Hospitality News November 2021
Beep Boop Bleu Cheese 🤖🥗
Salad chain Sweetgreen buys kitchen robotics startup Spyce
Like so many other aspects of the robotics world, the pandemic has dramatically accelerated interest in the automated kitchen. After all, the food and restaurant industry was deemed essential amid global shutdowns, but finding kitchen staff proved a problem for many, especially early on when questions remained around COVID’s transmission.
This week, California-based fast-casual salad chain Sweetgreen announced plans to go all-in on automation with the acquisition of Spyce. Founded in 2015, the Boston-based startup started making waves a few years back as a spinout of MIT mechanical engineering students. First serving up food at the school’s dining hall, the team ultimately opened a pair of automated restaurants in the Boston area. The startup notes, “our Spyce restaurants will stay open at this time.”
Sweetgreen plans to eventually incorporate Spyce’s technology into its restaurants. It will likely take some time to scale up to the needs of the chain, which currently operates more than 120 locations across the U.S.
“We built Sweetgreen to connect more people to real food and create healthy fast food at scale for the next generation, and Spyce has built state-of-the-art technology that perfectly aligns with that vision,” Sweetgreen CEO and co-founder Jonathan Neman said in a statement. “By joining forces with their best-in-class team, we will be able to elevate our team member experience, provide a more consistent customer experience and bring real food to more communities.”
Like pizza, salads are a clear target for early food automation. They’re both popular and relatively straightforward to automate — essentially mixing a bunch of ingredients from different chutes into a bowl.
Sweetgreen is quick to note that the plan isn’t to replace employees outright, however.
“[T]eam members will be able to focus more on preparation and hospitality moments while having the opportunity to work with state-of-the-art technology,” the company writes. “Invest more in training and development to support team members to become Head Coaches. Interested team members will be able to develop technology-facing skills to operate and maintain Spyce technology.”
The deal is expected to close in Q3. Terms were not disclosed.
If a Tree Falls In The Woods, Will We Get Lumber? 🌳
Hotel construction gains steam, but you must account for supply-chain, labor issues
New construction for hotels was almost nonexistent in 2020, but activity is starting to pick up for the back half of 2021 and beyond.
Stephen Siegel, principal of Fairfield, New Jersey-based full-service construction project management firm H-CPM, which specializes in hospitality, said during the “Construction update: Leading indicators and long-term sentiment” panel at the 2021 Lodging Conference that many hotel owners over the past year and a half have not had the capital to build after exhausting furniture, fixtures and equipment reserves to cover operating expenses.
However, he said, there’s now a pent-up demand for contractors.
Jason Cowan, senior vice president of development for signature brands at Choice Hotels International, said the company is starting to get “a decent percent more of new construction applications” after basically taking a year off of new projects.
Choice’s owners are “betting on the future,” he said, and are locking projects in now to start the building process, with hopes that the supply chain normalizes and more lending opportunities open up.
Choice’s hotel portfolio includes a mix of limited-service and extended-stay brands, which are “low risk,” having shown resiliency during the pandemic, he said
Brian Mitchell, loan officer of Dallas, Texas-based Hall Structured Finance, said he is more optimistic about new projects going forward, predicting that more capital will enter the hospitality space.
“One takeaway from COVID is hospitality is stronger than anybody thinks,” he said.
Considerations For Approaching New Builds
As material prices have escalated, supplies have also been harder to come by.
Keith Mack, director of development services at Atlanta-based real estate development and acquisitions company Regent Partners, said developers should move quickly to select vendors and write purchase orders for furniture, fixtures, and equipment so that projects are not delayed.
He said he anticipates those percentages will continue for the next 12 months.
In August, Hyatt Hotels Corp. debuted the Thompson Savannah, its first property of the brand in Georgia. The hotel was developed through a joint venture with Regent Partners, Mariner Group, and Cadre.
Mack said some of the supplies for the hotel were ordered a year ago, and there are still issues obtaining them.
While there’s not much that can be done about the supply chain disruption, Cowan said Choice encourages its owners to build better relationships with the franchisor and set clear expectations on the timeline.
“The worst thing they can do is not tell us what’s going on,” he said. “We try to balance leniency and still keep our brand standards.”
