Ghost Kitchens In The Lodging Industry: A F&b Strategy For Hotels

Posted: Sep 29, 2020

A Ghost kitchen is a professional food preparation and cooking facility that serves customers exclusively by delivery. Ghost kitchens do not have a physical location that customers can enter (yet). The concept of ghost kitchens strips down the traditional dining establishment by removing dining areas and fancy décor. Instead, they serve as kitchens for restaurants to prepare food to deliver to customers. Several restaurants can operate out of the same ghost kitchen, either working from the same facility or breaking the space into separate areas. Ghost kitchens have emerged as a business model due to the rapid growth in consumer demand for restaurant delivery. Lower overhead costs, ability to change, and sociality changes are reasons why the ghost kitchen model is thriving; the concept has even entered hotels and catering.

Opening a fully staffed restaurant is a significant investment. Commercial real estate prices have in large cities like New York, Los Angeles, and Washington D.C. have made it nearly impossible for small business to keep their doors open. Ghost kitchen business model has a lower overhead cost and does not have to pay higher rent like a traditional restaurant. Chipotle Restaurants has to dedicate 75% of its space to seating, while 90% of their customers grab and go. By comparison, a ghost kitchen can open inside a kitchen with as little as 200 square feet of space and operate a viable restaurant business with a minimal footprint (Mohan, 2017). Cracker Barrel just announced they are turning one of their restaurant's units into a strictly off premises catering operation type of Ghost Kitchen.

Ghost kitchen can switch menus rapidly. Not having an actual storefront means consumer do not have consistent expectations. For instance, a ghost kitchen can quickly drop a Middle Eastern concept after encountering lower-than-expected sales. With differentiating versatility, ghost kitchens can offer similar or identical menu items that are successful at other restaurants. Ghost restaurants can also focus on delivery friendly dishes like salads, sandwiches, and grain bowls.

By Fred DeMicco
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