: Poor financial planning is a top cause of failure. Without a playbook, unexpected expenses or under-funding can derail your project long before you look to open your doors.

- Example: A boutique hotel underestimates renovation costs due to lack of a prototype and detailed budgets. They deplete funds before opening, delaying launch, reducing lender trust, and increasing their debt load before the first booking.

You’ll Have No Financial Control: Comprehensive playbooks monitor expenses, optimize pricing, and maximize profitability with tailored start-up projections, investment scenarios, mock labor schedules, day-part/occupancy strategies, P&L statements, cash-flow forecasts, cost-channel analysis, modern revenue management strategies, and contingency plans.

- Real-World Impact: A midscale hotel uses financial modeling to adjust day-part strategies, increasing off-peak revenue by 40 percent, and reducing operational costs by 15 percent.

A financial playbook isn’t just numbers. This playbook is a strategic tool ensuring your business remains solvent, scalable, and investor ready from day one. It prevents costly surprises, and drives long-term profitability through proactive financial control.

8. Business Plan Playbook: Day-to-Day Operations

The business plan playbook serves as the operational backbone of your hospitality business, guiding daily activities from front-of-house procedures to back-end management.

Contrary to common belief, it should be the last playbook developed. The business plan playbook should be completed only after assessing the feasibility of your idea, and defining your concept, prototype, brand, tech stack, financials, and marketing strategy. Taking this approach ensures every operational detail is driven by data, and aligned strategically.

Without It, Your Business Will Fail Because:

Your Team Lacks Structure: Employees need clear roles, expectations, and procedures. Implementing Six Sigma and Kaizen methodologies within your playbook fosters a culture of continuous improvement and operational efficiency.

- Example: A bar without defined staff roles experiences high turnover due to confusion over responsibilities. After adopting a playbook with structured roles and SOPs, turnover drops by over 55 percent.

You Can’t Deliver Consistency: Inconsistent operations harm the guest experience, and lead to negative reviews. A comprehensive playbook ensures processes are repeatable, scalable, and centered around guest satisfaction.

- Example: A boutique hotel improves its guest satisfaction score by over 70 percent after implementing SOP-driven check-in/out procedures, housekeeping standards, and personalized guest touchpoints.

You Struggle to Adapt: An operations playbook allows businesses to pivot quickly when challenges arise. Whether adapting to changing guest expectations or responding to market shifts, your team will have a clear, proactive roadmap.

- Example: A restaurant navigates supply chain disruptions by referencing its contingency plan within its business playbook, securing local supplier contracts that reduce delays.

Unlike static business plans, a business plan playbook evolves with your business. It’s a dynamic, action-oriented guide that adapts to market changes, ensuring your business remains agile, efficient, and competitive. With a playbook, you don’t just plan—you execute with precision and purpose.

The Ripple Effect of Strategic Clarity

Strategic clarity doesn’t just enhance isolated parts of your hospitality business—it creates a synchronized, efficient, and scalable operation.

Master the eight essential playbooks to not merely start, stabilize, or scale a business but to build a legacy primed for adaptability, growth, and industry leadership.

Imagine this Impact

Picture presenting a fully developed suite of playbooks to investors, landlords, or partners. You’ll exude confidence, backed by precise strategies in which they can place their trust.

This comprehensive approach distinguishes you from businesses relying on generic, templated, or AI-generated plans. (Yes, banks and investors can tell when a business plan has been generated by artificial intelligence.)

Don’t Leave Success to Chance

Success in hospitality is both challenging and rewarding. Without strategic clarity, even the best ideas risk failure.

This framework positions your business within the top 20 percent that surpass the five-year survival mark.

Why This Matters

Without strategic clarity, you risk being in the 80 percent of operators that fail. Why do that to yourself?

The industry’s high failure rate stems entirely from a lack of well-defined strategy. At KRG Hospitality, we specialize in crafting bespoke playbooks that drive clarity, confidence, empowerment, and freedom.

Want to learn more? Join our next 60-Minute Start-Up Masterclass, or contact us today for personalized consulting.

Take action now—success doesn’t happen by accident.

Image: Canva

Looking to Start, Stabilize, or Scale? Book Below to Setup a 60-Minute Result-Driven Impact Session.

Bar Hacks: ReFire podcast "black paper" background cover

December 19, 2024by David Klemt David Klemt No Comments

Bar Hacks: ReFire: Episode 1, Part 2

Bar Hacks: ReFire: Episode 1, Part 2

by David Klemt

The second of three real-life hospitality scenarios discussed on the new Bar Hacks: ReFire podcast deals with onboarding.

More explicitly, I, along with cohost Bradley Knebel, client services director at Empowered Hospitality, look at a situation involving onboarding, training, leadership, culture, and potential imposter syndrome.

Our goal with every episode of ReFire is for listeners to gain valuable insights into bar, restaurant, and hotel operations.

Whether you’re a bar owner, manager, or aspiring hospitality professional, these episodes of Bar Hacks offer a wealth of knowledge and strategies to navigate the challenges of running a successful bar or restaurant.

Below, a transcript of the second part of the first episode of Bar Hacks: ReFire. For the lightly edited transcript of the first situation we addressed, click here. Bradley and I jump into each scenario cold (for the most part), so the tone is conversational rather than formal. In other words, they sound better than they read.

Cheers!

The ReFire Format

David: So, for the audience, what happened is, I sifted through… I’m basically going through online—there’s subreddits that, basically, everybody knows there’s a subreddit for everything. Good or bad, there’s a subreddit for it. Servers have a subreddit. Bartenders, chefs, bar owners, restaurant owners, hotel owners… I mean, they all have subreddits. And then there’s just, you know, forums all over the internet. You can find pretty much any topic. And so, I’m kind of sifting through these for real-world situations. And the caveat there is we’re gonna take these at face value, for the most part. Unless someone is like, “I’m just kidding,” like, “I got you all like in the comments…”

But we’re going to accept that these are really happening, because anyone in the industry knows if you’ve been in there, you know, for a few years, everything happens in this industry. So, a lot of this stuff is believable, even as outlandish as it might sound. The only thing I’m going to do, really, and Bradley’s going to do when we bring these topics up, is we’re not going to read them verbatim. We’re going to summarize. And the reason for this is I don’t want people to get doxxed. I don’t want them to, you know, get review bombed because someone decided, “I’m going to side with the server on this and let’s review bomb this operator.” You know, things like that.

So, we’re trying to be general but still get to the crux of the situation, and I’m sure they’ll get more specific as we go. I chose three to start with; hopefully, we get to all three. If we have a great conversation on, like, the first one or two, we’ll save the third one, or you know, however it works, for the next one. But that’s how this is gonna work. I’m sure it’ll evolve, ‘cause I’m not, like, a strict, like, “Oh, this is how it’s going to be” ‘cause it’s quote-unquote “my podcast,” because I’m not like that. We’re going to have fun with this.

Situation 2: Imposter Syndrome and Onboarding

David: So, situation two. This bartender, the way they phrased it, I don’t think they ever did a year straight with one employer. And I’m not saying that’s a bad thing. Like, it’s like you just said, it’s a transient business.

Bradley: Transient.

David: The experience they had was, I’m gonna go with, like, “high-volume,” but you know, it’s a college bar, a dive bar, which I… Apologies to Travis Tober, he does not like that term. He likes “neighborhood bar,” and I agree.

Bradley: I also could have felt like something like an Olive Garden or an Applebee’s, especially because they talk about how many steps there are.

David: Good point. It could be a neighborhood chain restaurant, and they’re behind the bar. That’s absolutely possible. It’s not the Baccarat Bar, we’ll just put it that way, where their experience came from.

They got hired by a more upscale, higher-end venue. They were given one training shift. And from what I could determine, the cocktails routinely had a minimum of six ingredients. So, lots of steps, and yet it was still high-volume because it was a popular bar.

So, it’s high-volume with a lot of steps, which.. That was cool, you know, call it a dozen years ago, 15, when, like, “Wow, I’m gonna wait ten minutes for this cocktail ’cause it’s supposed to be awesome.” Where now people are like, “I don’t care if it’s 30 ingredients, I want this thing in three seconds ’cause I’m not standing here, and your team is supposed to be high volume.”

So, they got the one training shift—that was it. And the ownership and leadership team appears to like to sit at the bar. And I don’t know if this is when they’re working; that wasn’t made clear. But the person feels they’re being scrutinized. They have questions. It sounds like they asked a question, at least one question, and got a very, in their opinion, terse and impatient reply. They now perceive this culture as they do not have patience for questions. “I have to just know my job. I’ve got to get these cocktails down. I have to be perfect.”

And I’ll kick this off by saying it is possible this person is just so in their head because it’s imposter syndrome, and they got one training shift, and now they, because it’s one training shift, are in their head, saying, “I have to be perfect now; I had my training shift. I can’t ask questions because I’m going to get fired or they’re going to give me less shifts because I don’t know, quote-unquote what I’m doing.”

So, it’s possible that just they’re not confident because they’re in their own head. However, that still had to come from somewhere. So, I do believe someone maybe—and I don’t even know—they gave him a short answer or a bit of a terse reaction because they’re just, maybe they’re having a bad day or they weren’t even thinking. They just threw an answer out and to them it’s not a big deal. It wasn’t a, a short or curt answer because that’s not how they meant it. They’re just like, “Yeah, you just do this,” and they walked away.

So, I think we both agree though that this does sound like we’re rubbing up on a culture issue, within the business. But they weren’t even trying to throw the ownership under the bus. They were just like, “Do I quit this job and go for something I’m more used to, or do I stick it out because this is more money?” It’s a higher-end venue, the tips are better. And I mean, the general consensus appeared to be like, “No, you stick it out. You can figure this out.” It’s bartending: If you did high-volume in an easy call bar, that’s still brutal. If you run a high-volume college bar, you’re getting destroyed. So, you should be used to it.

Just One Training Shift?!

Bradley: If it’s just Vodka Sodas all night, with splash of cranberry, or making, yeah, or you’re making, like, Death & Co. drinks to bring Dave back into the conversation, you know, bartending is hard. And, you know, there’s a reason that most volume bartenders, usually the higher volume the bar, the less touches there are. The less, kind of, ingredients per cocktail, right? It’s built for speed and efficiency.

So, I agree with you that this sounds a little bit like this person may be in their head a little bit, and maybe second-guessing themselves, or needing to build their confidence. But there’s a lot of things about this case that I think a lot of people can learn from. And the biggest flag to me is if this is an upscale cocktail bar, and if their signature ingredients have six- to eight-plus steps, which, first off, like, combine some of those into a cheater bottle or something. Like, come on, that’s crazy. But even if all of that is true, one training shift is absolutely not… Like, that, to me, is a huge flag. If I came into a bar, no matter if I’d been bartending for six months or six years, if I walked into a new space and they said, “Great, you get one shift, and now you’re on service bar,” like, that just is not a recipe for success, you know? And so, the reason that you and I kept talking about this being a cultural piece almost more than a training piece is, why is there only one training shift?

Are they just churning through people so fast that they literally just have to be live instantly because the owners are sitting at the bar constantly critiquing everybody? And are their cocktails built for their concept? And I think that is a big issue. If you have that many steps in your cocktails, but you have 150 covers in your space, like, there’s no way that those two things are going to meet. Even if you have 30 covers in your space, there’s no way that those two things are going to meet.

If it’s a purely cocktail bar where people are supposed to be coming in, and getting a bunch of different cocktails, and ordering something different every time. And so for me, from the employee standpoint, there are a few things that I would question, and I take issue with. Well, is this place set up to support me? You know, it’s funny because the last question, we talked all about the employer standpoint, right? Like, the employer standpoint against the employee. But it is a relationship. And it is, when we talk about interviewing a lot, right, that interviewing needs to be a dialogue. It isn’t just me asking you questions, you answering questions, and then “boom,” question two. It needs to be a dialogue.

And I think employment is a dialogue, right? You’re giving just as much to your employer as they should be giving to you. And that is in training, that is in culture. And so, how are they supporting you and your growth? And it sounds like here that they’re not, from a technical standpoint. And, like, I think it’s what probably most of the people on the thread were saying is, you can learn anything. You can learn all these cocktails.

Three Months

Bradley: Like, this is going to sound really dumb, but when I first started bartending, ’cause I am a virgo and a perfectionist and a Millennial, so, like, all those things just combined into a terrible mixture. But the first time I started bartending, I literally sat home. I didn’t have any pour spouts. So, I may or may not have borrowed them from work—I’m sorry, boss, I’m telling you this 20 years later—and put them into empty wine bottles. And I just practiced, because we also had to do counts instead of jiggering. And so I was just practicing until I figured out how it all kind of worked together.

And then the next thing is, you know, I tell people this all the time, that it takes three months just to figure out what your job is, and how to be good at it. Not to be good at it, just how to be. There’s different cultures, there’s different steps, there’s different people you’re dealing with.

