Hi Julie! Thanks for responding.
It's definitely a concept that a lot of BP members might not have exposure to, but one that is interesting - a lot of the strategies here could potentially apply in some way to other types of real estate investing outside of hotel investing.
You're absolutely right that a lot of code (as well as brand standard requirements) can often force developers or investors to overbuild a kitchen with plenty of equipment that they don't need or won't use too much.
There are ways to help cut costs here and there.
1. Build the menu first
For many hotels in particular, it starts with building the menu first and then outfitting the kitchen based on what is needed to create the menu. It's actually here where a lot of the cost saving can be made. If I know that I'm making most of my items using a fryer, then I might not invest in as large of an oven or a grill. (Despite growing health-conscious trends, the bottom line is that flour and potatoes tend to make a kitchen's money as opposed to fresh produce and meats, at least for now).
Menus where you're using similar items across breakfast, lunch, and dinner also have the potential to cut costs. If you're using onions and tomatoes in meals served at all times in the day, chances are you are streamlining your costs and increasing efficiency in the kitchen during operation. A lot of restaurants now are also considering this in combination with menu design - we're seeing simplified or smaller menus making a bigger splash.
2. Sharing kitchen space
The two restaurants, one kitchen model has been around for awhile and continues to be a popular option. Two restaurants might share a kitchen located in the middle of two seemingly separate restaurants so that neither restaurant foots the full kitchen and maintenance bill during operations. With some dual brand hotels, which combine two different hotel brands in the same construction, there is also potential to share or consolidate kitchen operations as opposed to operating out of two separate kitchens.
3. New vs. refurbished equipment
When you buy a brand new car from a dealership, we know that the value of that car immediately drops as soon as you drive it off the lot. Restaurant owners and hoteliers often can use this same principle to their advantage when building out a kitchen. There are lots of high-quality oven ranges that have long operational lives, for example. After the first year of use, those pieces of equipment drop in price considerably, even if the quality of the equipment is still very high. By looking at refurbished markets you can find considerably cheaper equipment for your kitchen without sacrificing quality.
4. Appealing to brands
From a hotel operational perspective (or even a government one), you can apply or appeal for alterations to kitchen design if you can make a strong case for it. Of course, there's a lot of variability in how easy that process is, both depending on your location and the brand you are working with, if applicable.
Hope this is insightful!
John
