High-end hotels compete on experience and famous and award-winning chefs act as a big draw for guests seeking great experiences.

There’s just something special about dining out. Being able to sample flavors and experience that differ qualitatively from what you can get at home is enjoyable. And consumers across America, by and large, agree.

Nine out of 10 consumers surveyed by the National Restaurant Association say they enjoy going to restaurants, and 64% of full-service diners say their dining experience is more important than the price of the meal.

The near-universal appeal of dining out is one of the reasons food & beverage places have performed better than many other retailer categories over the last several years. For instance, for every $100 consumers spend at grocery stores, they spend $128 dining out.¹

This emphasis on dining out extends towards hotel guests. Fully 50% of global travelers book restaurant reservations before their flights.² In fact, the experiential element of dining takes on even greater priority for travelers. Nearly 1 in 5 consumers will travel specifically to seek out new culinary experiences and 60% of luxury travelers prioritize staying at hotels with great restaurants.​

Hotels have seen an increase in the portion of their total revenues that come from venues, including restaurants on their premises.³ As a result, hotels are elevating their dining experiences, much to the delight of guests. Positive reviews about hotel restaurants, chefs and bars surged 40% from H1 2023 to H1 2024⁴

Famous chefs fire up high-end hotel rates

Travelers in the last century might have chosen a hotel for its reliable and standardized service. Today’s travelers seek out distinct experiences. To meet this demand, high-end hotels can now partner with local and nationally recognized chefs to create unique dining destinations.​

To study the economic risks and benefits of such establishments in high-end hotels, we compiled and analyzed a database of hotel restaurants. We also interviewed subject matter experts working at the intersection of food and hospitality:

Prestige restaurants*⁵ in high-end hotels command significantly higher room rates and strong RevPAR premium relative to counterparts of the same class in the same market.

Legal arrangements between restaurateur and hotel range from real estate leases, in which the restaurateur has both the most control and the most risk, to a variety of non-lease agreements offering hotels greater management oversight at a higher cost.

Food is a draw, but the rooms are still the bread winners

Offering a prestige restaurant (i.e. one with a celebrity chef, James Beard award or Michelin stars)​ can be very profitable to a hotel’s bottom line – but not merely from restaurant profits alone.

In fact, the average gross hotel profit from food and beverage operations is 27.8%.**⁶

Hotels trade primarily in experience, and great restaurants are an essential ingredient of that experience, offering another means of adventure, discovery, and enjoyment. This is evidenced by high-end hotels with prestige restaurants enjoying a 6.7 percentage-point higher occupancy compared to similar hotels without such restaurants.

High-profile restaurants, therefore, act as a major draw for potential guests, and it is the room that earns hotels the lion’s share of their profits.

72.9% of average hotel room revenue translates to gross profit.⁷

By bringing in exciting food options, hotels hope to drive up demand for rooms, justify higher room rates and generate more F&B profits.

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Notes:

1. Source: US Census Bureau
2. Source: Stories from Hilton
3. Source: STR/CoStar
4. Source: Hotels.com​
5. Restaurants with celebrity chef, James Beard award or Michelin stars
6. Source: JLL Analysis of STR/CoStar data. Data as of year-end 2024
7. Source: JLL Analysis of STR/CoStar data. Data as of year-end 2024