How do I show up on time? What is my uniform? How do I get it cleaned? Where is everything set? What is my opening side work? When is lineup? Who are the regular guests? What do people usually order? What am I recommending? There are so many pieces of a job, especially in the dining sector, that come together that it takes you three months just to figure out. “Okay, what am I actually doing? How do I actually do it? What does success look like? What is my team here? And are they supportive or not supportive? And who can I lean on? And then also how do I get better?”

And then it takes another three months to get better. Whenever I’ve promoted a server assistant to a server, a server to a sommelier or a captain, you know, prep cook to a line cook, like, garde manger to, like, flat top, or if they’re looking, working on a grill. No matter what your promotion is, and actually the biggest one is from line level into management, right? So, like, going from a server or bartender into a manager for the first time is, give yourself some grace. It takes three months just to figure out what the heck is going on. Like, who’s here, who are the players, what am I doing, what’s important, how often do things rotate, how much do I really need to know these things? And that takes you another three months just to build that skill set. And so, if you’re working for an employer that gives you one training shift and then is critiquing you for not being perfect right off the bat, to me, that’s less of a flag of you not being a skilled bartender and more of a flag of this is maybe not a place that’s going to be supportive for knowing that the restaurant industry is so transient.

And the restaurant industry is a lot of times almost like the gig economy. Before that became my thing, it was the pre-gig economy. Are they going to be there to really help your growth, and as things change, and as you either get another bartending job—because very few bartenders have one job, they tend to have two or three. So, if you get another job, if you are in school, if you’re an actor or in some sort of artistic discipline and are going to need to go on show, how supportive are they going to be in view of that lifestyle? Or if you’re a dedicated bartender full-time, then this doesn’t sound like a bar that’s going to dedicate timing to you to grow.

So, my biggest pushback to this employee is, hey, get out of your head. You’re not going to be perfect. Like, you have to learn it. But is this a place that’s going to support you, or is it time to look somewhere else? Because I’ll tell you one thing—going to the last one (the first story of this episode). So, we’re in a talent shortage, still there. There is a plethora of jobs out there. And talk about the one job that’s almost most in demand on the front of house side, it’s bartenders. Bartenders who have done it for six months. When I was bartending and when I was hiring bartenders, especially pre-pandemic, if you didn’t have bartending on your resume for two years you wouldn’t get an interview. Now, if you’ve had bartending on there for three months, great, let’s go in. I’m going to ask you what a Cosmo is, and if you can answer, that’s question one, check. Different game.

Leadership Sitting at the Bar

David: And my one of my flags was: Why is management or leadership, if they’re sitting at the bar, I’m blown away by that. Like, what are you doing?

Bradley: That’s, that’s a revenue-generating spot. Yeah.

David: You just decided to voluntarily give up money. I don’t understand that. Like, what are you doing? And then do you micromanage everybody, or is it the bar team? And again, it’s perception. Like, did this person, every time they happen to look up because they’re not confident in themselves, perhaps do they think they’re being stared at by this team that’s not even looking at them? They just re looking around, like, “Hey, you need to touch that guest. That’s a VIP; we should go say hi. Those people look new, look like they’re having a blast. Let’s go introduce ourselves.”

We don’t know exactly what that was, but if you are micromanaging, I have a big issue with that because no one performs well under that kind of pressure, really. I mean, maybe a 20-year veteran bartender who’s like, “Yeah, you can micromanage me all you want, I don’t care. I’m gonna get this done, get my tips, and get out of here. Like, watch me all you want. I’m not doing anything, so go for it.”

But I do wonder… I mean, I don’t want, I don’t ever wanna see leadership or management lean against the bar, even a little. And sitting at the bar when they’re working, like, that’s not okay with me at all. I mean, yeah, you check in with the bar team, but you can do that from the side of the bar, you can go behind the bar, but to sit there… And now guests are like, “Why? Is this person, is this bartender not doing the right thing?” It just, it leads to a lot of questions either from the guest side, which you definitely don’t want, and from the team side, like, “Wow, this team, the leadership team, doesn’t trust me. And I (ostensibly) did nothing wrong, and they just are watching me like a hawk. Like, did I do something wrong?”

Like, it’s just, to me, it’s just too many questions. And I know there are people who, they’re micromanagers, but then maybe they need to be moved or spoken to or something. You just can’t do it that way anymore. It just doesn’t, it doesn’t work. And if you, if you are behaving that way, then why’d you hire this person? If you’re just going to watch them like that, then they shouldn’t have been hired or you’re in the wrong position, to be honest. Like, maybe you shouldn’t be a manager. Like, sorry, but that could be.

Coaching, Holding People Accountable, and Setting Standards

Bradley: I think there’s a big difference between coaching, holding people accountable, and setting standards versus micromanagement, right?

David: Absoutely.

Bradley: I think a lot of that—I mean, there’s a lot of very, I mean, specific differences—but I think it really comes from, are you doing it for the employee’s benefit, or are you doing it to control the output? Right?

So, you are never going to be able to replicate yourself. And this idea of people saying, “I need to find somebody who’s just like me, who’s going to do this just like I’m going to do so I don’t have to manage them,” is a fallacy. That’s not true.

It’s all about building standards, building practices, and holding people accountable, and coaching them in the moment, but not doing it through fear or doing it through anxiety. Because what does that do with somebody being watched, but they’re being watched with a knownn critical eye? Like, if somebody’s just being watched and, like observed, that’s one thing. If somebody’s being watched and observed where they know that they’re being nitpicked and critiqued, they’re going to fumble.

Think about it: No matter how confident you are, somebody comes in and says, “I’m going to rate you today.” The nerves happen. I mean, to use the Tokyo Olympics, like Simone Biles, even people at the highest caliber can get nervous when they know they’re being watched, and they know they’re being critiqued. And so, that has a whole separate issue. I just watched that documentary. But it really shows that we as human beings, we want to know our boundaries, we want to know what success looks like. We want to be helped and given the tools to achieve success. But if you’re just constantly nitpicking and aren’t, like, really helping me get there, then you’re just creating moments for me to have anxiety and get stressed. It’s just going to make me perform worse instead of better.

David: I did an assessment not long ago. Flew in, get there, and rumors already started like, I’m there to fire people. And that’s not what I… You’d have to, like, punch me in the face for me to be like, “You need to fire this person.” Like, that’s not what I’m there for. And turned out they had a platform they were using, and the bar team was really, they weren’t all outgoing [toward me]. When I was just trying to just talk and see what their guest service is like. How chatty they were. Just kind of watch them a little bit.

And the one bartender was like, “Oh, you’re from this company, right? You’re here to test us, right?” And I was like, “Do you want me to test you?” Like, what would I be testing on, cocktail builds? I’m like, “No, that’s not why. I don’t work for that company, and that’s not why I’m here. But if you want me to test you, I will.” And, then I got him to calm down, and he then totally relaxed. The rest of the bar team relaxed. So, yeah, if they even have an inkling that someone is in there to evaluate them, that’s a lot of pressure. I feel the same. I feel the same way when the client is watching me assess their team… They’re like, “Well, why is he watching that? Like, what does he see? Like, I feel pressure a little bit. I don’t want to screw up an assessment. Like, I don’t want to interpret this wrong. Yeah, it’s just pressure that you don’t need to put on someone.

Is There Even an Onboarding Process?

David: And also, before we on to the next one, it does make me think that there isn’t a onboarding process. And if there is, you have a training shift, and then now you’re a bartender. It’s like, okay, but if you’re micromanaging, I really don’t think that you have an onboarding process. Because if you did, you would trust the process, and let these people assimilate and get in their own grooves.

They’re not gonna work exactly how you expect them to. They’re bartenders, servers, whatever; they have their experience. They do what they’re gonna do behind the bar. They hold jiggers differently. They sometimes build cocktails a little bit differently. It just happens. So, I just don’t think that you actually have onboarding, and I definitely think, “Do you have manuals? Really?”If you are going to sit there and stare somebody down while they do their job that kind of brought that red flag where I don’t think there’s onboarding.

Bradley: I absolutely agree that there’s none. And I also have to wonder about people in that sort of environment. Because we’re kind of leaning towards we think that this is a pretty, maybe, aggressive micromanaging environment, which I think it is. At least, the person who wrote this thinks it is. But in those environments, too, the staff tends to band together a little bit, for better or for worse. And so I also wonder if he’s reached out to other bartenders. It’s like, “Hey, can you help me get this cocktail? I can’t figure it out.” Or, “How did you get faster at this?” Because, especially if it’s a tip pool, and whether tip pools exist in the restaurants at large or not, a lot of them in New York City do, but most bars are pooled in general just because it’s easier. And so, it incentivizes every other bartender to want you to be just as fast as they are. And so, is either this person too nervous to ask another bartender for help, or does the bar in general have a culture of just, kind of, like, sink or swim? Which, my very first server shift in my entire life was a sink-or-swin shift, and I had never served ever before. And I’ll tell you that that was a terrifying and terrible experience. Apparently I did okay, but it felt shitty the whole time.

So, culture starts the very first day. Culture starts, actually, during the interview process. And so, this employee doesn’t feel like they were set up for success. If they were set up for success, then they’re not the right fit for the company culture, where they just aren’t the right fit for what this bar is trying to do. But it also sounds like the owners, and/or management, and/or leadership could use a little bit of a, “Hey, you have to trust the team. You have to trust the process.”

“If you can’t trust the team, it’s the process that’s wrong.”

If you can’t trust the team, it’s the process that’s wrong. The training process is wrong. Your coaching and standards process is wrong. Your communication of systems is wrong, or you don’t have any. Also, again, there should never be a cocktail—and you, some people, will disagree with me, but then you can charge $50 for them—there shouldn’t be a cocktail that has that many steps to create. Especially if high-volume has anything to do with the bar concept.

David: Yep. There’s a bartender, bar owner out here in Vegas. They don’t like all the steps for a Sour, and they have developed a technique to remove one to two steps, make it that much faster. Their whole team knows it; anyone who’s working behind the bar there knows this technique. So, yeah, adding steps is… I have zero problem with keg cocktails. I think people for some reason think they’re hilarious. I mean, look at all the pour walls. People are like, “I’m gonna come to this bar and restaurant, and put money on a card to serve myself drinks.” Like, people like this kind of stuff. So, you can take steps out. Like you said, if you can can make housemade ingredients that much faster, then those are the right steps to take. And I’m sure the bar team would be like, “Yeah, we can do this if you’ll let us do it.”

Bradley: We had a rule that a drink on our menu should never have more than three touches. Right? You have the base spirit, you have one juice, and, you know, it was always, like, the combining of other ingredients, and then either one more or a bitters or something. Maybe you had four touches at the most. But you’re not sitting there trying to like reinvent the wheel every single time. If you always have a one-to-two ratio of a ginger syrup to some other juice, then just put it in a cheater, just put it in a bar bottle, and just have that two-to-one ratio because also you know it’s already measured, right? And so, prep, absolutely, just in the kitchen and in the bar, is the best recipe for success.

Going way off tangent for this topic, but it sounds like very little process exists here, right? There’s no onboarding process, there’s no training process. It seems like there might not be a good feedback process or coaching process. There’s definitely no bar process that I think is really setting the team up for success. Or this person is just so under-qualified and over-exaggerated that they came in and just, essentially, they’re like, “Oh, you’ve got this. You can do this in your sleep,” right? And then left. So, there’s something weird happening here. But I definitely think that it’s a mismatch between employer and employee.

“It’s all solvable.”

David: Yeah. And we’re not trying to roast the owner because we don’t know how much of this is true. Again, like I said in the beginning, we are taking these at face value, just as learning opportunities, really. So, it’s not like we’re like, “Oh yeah, this operator is terrible.” There does seem to be…there’s an issue. And again, the issue could literally just be this person is convinced they faked their way into this job ,and now it’s coming home to roost. And they have zero confidence because they’re trying to mask that: “Man, I probably don’t belong here.”

Which, again, I think is silly if you can learn this. And again, like, to your point, is the bar team cool enough to be like, “Hey, this impacts all of us. It impacts the servers. If this bar is slow and our drinks are slow, like, we all need to be…we can help you improve this.” Like, “Let’s do this.” And they obviously saw something in this person to hire them. I’m hoping it wasn’t just “here’s a body” if it’s a more upscale, higher-end spot.

So, that should tell them, hey, you got the job—nice. Gotta keep it. And you’ve done high-volume, most likely. If you worked in a college bar or a neighborhood bar, you’ve probably done volume. So, now it’s steps. It does suck: There are at least six ingredients in some of these signatures. Hopefully, there’s also, you know, people drinking G&Ts and Jack & Coke, and not a big deal. But this isn’t something that can’t be solved. And it’s either on the process side and leadership side, or it’s—

Bradley: Or it’s imposter syndrome.