Labor to complete the projects is hard to come by, too. Siegel said the team of contractors he uses are from all over the country, not just local, and because of the lower hotel occupancies right now, the company can give them rooms on-site or at extended-stay properties.
Mack said it’s tougher in the coastal markets to attract subcontractors and tradespeople to work on projects. When developing in Savannah and Charleston, he said, about 85% of his team’s workforce will come out of Atlanta.
Considerations for Approaching Renovations
Cowan said Choice has been lenient with owners over the past year and a half, allowing them to focus more on the property’s condition rather than its design. However, guest scores are showing that satisfaction is declining as a result.
“You really have to balance that because the guest doesn’t care [if there’s not any capital to invest.] They want value for their money; they want a good experience. It’s tough to get a guest back when they have a bad experience,” he said.
But if an owner is swamped financially and must ask for more time to complete a renovation, Cowan suggests taking a look at what the hotels in that property’s comp set are doing.
“You don’t want to get buried by your local comp set,” he said, adding if it’s possible, now is the time to take advantage of the lower occupancies and renovate. “I do think that the hotels that can renovate right now, and can time it correctly where they come out of this with a fresh property, they’re going to be the winners.”
Mack said renovations to prioritize in a post-COVID-19 world include upgrading HVAC systems, but investors must first ensure the bones of the hotel can handle it.
Siegel emphasized the importance of the due diligence process when building or renovating.
Reducing Costs on Design Prototypes
Cowan said Choice is approaching prototypes in a different way now, drilling down to what’s most important to the guests and which amenities make the most money for the owner.
Earlier this year, Choice rolled out a new prototype for its Comfort brand. When meeting with an advisory board to decide what this prototype would be, one of the first things that every developer wanted was to reduce square footage to lower construction costs, he said. Choice added “flex spaces,” where a breakfast room becomes a meeting room.
One addition to the prototype, which wasn’t cost-saving but created value, was an outdoor porch space.
“It becomes a huge amenity, people like being outside now … [and it will] help with bookings and revenue,” he said.
Choice also unveiled a “secondary version” of its Cambria brand, where square footage is reduced to lower cost-per-key, and food and beverage offerings are slimmed down.
Mack said because the Thompson brand is a custom brand for Hyatt, it’s key to work with Hyatt to curate public spaces from a design perspective.
Radisson Hotel Group Americas Partners With Aditi Ashok 👏 *Golf Clap*
Radisson Hotel Group Americas announced a two-year partnership with brand ambassador, professional golfer Aditi Ashok. Ashok is an Arjuna Awardee, a two-time Olympian, a three-time LET winner (2016 Qatar Ladies Open, 2016 Hero Women’s Indian Open, and 2017 Fatima Bint Mubarak Ladies Open), and ranked first in putts per round (28.91) on the LET in 2016. Ashok made her Olympic Games debut as the youngest golfer in the field representing India at the 2016 Summer Olympics and finished in fourth place at the 2020 Summer Olympics in Tokyo. Ashok has recorded five worldwide wins (two of these as an amateur), and over 25 top-10 finishes, including a career-best T3 result at the LPGA DOW Great Lakes Bay Invitational in 2021 and in 2018. Ashok’s 28.67 putting average was the second-lowest putting average on the LPGA Tour. Since turning professional, Ashok has retained her full playing status on both the LET and the LPGA Tour since 2016 and 2017 respectively.
Radisson Hotel Group Americas expands its golf presence with Ashok to further optimize brand awareness on a national stage. Ashok will display the Radisson Hotel Group Americas logo on her hat, gear, and more while continuing to make strides in her golf career on national television.
“We are thrilled for this new partnership. Aditi is a rising star in the golf community, and an ideal fit on our team of brand ambassadors,” said Jim Alderman, CEO, Radisson Hotel Group Americas. “With Aditi representing our brand on the LET and the LPGA Tour, Radisson Hotel Group Americas will be front and center with golf fans, helping to extend our presence in the golf world.”
“I am really excited about this great new partnership and proud to represent Radisson Hotel Group Americas on the LET and the LPGA Tour,” said Ashok. “I am incredibly thankful to Radisson Hotel Group Americas for believing in me, and look forward to the journey ahead working with the Radisson Hotel Group Americas team.”