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Mission: Transition

Restaurant renovations and conversions often appear to be somewhat of a magical transformation process to customers. It’s always a surprise when suddenly, and sometimes without warning, your favorite neighborhood Mexican taquería is completely changed into a high-end American gastro-pub.

On reality TV, such as Gordon Ramsey’s popular FOX show “Kitchen Nightmares,” dramatic “overnight” refurbishments regularly shock viewers and thrill the restaurant owners. Of course, restaurant industry insiders know that TV is not real life. Repositioning a recently converted restaurant, especially one with a hotel affiliation, offers its own set of unique issues and diverse challenges, but also many rewarding benefits.

RIVIERA HOTEL & CASINO
R Steak & Seafood, located in the famed Riviera Hotel & Casino in Las Vegas, has recently undergone a major conversion, name change, and repositioning. Its former incarnation was called Kristofer’s Steakhouse, which opened in the late 1980s and had not been renovated since. Featuring a new menu, modern design, and stylish décor, R Steak & Seafood’s affordable, yet upscale atmosphere is a considerable change from its past life.

Riviera President and CEO Andy Choy was intimately involved with R Steak & Seafood’s conversion process. Choy joined the company in 2011, and this was the hotel’s first of many multi-year renovations. He ensured the repositioning was in sync with the property’s overall refurbishment goals.

“We wanted to be respectful of our previous menu, but we also wanted to give the design team the freedom to create a fresh, new space to take us into the future,” Choy says.

Opening in July 2011 after an intensive, four-week conversion, R Steak & Seafood re-trained the staff, and hired an experienced chef, Jason Bradley, who was instrumental in creating the new menu. Later this year, R Steak & Seafood will increase its hours of operation for breakfast and lunch.

“One of our major challenges has been attracting a new clientele, and growing the business, while not alienating our existing customers,” Choy says. “It’s not about increasing the portion size or lowering the prices, but marketing the restaurant strategically. The renovation and transition process has really allowed us to put our best foot forward and make a great impression on our hotel guests.”

His advice for hoteliers? “As early as possible, involve as many constituents in the renovation project, including the front and back of house staff, your sales and marketing team, and of course your designers and contractors,” Choy says. “It’s a lot easier to get everyone’s input from the beginning, as opposed to halfway through the project when you find out you are designing a room where your servers can’t do their job properly.”

THE VENETIAN AND THE PALAZZO
Another Las Vegas property that is in the midst of constant renovations and restaurant repositioning is the massive Venetian-Palazzo complex. Featuring over 20 restaurants combined, these two hotel and casino resorts boast the most James Beard award-winning eateries under one roof.

Sebastien Silvestri, vice president of food and beverage at the Venetian and the Palazzo, has been involved with many restaurant conversion projects throughout his 20-year career. Not surprisingly, he is continually working on multiple conversions within the Venetian and the Palazzo. Currently, the Venetian’s 12-year-old La Scena lounge is undergoing a serious overhaul and will reopen June 1. It will be repositioned as an innovative rock ’n’ roll concept, creatively tied into the hotel’s upcoming Broadway-caliber show.

The Venetian and the Palazzo let their guests determine when restaurants should be considered for a remodel, as everyone receives a post-stay questionnaire that is analyzed by the management.

“A restaurant conversion is ROI driven and we try to minimize the risk,” Silvestri says. “So, we forecast our business and determine how many additional customers we will gain by repositioning a restaurant, how the marketing campaign will support the new venue, and how much additional revenue we will generate from the renovation.”

Due to the high volume in hip Vegas restaurants, these establishments tend to show their age faster than those in other cities, and require major changes to stay ahead of the curve. According to Silvestri, a restaurant on the Strip can make upward of $1 million per month, so just closing for a week is expensive.

“In any renovation, there is a tremendous amount of details and planning—
before the repositioning,” Silvestri explains. “Timing is crucial, as we want to keep our hotel guests happy, and a construction site is not pleasant for them to look at. Working within a budget is always a challenge, as unexpected issues arise when a project is in progress.

“A restaurant is a business and it’s important to invest in your business as well as be realistic about it,” he adds. “The industry changes dramatically all the time, and a hotel restaurant’s successful transition depends upon much more than just food and beverage. You need to have a very appealing product overall, and that appeal is reflected in the façade, the energy, and the theme.”

THE INDEPENDENT
On the East Coast, a seafood restaurant, Fish, has recently experienced something of a conversion trifecta: a move across town, a major construction project, and a new relationship with a local Philadelphia boutique hotel, The Independent.

When Fish had outgrown its original locale, Owner-Chef Mike Stollenweark relocated several blocks away. In January 2012, the new restaurant opened in a space three times larger on a bustling corner, which happens to be situated on the first floor of the Independent Hotel.

Like many conversions, Stollenweark inherited a spot that had a number of diverse previous tenants. Prior to Fish, a revolving door of bars occupied the corner, and most recently, it was home to a gay-friendly nightclub. A successful repositioning was essential for the restaurant to thrive.

“We used the existing layout, but renovations were required to create the upscale ambiance we had envisioned,” Stollenweark says. “We worked closely with the hotel company to breathe new life into the space.

“We had an initial repositioning challenge, because the corner was well known for the nightclub,” he continues. “We had to completely rethink our sales, marketing, and guest satisfaction tactics. Now, many of the previous club patrons visit the restaurant, and have responded positively to all the recent changes.”

This was the first time Stollenweark had been involved with opening a restaurant in a hotel. During the transition process, he quickly discovered some unanticipated benefits, such as providing room service to hotel guests, and the organic marketing opportunities that exist.

“In addition to our exceptional location, we have the extra support from the hotel’s staff, additional marketing help, and immediate assistance if we have a plumbing or electrical problem,” Stollenweark says.

“The hotel also helps us to reposition our restaurant more effectively, which is beneficial to our business and getting acclimated to the new neighborhood,” he adds.
“We are thrilled Fish is a part of our hotel, and they are an ideal tenant,” says Jim Evans, general manager of the Independent. “Through the restaurant’s repositioning, they have already improved the property esthetically and elevated the community by eliminating the late-night rowdy club noise. We also now have a convenient, high-end restaurant that we can recommend to our guests.”

Stollenweark believes that a major key to a successful conversion and repositioning is hinged on its location. “During a transition, it’s important to be visible to hotel guests, as well as the community,” he says. “An inviting restaurant in full view of a high-traffic area is perfectly positioned to attract new customers. And we are already reaping the rewards of our move and conversion.”

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