David: Yeah, exactly. So, it’s just, what is the actual issue? It’s all solvable, is the great part of that one.

Note: Transcript provided by Eddy by Headliner, edited by author for clarity.

Image: Canva

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December 13, 2024by David Klemt David Klemt No Comments

Bar Hacks: ReFire: Episode 1, Part 1

Bar Hacks: ReFire: Episode 1, Part 1

by David Klemt

In the latest episode of the Bar Hacks podcast, I introduce an innovative format called Bar Hacks: Refire, tackling real-world hospitality scenarios.

Joined by Bradley Knebel, client services director at Empowered Hospitality, the first episode offers a fresh perspective on managing bar and restaurant challenges.

The discussion kicks off with a focus on staff management, addressing the question of rehiring former employees. What may seem like a simple question proves to be anything but when Bradley and I break down the interplay of labor shortages, cultural fit within a team, and other key elements.

Our goal, as it will be with every episode of ReFire, is for listeners to gain valuable insights into the decision-making process behind giving second chances, and the impact of such decisions on team dynamics.

Whether you’re a bar owner, manager, or aspiring hospitality professional, this episode offers a wealth of knowledge and strategies to navigate the challenges of running a successful bar or restaurant.

Below, a transcript of the first part of the first episode of Bar Hacks: ReFire. Bradley and I jump into each scenario cold (for the most part), so the tone is conversational rather than formal. Cheers!

Transcript: Bar Hacks: ReFire: Episode One

David: Hey, welcome back to the Bar Hacks podcast… We’re gonna try something a little different today with the format, and I’m kind of playing around with it. I think I’m gonna call it Bar Hacks: ReFire because we’re giving people a second bite of the apple for a situation that maybe we read about that we don’t agree with, or that we can study and kind of revisit as a way to give some advice.

But my guest today is Bradley Knebel. He is the client services director at Empowered Hospitality. He worked for, I wanna say a decade, for Danny Meyer’s Union Square Hospitality Group until a couple years ago. He was the GM of Tatiana, and he helped bring that restaurant to, I believe, a three-star review in The New York Times. It has also been recognized as the number one restaurant in New York City during its tenure. And we met at this year’s Flyover Conference, me and Bradley, and we were hanging out with the founders of that show, Sarah Engstrand and Greg Newman. (And just a little drive-by on Dave Kaplan, as well, was hanging out with us, of Death & Co.)

We just had some really great conversations, and some good drinks, and really good pizzas at that one spot. They were, I think, wood-fired out of a food truck. Really good. So, I was doing my second ever public speaking engagement, which was still nerve wracking for me. I know I do a podcast, but this is completely different than talking to a room full of industry experts and industry newbies who are hoping I can tell them something good. And I think, Bradley, it was your first public speaking since Empowered Hospitality and doing your thing over there, and you and Kaplan were nice enough to sit in on my session and actually ask me questions that were helpful for everyone else, and yourselves.

So, I had this idea bopping around in my head about a different podcast format, because I was like, “Well, I do interviews, but I don’t always get the chance to address, you know, operator topics and server topics, and bartender and chef topics, because I want the audience to learn from the expert that I’ve got on.” That’s my very long-winded way of saying, welcome, Bradley, and let’s try this new podcast format.

Bradley: Hi, Dave, thanks for having me. I’m super excited about this. I think it’s going to be a really fun format, and I like the Bar Hacks: ReFire because we’ve all had to refire something that didn’t come out right. Or you accidentally overcooked something because something else comes up in the moment, and you just totally forget that you have something cooking. So, I love the name. And also, for your second public speaking, I thought you did incredibly well. I certainly enjoyed your conversation, and it was also so relevant to what you do, and kind of what you and I have talked about in the past of like, how do you build successful restaurants from the ground up and where do you start? And we’ve even joked about how many people we’ve met who just say, “I have money, I want to open a restaurant. Let’s do this,” and don’t realize how hard it is. So, really excited to dive in on some of these questions we have today, and thank you so much for having me on the show today.

David: Absolutely. And hopefully we do many more of these.

The ReFire Format

Situation 1: Second Chances? Hire Hard, and Manage Harder

David: Situation one is interesting. So, this is written ostensibly by a bar and restaurant owner, and we can all relate to this, you know, the past couple years. This one said the past year or so he’s had trouble—actually, I don’t know if it’s a he or she, I shouldn’t even say that—they have had trouble finding and keeping staff, and when they do keep them, keeping them happy.

So, the kitchen has two or three cooks. It’s a relatively small team. When it’s busy in the restaurant there are, from what I can interpret, there are two cooks on. And when it’s slow, one cook is doing everything. Pretty standard for a small operation, I would say. (These days, you’re trying to control labor costs. My business partner Doug will say, “We don’t cut costs, we control them.” You start cutting things and it can get ugly, and it’s a whole other can of worms. I’m sure Bradley would agree with that.)

They had a new hire, seemed perfect. From what I understand, they were a good fit because everybody relies on one another. Like, “Hey, I need to take this day off. Can you take this?” It’s very…it seems informal. They can just talk to each other and get things done. But because It’s a small team, they need someone reliable, which is what they thought they had. This is a part-time worker; they had another job.

Within that first month, just a slew of, just, unfortunate events struck this new hire, and they could not, they couldn’t sustain it. And so, they gave no notice—they just quit. The operator didn’t freak out in the, in the post, was just like, “That’s really disappointing that they didn’t even, you know, text me like, ‘Oh, I can’t do this for another two weeks.’” But it does seem like real life got in the way, and this person wouldn’t probably have been able to reliably give, you know, two weeks or a week.

However, a couple weeks after that happened, the person came to get, I assume, their first paycheck. Their last, but I’m assuming their only, paycheck. And I don’t think the operator was there. They talked to the lead chef, and they apologized, and they expressed that they had stabilized everything, and just a bad time all at once, basically. And they would really love to come back. And, in fact, they would like to come back full time. So, I don’t know if that means that, the job they lost, they couldn’t get that back, or they were just like, “You know what? I actually like this place. I would like to be here full time.”

And so, the whole point of the post was, do you give second chances? Or would you give second chances to someone who just quit and then shows up for their paycheck? So, because of what Empowered does, specializing in HR and things like that for this industry, I figure we’ll go with you first on this topic and see what your initial thoughts are.

Tornado People

Bradley: Yeah, I think some things that are really interesting about this question, and thanks for passing it over, is it was a really short tenure before the person left. Right? So, this cook in question was there for, I think it sounded like a month. And then because of life… And I think it’s important in this instance to state that the incidents that led to this employee leaving were outside of the workplace, and I think that’s an important distinction here. So, there were things that happened in this employee’s personal life. It was losing a job and some other pretty unfortunate situations that led to them basically leaving with no notice, which is never a great sign. That feels really terrible. As an operator, you’re now scrambling. You thought you had your plans in place. And for such a small team, as you mentioned earlier, if it’s a team of three or four people, losing one is a massive part of that labor force.

So, I think the flag here is: Do you think it’s repeatable? Do you think that that one blip and moment was a really unfortunate circumstance? We’ve all met—I like to call them tornado people, where for good or for bad, things just spiral around them. Things are just never going well. There’s always: breaking this lease; I had to leave; I had to move out of this apartment; I just lost this job; you know, my partner just said this. And so, if it’s somebody who is just a tornado person, it’s going to kind of keep revolving back. So, I would be really worried with this employee and with this hire. Is this a pattern? Just a pattern you saw a single piece of that becomes unreliable?

And also, can you trust this person again? Especially because the kitchen is run on a singular body during, I’m assuming, lunches, Sunday, Monday, Tuesdays… You know, if this person is working a Monday dinner, how confident are you now that they’re going to show up? Labor is hard right now. You’re seeing a massive labor shortage, especially in the culinary world. There’s a huge disparity in the back of house right now, and it’s real. But you also need to make sure you’re hiring the right thing. And you mentioned earlier, I worked for Union Square Hospitality Group for Danny for a long time, and one of our big tenets, when it came to talent and came to people, was “hire hard, and manage harder.” It’s finding the right fit, and sometimes it can be really challenging. That does mean having to jump in. And as anybody who’s worked in this industry long enough knows, that sometimes mean you’re washing dishes by yourself at 1 am because your dishwasher stormed out, or your dishwasher is now covering a prep station, or, you know, one of the other crazy things that just happens in this industry.

So, my big thing to question here is, do you think this is a pattern? Is this something that’s going to happen again? Do you think you can trust this employee again? And then my biggest question also was, what was it about this employee that made them, quote-unquote, a perfect fit? Was it because they just didn’t complain and did their job well, or were they adding to the culture? So, if they were adding to the culture, if they were adding to the standards, if they were really building themselves in the space, then I, I think a second chance could be warranted, knowing all the life circumstances that went into it. But if this person was a good fit just because they came in usually on time, usually did what they were supposed to do, and left the station usually clean, I just… The risk of having another month spiral out to me is a really big concern, especially for a team that small, and for a team who has to operate on their own pretty consistently.

Two Minds

David: And then the other question is, so you, let’s say now we’re, we’ll bring you back. And then the question becomes, what kind of limitations do you put on this? Because I’m of two minds.

Okay, well, the apology does go a long way, I appreciate that. Maybe the owner wasn’t on property when the person came. And then the question in the back of my head would be, did you plan that so you don’t have to deal with the owner, and you apologize to the cook because maybe you respect other chefs, but you don’t really respect the owner, or you just didn’t wanna deal with the owner, or they just happen to not be there and you want to apologize to everybody who you affected. That’s possible.

But then you start doing the, you know, okay, well, we need to do, like, a 60-day probationary period, or a 90-day. And while I do agree with those, sometimes, I do think they do affect the culture, and they affect your employees. Like, “Right, I have this constant, like, just spotlight on me. I’m afraid to make any mistake.” Or what if legitimately something just happens? Like, okay, so their car broke down, and then they went to get the bus, and that’s running late, or it’s just stuck in traffic. They try to get there and they’re still late. Are you going to listen to them and not ding them? Or is it, “Okay, well, I don’t want to hear it again. You’re out of here.”

So, I do think probationary periods make sense, but not when you are laser-focused on them. You made a huge mistake and now we’re going to put these limitations on you. That’s not healthy, I don’t think, for either side. So, I maybe would do it like, hey, you can come back, but we’re going to go part-time first, and then I really don’t want…I’m not going to give you a lone shift; you’ll always be with another one of their cooks, and hopefully they show up for every shift.

But then it’s, you know, do the cooks get input? Does the owner get to go, “Okay, look, this is going to affect you directly. This is your team, essentially. Do you want this person back?” Because I do think that these are conversations you need to have with the team affected. And it does affect the entire team, but the direct team first. And then if you wanna ask the front-of-house manager, “What do you think of the situation? Like, do you trust the kitchen if this person’s here?”

So, I don’t think there’s, a silver bullet. I think it really is going to come down to a culture. And like you said, was this person a good fit because of culture, or were they a good-

Bradley: Fit because they were a body?

David: That’s…yeah, that’s the answer. If it’s because “I need this person here,” then if there’s only a month, I think you can survive another month looking for somebody, and hopefully they work out better. And I hate saying “hopefully,” ‘cause that’s so not strategic. Like, “Oh, I hope they work out.” But that really is part of it. Like you said, you hire hard.

But still, I mean, one of our industry peers thought they hired the right general manager for a restaurant once, and turned out they were doing drugs in the office, and stealing money. And I’m not vilifying the drug part, to be honest; that’s an issue that we need to address with a lot more compassion. But they were stealing money, and committing crimes on the property, and that was the issue. And none of that had even occurred to them because the interviews were so good, and the in-person interactions were so good when they were on site. So, it didn’t even occur to them until they didn’t show up and they’d been arrested, and the cops like, “Hey, does this person work for you? ‘Cause check all this.”

There’s always the X factor, and we have to put a lot of trust in people when we hire them. But that is also why I don’t know about you, but I don’t like the standard interview questions. Like, let’s just rubber stamp this. We ask these questions, we pencil-whip the answers, they got them, alright? Most people know how to answer an interview question to get, you know, a thumbs up from somebody.

So, I think a lot of the approach of, “Let’s hang out for a shift.” (And we have to pay them for the shift.) But like, are, they a good fit? Do I want to spend 13 hours with this person a day, or am I like, “Oh, get out of here”? Like, I can’t stand you already. Or—because we can train skills, we all know that—like you said, is it a body? And if it’s a body, I think you move on. Like, I appreciate the apology, but I don’t think it’s worth the headache if that’s the case.

“Probationary Periods are Fake”

Bradley: I agree. We, at Empowered Hospitality, advise clients that probationary periods are fake. And I think there are a few things that probationary periods always worry me because, especially depending on your jurisdiction, depending on where you are in the country, they may or may not be legal, they may or may not be enforceable. Empowered Hospitality operates mostly in New York City, but we have clients all over the country. But we advise all of our New York clients that probationary periods are fake. You know, you might say that you have a 30-day probationary period that you try to terminate somebody, but if you terminate without documentation, they can still go to unemployment court. And if you’re in a very pro-labor state like New York, in a pro-labor city like New York City—which isn’t a bad thing, I think this is a great thing; like labor needs protection—but you’re going to lose that case. Even if they’re on a 30-day probationary period, even if you put it in a handbook, even if you had them sign something… Probationary periods, I think, don’t work, in my personal, professional opinion. I think it just, it’s stage shifts, it’s having trails that should be paid, and in some places need to be paid, but, like, seeing them in action.

And, I also… One of the big flags here, too, is the first three months that somebody is in a job, not only is it when they’re learning the job, they’re learning the culture, they’re learning how to be successful, but it’s also when they’re on their best behavior. So, in this first 90-day cycle when this person is supposed to be on their best behavior, and it’s usually when you get the least amount of complaints and the most amount of, I don’t want to say production, but kind of, like, positive enforcement into the company, they’ve already come in, spiraled out, left with no notice, come back and apologize, and then tried to change the initial condition of their employment, which was part-time, into full-time. So, they’re basically coming back during the window that you’re really evaluating them as a long-term employee. They have basically said, “No, I want to change what I’m doing.”

And then I also have this, like, needle in the back that’s saying are they coming back full-time because they lost their other job that they can’t get back, and they just need something, and you’re the easy target? And all of this to say, if you get along with this person really, really well, you believe that it was an unfortunate event, they’ve shown track record either through resumes or through word of mouth that, like, it was just a blip, and you’re willing to take that risk? Absolutely. There’s so much risk in our industry. Every hire is a risk. Every time you buy a new product from a new vendor, it’s a risk. There’s so much risk in this industry outside of just financial. And so, if you’re willing to take that risk, then that’s a risk you’re willing to take. But it is a risk.

You know, it’s because also, what’s one thing we say all the time? It’s not the shining employee, and it’s not the employee that’s the worst, it’s the employee that just coasts. That’s the biggest detriment to your business. The biggest detriment to your business is the person who just does enough, but doesn’t do enough to actually, like, get anywhere, either probationary or excelling. And so, if you hire this person in and then they end up being one of these tornado people, but they don’t do anything like quit again on the spot, it’s gonna be really challenging to exit this person successfully without risks of the business. And right now, you’re at a moment that there is no risk to not hire them.

The Verdict

David: I probably wouldn’t hire back. And, not to sound like I’m not compassionate, because my gut reaction, personally, with no business involved, is, yeah, they apologized. It was a month. Like, they had a string of things that did not directly involve the company go wrong. Like, let’s try it again.

But on the business side, the operator side, I’m like, what probably wasn’t even a full month of work, you already survived without this person after this all happens. So, I would just keep looking. And as far as probationary periods, you’ll never see it listed in one of our manuals. We do onboarding manuals. We do training manuals. We do checklists. We do a ton of documents for our clients when they ask us to. We have never talked about a probationary period. It’s just like, nope: this is what we expect from you, we’re gonna document it if you don’t do it, and corrective action. It’s gonna start with, “Hey, just don’t do that again,” and then it escalates. So, we don’t do probationary: it’s just, “Please don’t break the standards. If you do, we can talk about it, ‘cause maybe the standard should change.” I mean that does happen, but it’s mostly just don’t do that. And then we’re gonna keep having to escalate this if you keep doing this.

Bradley: And you mentioned something that I think is really important: the day the employee starts, they’re your employee. And by all intents and purposes they’re the same. They need to be treated the same as somebody who’s been there for five years, right?

So, yes, they’re taking more coaching, and there’s more training. They’re taking more time as you’re adapting them to your culture. But that doesn’t mean that there’s any different standard that you can hold them to because they’re new in terms of, like, paperwork, termination process if you have a disciplinary process laid out within your handbook or laid out within any sort of documents or policies, especially if they sign off on them. So, making sure that every hire is a commitment, and you should be willing to put the time and investment into them, but you also have to hold all of them accountable in the same way.

Because I also worry—and kind of diatribing on this a little bit—I worry what message is to sending to the rest of your team, right? If he would have, I’m assuming this person’s a he, but if this person would have quit and said, “I can’t give you notice because of all of these things. I can try and pick up a shift here, but right now this isn’t working,” that’s one thing. But that’s not what happened in this case, you know? This person had a bunch of unfortunate situations happen to them outside of work. But then instead of trying to work with their employer to say, “Hey, I’m working through these things, can I take two weeks to figure this out? I know I just started.” But it was, “I’m gone.” And then a month later like, “Hey, I’m back. Can I get a job?” And so, if it was one of my clients, I would be hard pressed to advise “Yes.”

David: And it was a “he.” When they wrote it, it was a “he.”

“You have to protect your entire team”

Bradley: If it was a tough labor market, I could see there were definitely extenuating circumstances that could sway one way or the other. But just at face value, this feels like a really challenging rehire. Not because they don’t care about the person. I don’t think anybody gets into this industry because they don’t care about people. And I’m super empathetic, but I’ve been in restaurants for 20 years. It’s very transient. We’ve seen people come and go.

And just the risk that I would have taken 20 years ago… And on people, I take less now. I think maybe I’ve been burned too many times, or seeing too many patterns come through, but… At the end of the day, you feel bad for this one person, but you have to protect your entire team. And so when you’re the employer, sometimes the good of the whole team makes you make some tough choices, or makes you make choices that maybe you personally don’t agree with or personally make you feel, “Hey, I feel like I might be a bad person, but I can’t do this because I have 16 other people that work for me that show up every day that have been there consistently, and they need to have a team that shows up as well.”

I’m going to go back to the biggest flag here for me is that it was only one month of, like, good behavior. If this had been somebody who had been there for, like, three months, six months, a year and then had to quit, no notice, all these things happened in their personal life, and then came back and was like, “Look, I am so sorry life spiraled.” You also have a little bit more judgment on that person’s character. One month in, you don’t know who that person is.

David: Excellent point. Yeah. There’s no way that they—well, not no way—but it’s very low odds they knew exactly who this person is after, I think they said they worked like two or three shifts a week, part-time. So, you just don’t know.

So, yeah, I think both of us are agreeing that you just move on from this, not because you’re cold-hearted, but because it is the best decision for the company, and the team. Like I said, if you really have that culture where you have a meeting, like, “Hey, this is what happened, you all have a vote.” I mean, I’ve seen that happen; it does happen. If that’s the kind of culture, maybe it’s a different answer. But I don’t think the market is so bad that you can’t do without, you know, finding another, waiting another month, two months to hire another person who will fit the same role part-time with the possibility of going full-time. I don’t think it’s that dire.

Pass them On?

Bradley: If you, if a few heartstrings pulled out for this man and you, I still don’t know if I bring him in for the culture. But nobody in restaurants also doesn’t know anybody. It’s, “Hey, I don’t think it’s a good look to bring you back here. It doesn’t set a good precedent for the team. You know, I also am not sure this is, like, going to be a great long-term fit. But if you’d like, I’m happy to talk to somebody else, and see other places in the industry that you might be able to go.”

But that’d be a risk because then you’re putting your reputation on this person’s shoulders.

David: True.

Bradley: But if you trust that they’re good… I still don’t know that bringing them back on sets the right precedent for the company. You could help them in other ways instead of just bringing them back into your space, into your business.

David: That’s a good point. Yeah. You could definitely pass them on. But like you said, now you get the phone call from the person you passed them on, like, “What did you do?!”

Bradley: After a month, they’re like, “They just quit.” Exactly, yeah. I’d say history always repeats itself. And that is long-term and short-term. So, that would be my biggest concern here, outside a few others.

Listen to Bar Hacks: Refire, episode one on Spotify, Apple Podcasts, or wherever you listen to podcasts.

Note: Transcript provided by Eddy by Headliner, edited by author for clarity.

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November 15, 2024by David Klemt David Klemt No Comments

The 7 Principles of Hospitality

The 7 Principles of Hospitality

by Doug Radkey

Let’s start with a simple but important question: When you hear the term “hospitality industry,” what first comes to mind?

For many, the first thing that comes to mind is….hotels. And while hotels are a significant part of hospitality, they’re definitely not the complete picture. In fact, the true essence of hospitality often transcends what we experience in a standard hotel environment.

Bars, restaurants, resorts, and entertainment venues are all spaces where the principles of hospitality should be experienced equally. Hospitality is about how we treat people—our guests, visitors, our vendors, and even our team members—with generosity, warmth, and genuine care.

Yet, in recent years, a shift has occurred. Many people I speak with in the industry feel that we’ve lost touch with the foundational principles of hospitality in a variety of settings. Whether it’s the focus on tech integration, rush to hire due to labor shortages, lack of proper onboarding and training, or clarity in what we do —and why we do it—something has gotten lost along the way.

As we move forward, it’s time for the industry to refocus on what hospitality truly means, and realign with the core principles that make this industry remarkable.

No matter the style of concept you operate or plan to operate, the seven principles of hospitality are the foundation of exceptional service and memorable experiences. These principles aren’t just for fine dining or five-star resorts, and they aren’t just fancy buzzwords. They’re actionable insights that can elevate any hospitality business.

1. Self-Awareness

Hospitality starts with you. The first step to great hospitality is understanding how our own behavior impacts those around us—our guests and our teams.

Practicing self-awareness isn’t always easy, particularly in high-pressure situations. So, ask yourself: How aware are you of the emotions you’re instilling in others during conversations, especially under stress?

Self-awareness is more than a personality trait; it’s a skill that helps create a warm, caring environment for guests. It’s about managing how we come across to others actively, and ensuring our actions align with the culture we want to build in our business.

To create a genuine sense of hospitality, we must start with a clear sense of self.

2. Guest Awareness

Read your guest’s energy, not just their appearance. The ability to read guests and anticipate their needs is crucial, but it goes beyond surface-level assumptions.

Hospitality isn’t about stereotyping based on appearance, accents, or perceived financial status. Instead, it’s about sensing the energy and mood they bring into your space.

When we understand the energy guests bring, we can adapt our approach, tailor our communication, and build genuine connections. This is hospitality in its most fundamental form: creating a personalized experience by being attentive and observant.

3. Connection

Hospitality is about meaningful connections. When you’re both self-aware and guest-aware, you can begin to tailor your interactions to each specific guest (and your staff, too).

Authentic, unique, and genuine hospitality is what leaves a lasting impression. Building a connection with guests isn’t just about providing a service. The key is to cultivate an experience that feels personal.

In his work, author Daniel Pink talks about intrinsic and extrinsic motivation, noting that connection is one of our core intrinsic motivators. We’re drawn to hospitality because of our natural desire to connect with others. It’s this connection that creates the most memorable guest experiences and fosters loyalty.

A business grounded in genuine connections will always stand out.

4. Authenticity

Be yourself. Guests can tell when you’re not—so stop the act.

Authenticity is essential in hospitality. Yet, so many teams I work with feel they need to become someone else on the floor, changing their voice or putting on a façade. Often, this stems from misguided career advice imparted early on that tells us we aren’t interesting enough as we are.

But here’s the truth: The most engaging and captivating version of yourself is the real one.

People connect with genuine personalities, not manufactured ones. Drop the façade, and bring your authentic self to every interaction. Guests sense authenticity, and it’s what will draw them back again and again.

So, next time you interact with a guest, do a reel for social media, or interview a potential team member, bring your authentic self. That’s the version of you with which people connect.

5. Anticipation & Attention to Detail

Tell guests what you’re going to do, do it, then tell them you’ve done it.

One of the secrets to providing an excellent guest experience is being prompt, responsive, and thorough in communication. A big part of managing guest expectations is being clear about what to expect. Tell guests what you’re going to do, keep them informed while you’re doing it, and follow up afterward.

Increasingly, guests want their visits to feel personalized. Whether you add small, thoughtful touches to a meal, or offering a personalized greeting in a hotel, attention to detail shows guests that they’re valued.

Anticipation of guest needs is what sets hospitality apart from other service-based industries.

6. Alignment

Help your team see how their role fits into the bigger picture. Alignment means connecting each team member’s work with their broader life goals and values. Many people in our industry might not see hospitality as their forever career, but that doesn’t mean their time with us can’t be meaningful.

Find out what matters to each team member, whether it’s professional growth, financial stability, or simply enjoying their work. Then, align their role with these values.

A team that feels connected to their work is more motivated, more focused, and more likely to deliver a higher level of service.

Alignment isn’t just about job roles, it’s about helping people find purpose and satisfaction in what they do. It’s crucial that we build team experiences just like we create guest experiences.

7. Presence

Be engaged in the moment fully with your guests. Presence means engaging completely with what you’re doing.

When you’re talking to a guest, be invested in that moment completely. Avoid distractions, scripted conversations, or rehearsed interactions. Genuine presence is about being open, honest, and interested in their experience.

For leaders, fostering a culture of presence is crucial. Every interaction you have with your team either reinforces or diminishes this value. Be mindful of how your behavior impacts others, and encourage your team to approach each guest with this mindset.

Celebrate moments of genuine connection, and provide feedback when things don’t go as planned. Presence isn’t just a skill; presence is a cultural value that transforms service.

Real-Life Example: The Solmar Resort

To illustrate these principles, I’d like to share a personal experience from the Solmar Resort in Cabo San Lucas, Mexico.

After a hurricane passed near the Baja Peninsula, David and I arrived for a business retreat, only to find the resort quieter than usual. Despite the calm, the staff maintained a vibrant and uplifting culture. They were fully engaged—no one was on their phones, no one was leaning or looking board, no one was gossiping, and the team members greeted each other with genuine joy and fist pumps.

Even with more staff than guests on the property, their sense of purpose and commitment to hospitality was evident. From dancing and singing while performing side duties, to the warm, friendly interactions with us as guests, the experience was unforgettable. The Solmar team embodied the “one-house” approach: everyone worked together seamlessly to deliver an exceptional experience.

During our visit, we experienced true hospitality in action, where every interaction was meaningful an, most importantly, intentional.

Reclaiming the Foundation of Hospitality

The seven principles of hospitality—self-awareness, guest awareness, connection, authenticity, anticipation, alignment, and presence—are not just theoretical ideas. These are actionable values that can transform guest experiences, and set your brand apart in a crowded market.

At its heart, hospitality is about people. It’s about creating an environment where our team and our guests feel welcomed, seen, and valued. If we want to elevate our industry, we need to return to these foundational principles, and train our teams to embody them in every interaction.

So, let’s commit to reclaiming the true essence of hospitality. Whether you’re running a bar, restaurant, or hotel, these principles provide a roadmap to building a culture of excellence that guests won’t soon forget. By focusing on experience and connection, we can redefine hospitality for a modern audience, and make it as impactful as it’s ever been.

Remember, hospitality isn’t just about serving food and beverage, or providing a bed. Hospitality is about creating memories that guests carry with them long after they’ve experienced your brand.

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November 8, 2024by David Klemt David Klemt No Comments

Understanding TAM, SAM, and SOM

Unlocking Growth Potential: Understanding TAM, SAM, and SOM

by Doug Radkey

After working through this with a client the other day, we thought it would be a good opportunity to explain the acronyms of TAM, SAM, and SOM.

These concepts can help your business start, stabilize, or scale.

Let’s be real: in the hospitality industry, understanding your market and its potential is paramount for sustainable growth and profitability. This is where the concepts of TAM (Total Addressable Market), SAM (Serviceable Addressable Market), and SOM (Serviceable Obtainable Market) come into play.

For bars, restaurants, and hotels, these metrics aren’t just marketing or financial jargon. Each provides critical insights that inform feasibility studies, shape marketing strategies, and guide business decisions.

Below, we’ll break down each of these concepts, illustrate how to calculate them, and explain their role in building effective strategies for your hospitality business.

The Definitions

TAM (Total Addressable Market)

TAM represents the overall revenue opportunity available if your business held 100 percent of the market share. It is the entire potential market size without any constraints like geography, budget, sociographics, or operational limits.

Example: For a new bar, the TAM would represent the total annual spend of all consumers in your market who drink out, regardless of their preferences, location within a region, or budget.

SAM (Serviceable Addressable Market)

SAM is the portion of TAM that your business can reach realistically, given practical limitations like geographic location, regulatory constraints, more targeted sociographics, and operational scope. Going further, SAM also considers factors that make a portion of the TAM unfeasible for your business to serve.

Example: Using the same bar concept, SAM would represent all the people within a certain radius who are willing to visit a bar with a similar concept, who can afford your menu, and who are within your reach given your physical location.

SOM (Serviceable Obtainable Market)

SOM is the segment of the SAM that your business can capture. This metric accounts for your competitors, market share estimates, and your unique ability to attract your ideal guests within your SAM.

Example: For the bar, SOM would be the percentage of patrons within your SAM that you expect, realistically, to convert into regular guests, taking into account competition, unique value proposition, and brand positioning.

Why These Metrics Matter

Each of these metrics provides a progressively more realistic picture of your business’ revenue potential.

Your business plan cannot be “targeting males and females between 25 to 45 years old.” You have to go much deeper than that to be successful.

TAM shows you the broadest possible opportunity, but SAM narrows it down based on serviceable factors. SOM gives you a realistic goal to aim for based on your most targeted factors.

Their Role in Feasibility Studies and Marketing Plans

In hospitality, feasibility studies are essential for understanding whether a business idea is viable.

When you’re assessing the potential of a new bar, restaurant, or hotel, the TAM, SAM, and SOM calculations give you quantitative data that can help you avoid common mistakes such as overestimating your market potential, or failing to identify target demographics accurately.

Feasibility Studies

TAM Analysis: Helps validate whether there’s a broad demand for your concept.
SAM Analysis: Identifies a focused portion of the market that fits within your operational range.
SOM Analysis: Helps set realistic revenue goals by factoring in competition and market positioning.

When preparing a feasibility study, using TAM, SAM, and SOM ensures that your projections are grounded in reality, giving potential investors or stakeholders confidence in your plan.

Marketing Plans

Once you’ve established a feasible market, TAM, SAM, and SOM inform your marketing strategies.

TAM helps you understand the entire universe of potential guests, useful for broader brand awareness campaigns.
SAM directs you to specific geographic or demographic segments for targeted campaigns.
SOM guides the creation of highly focused, competitive strategies to capture and retain market share in a specific segment.

By utilizing TAM, SAM, and SOM, your marketing plan becomes tailored, efficient, and likely to generate a higher return on investment.

How to Calculate TAM, SAM, and SOM for Your Hospitality Business

Step 1: Define Your Target Market

Before calculating TAM, SAM, and SOM, it’s essential to understand and define your target market. This includes analyzing demographics (age, income, education) and psychographics or sociographics (lifestyle, preferences, values).

For a local bar, restaurant, or hotel, understanding these details about your audience is crucial because your business’ reach will likely be local or regional.

If, for example, you’re opening an elevated cocktail bar, you might define your target market as:

Travelers aged 30 to 50 with disposable income between $70,000 and $90,000 per year.
Downtown business professionals who are interested in after-office food and beverages.
Individuals and tourists seeking upscale F&B and unique guest experiences.

Did you know? In Canada and the US specifically, there are over 65 sociographic or “tapestry” profiles that make up the fabric of our neighborhoods.

Step 2: Calculate TAM

To calculate TAM, consider the total market demand for your type of service.

Formula: TAM = (Total number of potential customers) × (Average annual spend per customer)
Example for a Bar: If the estimated number of people in your city who visit bars is 200,000, and the average spend per person is $500 annually ($41.67 per month), the TAM would be 200,000 × $500 = $100 million.

Step 3: Calculate SAM

To calculate SAM, refine TAM by narrowing down to the guests you could reach realistically based on your location, budget, and other factors. Use your sociographic/tapestry profiles to help.

Formula: SAM = (Total number of reachable guests within your service area) × (Average spend)
Example for a Bar: Out of 200,000 potential guests, suppose only 50,000 are within a 10-mile radius who are between 25 and 45 years old, who drink, and who make between $50,000 and $70,000 per year. SAM would be 50,000 × $500 = $25 million.

Step 4: Calculate SOM

Finally, to determine SOM, evaluate how much of the SAM you believe you can capture realistically. This often depends on your competitive positioning, your marketing effectiveness, and operational capacity.

Formula: SOM = (Total number of targeted guests you can convert realistically) × (Average spend)
Example for a Bar: If you believe you can capture 10 percent of your SAM, SOM would be 5,000 guests × $500 = $2.5 million.
Now, compare that to your daily, weekly, and monthly traffic projections and your daily, weekly, and monthly revenue projections. How close are you?

Sample Calculations for a Boutique Hotel Business

To illustrate these calculations, let’s imagine a boutique hotel in a medium-sized city:

TAM Calculation:
- Target market: All tourists visiting the city annually.
- Estimated annual visitors: One million.
- Average annual spend per tourist on accommodations: $1,000.
- TAM = 1 million × $1,000 = $1 billion.
SAM Calculation:
- Focused market: Visitors who prefer boutique hotels versus chain flags who are between 22 and 42 years old.
- Estimated visitors who prefer boutique hotels: 20 percent of TAM (200,000).
- SAM = 200,000 × $1,000 = $200 million.
SOM Calculation:
- Realistically, the hotel expects to capture five percent of SAM based on its operations, the number of rooms, its daily rates, and expected occupancy rates.
- SOM = 10,000 guests × $1,000 = $10 million.

Why Defining Your Target Market is Crucial

All that said, calculating TAM, SAM, and SOM is only effective if you have a clearly defined target market. Hospitality businesses must understand their audience’s demographic and sociographic details, which is why initial market research is so essential.

For instance, if a new restaurant targets health-conscious millennials, knowing their spending patterns, dining preferences, and local competition will make the calculations more accurate.

With detailed sociodemographic insights, you can more precisely estimate TAM, SAM, and SOM, creating a feasibility study that reflects realistic market conditions.

The Benefits of Using TAM, SAM, and SOM in Your Business Planning

By incorporating TAM, SAM, and SOM into your feasibility studies and marketing plans, you can make data-driven decisions that increase your business’ chances of success.

Here’s how each metric adds value for you and your business:

Informed Decision-Making: These metrics offer clarity for market potential, helping you avoid costly mistakes.
Financial Confidence: TAM, SAM, and SOM provide stakeholders with measurable data, increasing confidence among investors or lenders.
Efficient Marketing: Focusing on SOM in marketing efforts allows you to deploy resources effectively, targeting guests you are most likely to convert.
Adaptability: These metrics aren’t static; you can adjust TAM, SAM, and SOM as market dynamics change, ensuring your business stays relevant.

Why Now is the Time to Embrace TAM, SAM, and SOM

In a competitive hospitality landscape, using TAM, SAM, and SOM can provide a strategic advantage. By understanding your true market potential, you can design a feasibility study and marketing plan that align with realistic growth goals.

While TAM shows you the big picture, SAM and SOM bring clarity to your specific opportunities, helping you prioritize resources and strategies that will yield the best return.

As you move forward with planning, remember: calculating TAM, SAM, and SOM is not a one-time task. Updating these metrics regularly as your business and the market evolve can provide insights that will keep your brand relevant and profitable.

My final thoughts: Before you dive into launching a new bar, restaurant, or hotel, take the time to do a deep dive into TAM, SAM, and SOM. It’s not just about understanding your market; it’s about maximizing your opportunity to stabilize and then scale within it.

By leveraging TAM, SAM, and SOM, you’ll be equipped to create a hospitality concept that doesn’t just survive but sets a new standard for success.

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October 25, 2024by David Klemt David Klemt No Comments

Shifting Focus on KPIs

Shifting Focus on KPIs

by Doug Radkey

Key Performance Indicators (KPIs) have long been the cornerstone of measuring success in business, particularly in the hospitality industry.

Restaurants, bars, and hotels rely on these metrics to track occupancy rates, average ticket prices, cost of goods, and guest satisfaction scores, among many others. However, as the industry evolves, so too must our understanding of what truly drives sustainable success.

The traditional KPIs measure outputs—numerical results that often focus on profitability, efficiency, and growth. But as hospitality businesses become more guest-centric and employee-driven, we need to rethink what KPIs really mean.

Instead of focusing solely on these cold, hard numbers, we should be emphasizing what I call the new KPI: Keeping People Informed, Involved, Interested, and Inspired.

This shift acknowledges that success in hospitality is not just about what’s measurable on a spreadsheet but also about engaging employees, nurturing guest and vendor relationships, and fostering a culture of collaboration and growth.

This article, which I have been planning to write for quite some time now, will explore how redefining KPIs to prioritize keeping people informed, involved, interested, and inspired can transform the hospitality industry, leading to more engaged teams, happier guests, and better business outcomes.

KPI: Keeping People Informed

In any form of hospitality business, from boutique hotels to bars and restaurants, the foundation of success lies in clarity, transparency, and communication.

Keeping people informed, whether they’re employees, guests, or stakeholders, is key to fostering trust, loyalty, and operational clarity.

Informing Employees

Despite the growth in technology, employees are still the lifeblood of the hospitality industry. Informed employees are empowered employees.

When they understand the bigger picture—what the business is trying to achieve, and how their role contributes to that goal—they feel a greater sense of purpose and motivation.

In the past, KPIs often stayed in the boardroom. If they left the boardroom, they remained among the leadership team on the floor. So, either way they were detached from true day-to-day operations.

A shift toward the new KPI requires involving employees in the business’ key metrics, and sharing relevant information transparently.

For example, when a hotel shares its Total Guest Revenue Management goal and explains the efforts needed to improve these numbers, every department can align their strategies to support this objective. Housekeeping understands the need for timely room turnovers. The marketing team knows where to focus their efforts. Guest services is equipped to handle the flow of on-property guests more efficiently.

Practical Steps:

Hold regular meetings to discuss current business performance and future goals.
Share performance dashboards that are accessible and understandable to all staff members.
Break down KPIs into department-specific insights, so each team knows how their performance impacts the overall business.

Informing Guests

On the guest side, keeping them equally informed is crucial in today’s digital age, where transparency and real-time information drive decision-making.

Whether that means updating guests on room availability, menu changes, or special promotions, being proactive with information helps manage expectations, and creates a seamless guest experience.

Hotels and restaurants can use digital platforms to keep guests informed, providing them with personalized experiences. For instance, a hotel app that informs guests about spa availability or the restaurant’s current waitlist times ensures that each guest feels valued, and in control of their experience.

Practical Steps:

Implement digital platforms, like apps or SMS services, that keep guests informed of their bookings, promotions, and real-time service updates.
Train staff to be communicative and transparent about wait times, service delays, or special offerings to manage guest expectations.

KPI: Keeping People Involved

Engaging with employees and involving them in the decision-making process is crucial for motivation and a sense of ownership.

KPIs should not be top-down metrics that only the leadership team values. Instead, they should provide a framework that allows employees to contribute actively, and understand how their efforts influence success.

Involving Employees

In the traditional sense, KPIs are viewed as targets employees must meet, and are provided without much context.

Keeping people involved means allowing employees to help define these targets, along with the pathways to achieve them. Involving employees and allowing them to set their own performance indicators gives them ownership of their work, and makes them feel accountable for outcomes.

For example, a restaurant can engage its service staff by involving them in discussions about upselling, suggesting specific strategies that they feel comfortable executing. They become part of the plan to improve the average ticket price or increase sales of high-margin items, rather than feeling like they’re being micromanaged.

This approach cultivates a culture of continuous improvement, collaboration, and engagement. When employees feel that their input is valued and implemented, they are more likely to be motivated to contribute actively, and innovate within their roles.

Practical Steps:

Host brainstorming sessions with employees to identify goals, challenges, and solutions. This fosters a sense of collaboration and inclusion.
Implement feedback loops where staff can share what’s working and what’s not on a consistent basis. Adjust KPIs based on this real-time insight.

Involving Guests

In the hospitality industry, guest involvement often determines the quality of their experience. Personalized service, where guests are involved in customizing their stay or dining experience, results in higher satisfaction levels.

From hotels offering customizable room amenities to restaurants allowing diners to build their own experiences, guest involvement directly correlates to guest loyalty and satisfaction.

Practical Steps:

Offer personalized experiences, such as allowing hotel guests to choose room preferences, or dining guests to customize their meals and dining experience.
Utilize surveys, post-stay feedback apps, or other mechanisms to involve guests in shaping future services and experiences.

KPI: Keeping People Interested

Maintaining interest and enthusiasm among employees and guests alike is vital for long-term success.

The new KPI focuses on creating a sense of purpose, engagement, and excitement about the work being done.

Keeping Employees Interested

Employees who are interested in their work are far more productive. They’re also committed to delivering high-quality service.

Traditional KPIs can sometimes feel disconnected from day-to-day tasks. Reframing KPIs to focus on team engagement and purpose helps keep employees interested in their roles. This is where challenging yet meaningful KPIs come into play.

For instance, a restaurant’s kitchen staff can be challenged to reduce food waste by five percent. Instead of just announcing this target, the leadership team should encourage the kitchen to come up with the strategies to achieve it. Whether that means repurposing on-hand ingredients for an LTO or improving portion control, the involvement and challenge keep staff interested and motivated.

Reviewing progress regularly, celebrating milestones, and recognizing achievements enhances employees’ engagement and satisfaction, keeping them interested in their contributions to the team’s success.

Practical Steps:

Implement monthly or quarterly team challenges that are tied to larger business objectives, with recognition or rewards for achieving these targets.
Organize regular check-ins to discuss career development, skill development, and other methods of keeping employees passionate about their work.

Keeping Guests Interested

The modern guest is no longer interested in just receiving a meal or room; they’re seeking a memorable experience. Hotels, bars, and restaurants must innovate constantly to keep guests coming back.

Whether through offering seasonal menus or LTOs, hosting unique on-premise events, or incorporating local culture into the experience, keeping guests interested requires ongoing creativity.

Practical Steps:

Rotate seasonal offerings or limited-time events to keep the brand fresh and exciting.
Personalize guest experiences based on previous stays, orders, or preferences.

KPI: Keeping People Inspired

Finally, people—employees and guests—need to be inspired. Inspiration fuels action, creativity, and, above all, loyalty.

When employees are inspired, they go above and beyond in their roles. When guests are inspired, they become loyal advocates of your brand.

Inspiring Employees

Traditional KPIs rarely inspire employees; they just feel like boxes to be checked.

But the new KPI focuses on creating ambitious yet attainable targets that challenge employees to push their boundaries. This includes setting stretch goals that inspire employees to think creatively, and innovate.

For example, a bartender could be challenged to create a new cocktail using sustainable ingredients. As another example, a hotel service staff member could be encouraged to improve guest check-in times while maintaining high guest satisfaction scores.

Leaders must also inspire their teams by sharing success stories through pre-shift meetings, fostering a positive workplace culture, and providing opportunities for growth and development. When employees are inspired by their leaders, they are more likely to take initiative, and drive the business forward.

Practical Steps:

Set SMART, ambitious goals that push employees out of their comfort zones but are still attainable.
Recognize and celebrate those who exceed expectations, and inspire others to do the same.

Inspiring Guests

Inspiration isn’t just internal; guests also need to feel inspired by the spaces and services they encounter.

In guests, a feeling of inspiration can be achieved through extraordinary design, unique offerings, or service that goes above and beyond. An inspired guest becomes a loyal one who shares their experiences, and recommends the business to others.

Practical Steps:

Design spaces and experiences that delight guests, and exceed their expectations.
Use storytelling in your marketing to inspire guests before they even walk through your doors. Then through a curated guest journey map, encourage them to share their experience with their network.

The New Vision: Why Now is the Time for Clarity

As we look ahead in this industry, there has never been a better time to build clarity in your hospitality business.

The post-pandemic landscape has shifted guest expectations, employee needs, and operational requirements. Businesses that succeed in this new environment will be those that understand the importance of keeping people informed, involved, interested, and inspired.

Clarity in your vision and execution will set your business apart in a competitive and dynamic market. By focusing on this new form of KPI, you can create a hospitality brand that not only survives but exceeds expectations in the years to come.

So, as you plan for the year ahead, ask yourself how you can keep your team and guests more informed, involved, interested, and inspired.

The answer will unlock your path to long-term success.

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October 11, 2024by David Klemt David Klemt No Comments

Hotel Total + Guest Revenue Management

Hotel Total + Guest Revenue Management: A Comprehensive Approach

by Doug Radkey

In the evolving landscape of hotel revenue management, the focus on traditional metrics like RevPAR (Revenue Per Available Room) and ADR (Average Daily Rate) is shifting.

While these metrics have been the gold standard for assessing a hotel’s performance, they no longer provide a complete picture.

Why, you ask? Because guest expectations and spending patterns have evolved. Hotels are not just places to stay; they are multi-faceted destinations offering a variety of services, such as dining, spa treatments, recreational activities, events, and more.

RevPAR and ADR measure performance based solely on room occupancy and rates, which overlooks the revenue generated from these additional services. They do not account for on-premise spending by guests on activities, food and beverage, wellness services, or other ancillary revenue streams that can impact a hotel’s overall profitability significantly.

Further, these traditional metrics fail to capture the qualitative aspects of the guest experience, such as personalized services, guest satisfaction, and long-term loyalty, all of which play a crucial role in a hotel’s success.

In essence, relying exclusively on RevPAR and ADR can lead to a narrow, and potentially misleading, view of a hotel’s financial health, missing out on opportunities to build a true legacy within this industry.

Where do we go from here, then? Enter Total Revenue Management (TRM) and Revenue Per Available Guest (RevPAG). These “new” metrics offer a more holistic view of a hotel’s financial health, moving beyond just room revenue to encompass the total guest experience, and the entire property’s revenue potential.

Understanding Total Revenue Management (TRM)

Total Revenue Management is a modernized approach that measures and maximizes revenue across all revenue streams within a hotel.

This includes rooms, food and beverage, spa services, recreational activities, and any other revenue-generating departments. TRM is about synchronizing and optimizing these various revenue streams to elevate the hotel’s total profit margin.

Let’s put this into perspective. Picture yourself as a hotel operator in Las Vegas. Maybe there is an instance where you have a group of high-rolling guests staying at your casino hotel/resort. Instead of charging them for their rooms, you decide to comp their stay entirely.

To some, giving away a free room in a city where occupancy rates are crucial might seem like a risky move. But you know that the cost of the room will be a drop in the bucket compared to the potential revenue they could generate on the casino floor, and on-site bar and restaurant. These guests end up spending hours at the tables and slot machines, contributing far more to the bottom line than a single night’s room rate ever could.

But it’s not just about the high rollers. What about off-peak times, where you have to get creative to keep the revenue flowing?

Perhaps you offer discounted spa treatments to your guests on weekdays when the hotel isn’t as busy. To your surprise, these guests who wouldn’t typically splurge on spa services took advantage of the discounted rates. This not only increases your spa revenue during slow periods but also enhances the overall guest experience, turning casual visitors into loyal guests.

These experiences are just two quick samples showcasing how maximizing revenue isn’t about charging for every service; it’s about understanding the broader picture, and making strategic decisions that drive total revenue for your property, every single day.

The framework of TRM is all about understanding the affiliation of each revenue stream available within your property. By taking a comprehensive view of the property’s revenue potential, you can create packages and services that encourage spending across all departments, not just the rooms.

The 5 Advantages of Total Revenue Management

It’s safe to say that implementing TRM can lead to a more robust and modern operation that benefits your hotel in several key areas:

Revenue Growth: TRM goes beyond just room revenue. By focusing on every revenue stream—be it dining, spa services, or recreational activities—TRM maximizes your hotel’s overall revenue potential. This comprehensive approach ensures that every aspect of the guest experience contributes to the bottom line, leading to a more diversified and stable revenue base.
Enhanced Asset Utilization: TRM encourages the optimal use of all hotel facilities, from restaurants to event spaces and wellness centers. By identifying underutilized assets and creating strategies to boost their usage, such as offering special packages or promotions, your hotel can increase its profitability significantly. This not only drives revenue but also elevates the guest experience by offering more value-added services.
Streamlined Operational Costs: A key benefit of TRM is the ability to streamline operations across various departments. Leveraging data and cross-departmental insights improves your hotel’s resource allocation, waste reduction, and implementation of more cost-effective practices. This leads to lower operational costs and increased profit margins, allowing your hotel to reinvest in areas that perhaps enhance the guest experience.
Unified Team Effort: TRM fosters a cohesive workforce by aligning all departments with a common goal of maximizing total revenue. When the front desk, housekeeping, food and beverage, and other teams are all working towards the same objectives, it leads to several improvements. These include enhanced productivity, improved guest satisfaction, and a seamless experience for guests. This unified approach creates a culture where everyone understands how their role impacts your hotel’s success.
Boosted Efficiency and Productivity: Implementing TRM encourages different departments to collaborate more effectively, streamlining processes and reducing redundancies. By focusing on total revenue rather than isolated departmental metrics, your hotel can create a more dynamic and responsive operation. This increased efficiency not only enhances the guest experience, it also drives higher employee satisfaction by creating a more organized and purpose-driven work environment.

Implementing Total Revenue Management

The first step to implementing TRM is to invest in integrated Property Management Systems (PMS) such as Mews, and Revenue Management Systems (RMS) such as Atomize. These systems are essential for tracking, reporting, and forecasting revenue across the entire property.

Further, such platforms provide real-time data that helps inform strategic decisions.

One of the biggest challenges in implementing TRM, however, is bridging the gap between technology, staff, and different departments.

Hotels must ensure that data flows across all departments seamlessly, allowing for cohesive decision making. This requires both employees and the property’s infrastructure to adapt to new behaviors and processes. Staff training and a culture that embraces data-driven decision making are crucial for the successful implementation of TRM.

The Transition from RevPAR to Revenue Per Available Guest (RevPAG)

While TRM offers a broad view of the hotel’s revenue potential, RevPAG provides a more guest-centric metric for assessing performance.

RevPAR (Revenue Per Available Room): You’re likely familiar with this one. This is the traditional metric that provides a quick snapshot of a hotel’s performance by considering both occupancy (OCC) and the average daily rate (ADR). While useful, it focuses solely on room revenue, ignoring other revenue streams, and the overall guest experience.
RevPAG (Revenue Per Available Guest): Unlike RevPAR, RevPAG looks at total revenue generated by each guest during their stay, regardless of how many rooms are sold, or how many guests occupy a room. It captures all spending, including dining, spa services, recreational activities, and more. This metric offers a more advanced understanding of guest behavior, and their total contribution to the hotel’s revenue.

The 4 Advantages of Revenue Per Available Guest

Focusing on RevPAG can drive on-premise spending, and enhance the guest experience. Some advantages for your hotel may include the benefits below.

Engaging Loyalty Programs: Loyalty programs are a powerful tool for encouraging repeat visits and on-property spending. Offering rewards, exclusive perks, and personalized incentives helps your operation foster long-term relationships with guests. Such programs prompt guests to return, and continue spending within the hotel. A well-designed loyalty program not only increases revenue per guest but also strengthens brand loyalty, turning one-time visitors into lifelong advocates.
Personalized On-Site Experiences: Understanding guest preferences will further allow your hotel to craft tailored packages and experiences that encourage guests to spend more on-property. Whether it’s guided tours, hands-on cooking or mixology classes, or themed live entertainment, these curated activities enhance the guest experience, and drive additional revenue. Personalized offerings create memorable moments that guests are willing to pay a premium for, increasing overall spend per guest.
Wellness and Lifestyle Services: Investing in wellness services such as spas, fitness centers, and recreational facilities opens up new revenue streams, and enhances the overall guest experience. By offering wellness packages, relaxation treatments, or fitness classes, your hotel can cater to the growing demand for health and wellness experiences. These services encourage guests to spend more on-premise, turning your hotel into a desired destination that meets various guest needs.
Elevated Dining and Beverage Offerings: Exceptional culinary and mixology experiences can enhance on-premise spending significantly. By offering unique dining options like chef’s table events, wine tastings, or mixology masterclasses, your hotel can attract food and beverage enthusiasts, and encourage them to spend more during their stay. These high-quality experiences boost revenue, and elevate your hotel’s reputation as a destination for food and drink.

Implementing Revenue Per Available Guest

To maximize RevPAG, your hotel needs to focus on creating personalized guest experiences, and integrating technology seamlessly across all touchpoints. This involves taking the steps below.

Personalized Guest Experiences: Tailoring services and offerings to your targeted, individual guest preferences to not only enhance their stay but also encourage additional spending. This can include personalized room amenities, bespoke on-premise experiences, and exclusive access to hotel facilities.
Seamless Technology Integration (Tech-Stack): Integrating Revenue Management Systems (RMS) with other hotel technologies, such as PMS and POS systems, allows your hotel to track guest behavior, spending patterns, and preferences in real-time. This data is invaluable for identifying up-selling opportunities, and creating targeted marketing strategies.
Total Revenue Management Mindset: Adopting a TRM mindset involves viewing each guest as an opportunity to generate multiple streams of revenue. Your hotel operations team should train staff to recognize and act on up-sell opportunities, while maintaining a high standard of service.

Benefits of Using Both RevPAG and Total Revenue Management

When used together, RevPAG and TRM provide a powerful framework for maximizing your hotel’s revenue and profitability.

Revenue Optimization: TRM ensures that every revenue stream is optimized, while RevPAG provides insight into the guest’s overall value. Together, they allow your hotel to create targeted strategies that maximize revenue from both rooms and ancillary services.
Enhanced Guest Experiences: By focusing on RevPAG, your hotel can deliver personalized experiences that encourage guests to spend more on-property, leading to higher satisfaction, and repeat business.
Informed Decision Making: With a TRM approach, your hotel can gain access to comprehensive data across all departments. This data-driven approach enables more informed decisions about pricing, packaging, and service offerings.
Competitive Edge: Hotels that adopt TRM and RevPAG are better positioned to differentiate themselves from competitors, offering a more value-driven guest experience while maximizing profitability.
Sustainable Growth: Implementing TRM and RevPAG strategies leads to sustainable growth by optimizing revenue streams, and reducing reliance on room occupancy alone.

This diversified revenue approach enhances your hotel’s resilience in fluctuating market conditions.

My Final Thoughts

There’s no question, the hotel industry is evolving, and so must its approach to revenue management.

Total Revenue Management and Revenue Per Available Guest offer more comprehensive metrics that go beyond the limitations of traditional measurements like RevPAR and ADR. By adopting a modernized approach that integrates these metrics, your hotel can optimize revenue, enhance guest experiences, and build a more robust, modern operation.

To realize the benefits of TRM and RevPAG fully, your hotel needs to invest in technology, embrace a guest-centric mindset, and foster a culture of data-driven decision-making. In doing so, you’ll unlock new opportunities for your brand that drive profitability, and secure a more competitive edge.

Image: Canva

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October 4, 2024by David Klemt David Klemt No Comments

The Banks Have it Wrong

The Banks Have it Wrong

by Doug Radkey

It’s widely assumed that a well-written business plan will impress banks and SBA-type programs, and secure the funding required to launch a hospitality concept.

When starting a bar, restaurant, or hotel, most people are told exactly that: “You just need a business plan.”

The problem, however, lies in how these business plans are created. Too often, aspiring entrepreneurs turn to fill-in-the-blank templates provided by banks or online resources. They believe that simply completing the form will open the doors to financing, and start them on the path to building a successful business.

Unfortunately, this approach can do more harm than good. Let’s explore why the traditional reliance on business plan templates, including AI-generated business plans, can set both businesses and lenders up for failure.

In this article I dive into real-world examples, examine the success and failure rates of loans in the hospitality industry, and outline why banks and other programs need to rethink their loan approval processes to reduce risks for not only themselves but the entrepreneurs they serve.

The Problem with Business Plan Templates

Imagine this scenario: You’re excited to open a hospitality business, but you don’t know where to begin. You do some research, and learn quickly that you need a business plan to secure a loan. The bank or Small Business Administration (SBA) offers you a convenient template to complete, or you find one online that seems like it will do the job. You fill in the blanks, submit the plan, and, to your delight, the bank approves all or a portion of your loan.

However, the approval doesn’t mean your business plan is actually sound. Read that again.

It only means it meets the basic requirements of the bank’s loan approval checklist. A template provides a false sense of security, making entrepreneurs think they’ve covered all their bases when, in reality, crucial aspects of the business are left unaddressed.

For example, I recently reviewed a business plan for a client who had used a bank-provided template prior to our engagement. The plan was approved by the bank, but upon closer inspection, I found numerous errors: the start-up financial projections were unrealistic, the cash-flow analysis was incomplete, and crucial aspects of market analysis were missing.

The result? The project is on track to run out of money before it even opens its doors.

This example highlights a troubling issue: Templates don’t provide clarity, and they certainly don’t prompt critical thinking about the true costs to start, and the real challenges that the business will face once it’s operating.

The Risks of Using Templates

Business plan templates may seem like an easy solution, but they come with significant risks.

False Sense of Security: A completed template may look professional, but it doesn’t guarantee that the plan is sound or comprehensive. Key elements can be glossed over, copy and pasted, or simply misunderstood.
Lack of Critical Thinking: A template doesn’t ask tough or industry-specific questions. It doesn’t force you to analyze the competitive landscape, identify potential risks, or develop a clear financial strategy around a unique concept.
Inadequate Financial Analysis: Templates often provide a basic structure for financial projections but fail to help you understand the true costs of starting and running a business. A template won’t be specific to your concept, your revenue and cost channels, or industry benchmarks. The template won’t catch errors in your financials, leaving you and the bank exposed to significant risk.
Inability to Stand Out: In a crowded market such as the US, Canada, or Europe, differentiation is key. A cookie-cutter business plan won’t help you stand out from the competition. Despite handing them out, banks see thousands of these plans, and if you don’t demonstrate why your concept is unique and viable, you’re setting yourself up for denial.

The Dangers of AI-Generated Business Plans

As technology advances, AI-powered business plan generators are becoming more popular. I’ve seen a few ads for them over the past few months.

These tools claim to be able to create a business plan in minutes, promising efficiency and ease. However, relying on AI to write your business plan is just as dangerous as using a template. The same issues apply: lack of clarity, shallow financial analysis, and the absence of critical thinking.

AI-generated business plans may provide a surface-level solution, but they cannot replace the deep analysis required to make a business successful. Business plans need to be customized and thought out thoroughly, with insights drawn from real-world strategic planning.

Hospitality Industry Loans: Success and Failure Rates

The hospitality industry—particularly the accommodation and food service sectors—has one of the highest loan approval rates, but it also has some of the highest operator failure rates.

According to the U.S. Small Business Administration, in 2022 alone, 6,297 loans were approved for the accommodation and foodservice industry. These accounted for 13.2 percent of all small business loans, and 19.2 percent of total loan dollars. The average loan amount was US $784,768.

Despite these impressive loan numbers, the success rate of a business in this industry tells a different story. Only about 20 percent of hospitality businesses make it to their fifth year, and the average time to pay off a business loan ranges from five to ten years. The failure rates are driven by various factors, including cash-flow problems, a lack of market understanding, and poor financial planning.

So, why do banks continue to approve business loans based on inadequate business plans?

The Need for More than a Business Plan

Each reason for a business failing points to one underlying cause: lack of strategic clarity. In many cases, these businesses began with a standard business plan but skipped the other non-negotiable playbooks truly needed to be successful.

A well-rounded approach to strategic planning includes much more than a business plan.

Aspiring or seasoned bar, restaurant, and hotel operators need to develop feasibility studies to determine whether their business models can succeed in their target market. They also need concept development plans, prototype drawings, brand strategy plans, tech-stack plans, marketing plans, and financial playbooks.

Only after these steps are completed should the final business plan be written.

How Banks Can Improve Loan Success Rates

Banks have an opportunity to reduce their risks significantly—and increase the success rates of the businesses they fund—by requiring more than the completion of a business plan template during the loan approval process.

Instead, they should request detailed feasibility studies, along with the other playbooks, that go beyond the basics.

By working with entrepreneurs to ensure they have true clarity about their business model, market conditions, and financial outlook, banks can reduce default rates, and build stronger partnerships with their clients.

In addition, by encouraging the use of customized plans over templates or AI-generated plans, banks can ensure that they are investing in businesses with a clear path to success.

My Final Thoughts

Yes, a business plan is a vital tool for any entrepreneur, but it must be more than just a template, and lenders need to stop relying on these fill-in-the-blank approaches.

To build a successful business, you need more than a plan on paper; you need clarity, strategy, and a deep understanding of your market and financials. It’s time for banks, financing programs, and even angel investors to get it right and demand more than a standard business plan template. Only then will both the business and the lender see the long-term success they’re striving for.

Perhaps they, too, can then achieve success rates in the 90th percentile.

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Bright, light and airy restaurant interior with communal seating across from the bar

October 3, 2024by David Klemt David Klemt No Comments

The Psychology of Dining Space Design

The Psychology of Dining Space Design

by Nathen Dubé

When someone decides they’re going to dine out, they’re basing their selection on more than just what they want to eat; it’s about the entire experience.

The design and layout of a dining space impact guest behavior, emotions, and overall satisfaction to a significant degree. From the colors on the walls to the lighting overhead, every element plays a role in shaping the dining experience.

This article explores the psychological principles behind effective dining space design, offering insights into how restaurants can use these elements to enhance guest satisfaction, and boost sales.

The Impact of Color Schemes

How Different Colors Evoke Specific Emotions and Moods

Colors are powerful tools in setting the mood and atmosphere of a dining space. Different colors can evoke specific emotions and reactions, influencing how guests feel and behave in a restaurant.

Warm colors like reds, oranges, and yellows are stimulating, and can create a lively, energetic atmosphere, often used in fast-food restaurants to encourage quick eating and high turnover.

On the other hand, cool colors such as blues, greens, and purples have a calming effect, promoting relaxation and longer stays, making them ideal for fine-dining establishments.

Neutral colors like whites, grays, and beiges provide a clean and modern look, allowing other design elements to stand out, and making a space feel larger and more open.

Examples of Color Choices and Their Psychological Effects

Red is known to stimulate appetite and increase heart rate, making it a popular choice for fast-food chains.

However, it should be used sparingly in fine dining as it can be overwhelming.

Blue, on the other hand, suppresses appetite and promotes calmness, suitable for seafood restaurants or venues where a relaxed dining experience is desired. Green, associated with freshness and health, is often used in vegetarian and farm-to-table restaurants to reinforce the concept of natural, wholesome food.

Case Studies of Restaurants Using Color to Influence Dining Choices and Atmosphere

Consider McDonald’s use of red and yellow in its branding and interiors. These colors stimulate hunger, and create a sense of urgency, encouraging quick dining and high guest turnover.

In contrast, Starbucks uses a palette of warm browns and greens to create a cozy, inviting atmosphere that encourages guests to linger, increasing the likelihood of additional purchases.

Lighting and Its Psychological Effects

The Role of Lighting in Creating Ambiance and Influencing Guest Behavior

Lighting is a crucial aspect of dining space design, affecting the ambiance and guest experience significantly. Different types of lighting can evoke various moods, and influence how guests perceive the space and their meals.

Natural lighting enhances mood, and makes spaces feel more open and inviting. Restaurants with ample natural light are often perceived as more comfortable and welcoming. Ambient lighting sets the overall tone of the space. Soft, warm lighting can create an intimate and cozy atmosphere, while bright, cool lighting can energize the space. Task lighting focuses on specific areas, such as tables or bars, enhancing functionality and highlighting key features.

Differences Between Natural, Ambient, and Task Lighting

Natural lighting is best for creating a connection with the outdoors, and making spaces feel airy and fresh, often achieved through large windows and skylights.

Ambient lighting provides overall illumination, setting the mood and ensuring guests feel comfortable. Typically, ambient lighting is provided via ceiling lights, chandeliers, and wall sconces.

Task lighting is used for specific purposes, such as illuminating dining tables or highlighting menu boards, typically achieved with pendant lights and under-cabinet lighting.

How Lighting Affects the Perception of Space, Food, and Time Spent Dining

Bright lighting can make a small space feel larger, while dim lighting can create a more intimate and enclosed atmosphere.

Proper lighting enhances the visual appeal of food, making it look more appetizing. Warm, soft lighting is often used in fine dining to highlight the colors and textures of dishes.

Lighting can also influence how long guests stay. Dim, cozy lighting encourages lingering, while bright lighting can make people eat faster and leave sooner.

Acoustics and Soundscapes

The Impact of Noise Levels and Music on the Dining Experience

Sound is a critical yet often overlooked element of dining space design. Noise levels and the type of music played can impact the dining experience significantly.

High noise levels can create a sense of energy and excitement, but may also lead to discomfort and difficulty in conversation. It’s essential to strike a balance, ensuring the space is lively without being overwhelming.

Low noise levels promote relaxation and intimacy, suitable for fine dining or romantic settings. However, overly quiet spaces can feel uninviting and lack atmosphere.

Balancing Background Noise and Creating an Appropriate Sound Environment

Effective sound management involves balancing background noise, and creating a sound environment that complements the restaurant’s concept and ambiance.

Strategies include acoustic panels to absorb sound and reduce noise levels, creating a more comfortable environment. Soundproofing materials like carpets, curtains, and upholstered furniture can help dampen noise.

Music selection is also crucial, with the type of music and its volume aligning with the restaurant’s theme, and the desired guest experience.

Examples of Restaurants Using Sound to Enhance Guest Comfort and Satisfaction

Many upscale restaurants use a combination of soft background music and sound-absorbing materials to create a tranquil dining environment.

For example, the use of live piano music in high-end restaurants can enhance the ambiance without overwhelming conversation.

Seating Arrangements and Layout

The Psychological Impact of Different Seating Configurations

Seating arrangements and layout play a significant role in influencing guest behavior and satisfaction. The choice between booths, communal tables, and individual seating can impact how guests perceive the space, and interact with others.

Booths provide privacy and comfort, making them ideal for intimate gatherings and longer stays, creating a sense of enclosure and personal space. Communal tables encourage social interaction and a sense of community, suitable for casual dining, and environments that promote socializing. Individual seating offers flexibility and can cater to a variety of group sizes, allowing for easy reconfiguration of the space.

How Layout Affects Flow, Privacy, and Social Interactions

The layout of a dining space affects the flow of movement, privacy levels, and the nature of social interactions. Key considerations include:

ensuring there is enough space for guests and staff to move comfortably without congestion;
clear pathways; and
strategic placement of furniture to enhance flow.

Balancing the need for social interaction with the desire for privacy is essential, using partitions, plants, or varying seating heights to create distinct zones.

Design the space to facilitate the type of interaction you want to encourage, with communal tables and open layouts promoting socializing, while booths and nooks offer more private dining experiences.

Strategies for Optimizing Seating to Enhance Guest Comfort and Turnover Rates

Optimizing seating involves creating a comfortable environment while ensuring efficient use of space to maximize turnover rates.

Strategies include:

using a mix of seating types to cater to different guest needs and group sizes;
investing in high-quality, comfortable seating, which encourages longer stays and repeat visits; and
designing the layout to maximize the number of seats without compromising comfort to ensure tables are spaced adequately, allowing for easy movement and service.

Case Studies and Expert Insights

Interviews with Interior Designers and Behavioral Psychologists

Interviews with interior designers and behavioral psychologists provide valuable insights into the principles of effective dining space design. Experts can share their experiences and recommendations for creating spaces that enhance guest behavior and satisfaction.

Key Insights on Effective Design Strategies

Key insights from expert interviews include adopting a holistic design approach, considering all elements—color, lighting, acoustics, and layout—together to create a cohesive and inviting space.

Focusing on the needs and preferences of your target audience is crucial, designing with the guest experience in mind to create a memorable dining environment.

Continuous improvement is essential. This involves reviewing and updating your design regularly to keep it fresh and relevant, and staying informed about new trends and technologies in dining space design.

Real-World Examples of Restaurants That Have Successfully Utilized Design Psychology

Real-world examples highlight how restaurants have implemented design psychology principles successfully to enhance guest satisfaction and increase sales.

For instance, a fine-dining restaurant may use soft lighting, elegant color schemes, and acoustic panels to create an intimate and luxurious dining experience, resulting in a space where guests feel relaxed and pampered, leading to longer stays and higher spending.

Conversely, a casual eatery might incorporate vibrant colors, upbeat music, and communal seating to foster a lively and social atmosphere, attracting a younger crowd looking for a fun and engaging dining experience, boosting guest turnover and repeat visits.

Highlighting Specific Design Choices and Their Outcomes

Specific design choices, such as using warm lighting to highlight food presentation or arranging seating to encourage social interaction, can impact guest perceptions and behavior significantly.

Highlighting these choices and their outcomes provides practical examples of how design can influence the dining experience.

Practical Tips for Optimizing Dining Space Design

Actionable Advice for Restaurant Owners and Designers

Implementing effective dining space design requires practical and actionable steps.

Here are some tips to help restaurant owners and designers optimize their spaces:

Choose Colors Wisely: Select color schemes that align with your restaurant’s concept, and desired guest experience. Use warm colors for energetic spaces, and cool colors for calm, relaxing environments.
Optimize Lighting: Ensure a balance of natural, ambient, and task lighting to create the right ambiance, and enhance the dining experience. Use dimmers to adjust lighting levels based on the time of day, and desired mood.
Consider Acoustics: Use sound-absorbing materials and strategically placed music to create a comfortable sound environment. Avoid excessive noise that can detract from the dining experience.
Plan the Layout: Design the layout to maximize space efficiency while ensuring guest comfort. Use a mix of seating types, and ensure clear pathways for easy movement.
Align Design with Brand Identity: Ensure that all design elements, from colors to furniture, reflect your brand identity, and resonate with your target audience.

Tips on Choosing Colors, Lighting, and Furniture

Choosing the right colors, lighting, and furniture can have a significant impact on the dining experience:

Colors: Choose colors that evoke the desired emotions, and match your brand’s personality. Test different shades to find the perfect balance.
Lighting: Invest in quality lighting fixtures, and consider the color temperature of bulbs. Use lighting to highlight key areas, and create focal points.
Furniture: Select comfortable and durable furniture that complements the overall design. Consider ergonomic options to enhance guest comfort.

Conclusion

The design of a dining space is a crucial component of the guest experience. Understanding and applying the psychological principles of color, lighting, acoustics, and layout helps restaurant owners and designers to create environments that influence guest behavior, enhance satisfaction, and boost sales.

Thoughtful design not only improves the dining experience but also reinforces brand identity, and drives business success.

Image: Adrien Olichon via Pexels

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October 2, 2024by David Klemt David Klemt No Comments

5 Books to Read this Month: October 2024

5 Books to Read this Month: October 2024

by David Klemt

Our October book selections focus on restaurant and bar interior design, developing leadership skills, an infamous liqueur, and themed cocktails.

To review the book recommendations from September 2024, click here.

Let’s jump in!

Dining Out: The New Restaurant Interior Design

Impactful bar, restaurant, and hotel design is paramount. Your space is how your guests interact with your brand in person and online. It’s much more than just four walls; your venue is the physical manifestation and representation of your concept. Therefore, it’s important that you nail your design details. I think you’ll find Dining Out inspiring.

From Amazon: “The book takes the reader on a journey to some of the most cutting-edge examples in restaurant design and architecture from around the world. With a descriptive text for each project, it focuses on the craftmanship, color schemes, decorative details, lighting and furnishings that form the identity of the space, serving as a source of inspiration and reference for professional designers, foodies and other people involved in the restaurant business. Interior and exterior photographs, as well as blueprints of each design, present the reader with a rich range of styles, from modern minimalist spaces to ones defined by bold contemporary colors, a sleek industrial look or designs that look to the past for inspiration.”

Order your hardcover copy here.

Reset: How to Change What’s Not Working

Part of being an entrepreneur or member of a leadership team is implementing new initiatives. And sometimes, after monitoring these new initiatives for a set amount of time, we find out that they’re just not working. So, what do you do? This book will help you take decisive, timely action.

From Amazon: “Changing how we work can feel overwhelming. Like trying to budge an enormous boulder. We’re stifled by the gravity of the way we’ve always done things. And we spend so much time fighting fires—and fighting colleagues—that we lack the energy to shift direction.

“But with the right strategy, we can move the boulder. In Reset, Heath explores a framework for getting unstuck and making the changes that matter. The secret is to find ‘leverage points’: places where a little bit of effort can yield a disproportionate return. Then, we can thoughtfully rearrange our resources to push on those points.”

Place your pre-order for this book today.

Cocktails and Consoles: 75 Video Game-Inspired Drinks to Level Up Your Game Night

At the end of August, I shared some interesting information from a Datassential report. According to the intel agency, close to 200 million Americans are gamers, and that interest in gaming spans all ages. Further, gamers spent well over $50 billion on this particular hobby in 2023. Datassential also found that 45 percent of gamers have made F&B decisions after consuming video game-related ads or content, so this info is relevant to restaurant and bar operators.

From Amazon: “Created especially for video game fans, this cocktail book features controller-friendly recipes that all offer playful homage to favorite games and characters including The Oregon Trail Buck (The Oregon Trail), Pom of Power (Hades), The Miles Edgeworth MarTeani (Ace Attorney), The Cake Is a Lie (Portal), Stardrop Swizzle (Stardew Valley), Miriel, Pastor of Vows (Elden Ring), Ether (Final Fantasy XIV), Liquid Snake (Metal Gear Solid), Lady Dimitrescu Fizz (Resident Evil Village), Sardegna Simulator Spritz (Gran Turismo), Falcon Punch (Super Smash Bros.), and more. Cocktails and Consoles has the perfect drink for every player and every video game!

Click here to order your copy.

Malört: The Redemption of a Revered and Reviled Spirit

So, perhaps I’m a bit odd, but I like the taste of Malört. Strangely, even though I grew up outside of Chicago and began my journey in bars and nightclubs in the city, I didn’t try Malört until I moved to Las Vegas. If you haven’t tried it, and you have a distributor who can get it for your bar reliably, you, your staff, and your guests are in for an experience.

From Amazon: “Author and beer expert Josh Noel unpacks a uniquely American tale, equal parts culture, business, and personal relationships—involving secret love, federal prison, a David vs. Goliath court battle, and, ultimately, the 2018 sale of Jeppson’s Malört, which made Pat Gabelick, a 75-year-old Chicago woman who spent much of her life as a legal secretary, into an unlikely millionaire.”

Grab yours here!

Bar Hacks: Developing The Fundamentals for an Epic Bar

Yep, I’m taking the opportunity to recommend Doug Radkey’s first book. Radkey is, as you may know, the president of KRG Hospitality. In his this book he explains the importance of nailing the fundamentals in order to:

start your operator journey in the best possible position;
stabilize your business; and
scale when the time comes, if that’s what you want.

From Amazon: “This informative and conversational book is the perfect read for aspiring or seasoned bar, pub, lounge, or even restaurant owners, operators, and managers looking for that competitive edge in operations! If you’re looking for both fundamental and in-depth planning methods, strategies, and industry focused insight to either start or grow a scalable, sustainable, memorable, profitable, and consistent venue in today’s cut-throat industry–Bar Hacks is written just for you!”

Click here to get your copy today!

Image: Mikołaj on Unsplash

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