News for the Hospitality Executive
Chefs Rick Tramonto and Gale Gand Joining Other Celebrity
Chefs in the Trend
that is Transforming Hotel Dining; Marriage Between Hotels and Celebrity-Chef
Restaurateurs Can be Mutually Beneficial
Bergen, Chicago Tribune
Knight Ridder/Tribune Business News
June 18, 2006 - What starts in Vegas doesn't always stay in Vegas--and that appears to be increasingly true when it comes to celebrity chefs opening restaurants at hotels.
Michelin three-star chef Joel Robuchon is coming to the Four Seasons Hotel in New York, joining the likes of Todd English and Alain Ducasse, whose restaurants at the W Hotel in Union Square and the Essex House, respectively, have been hugely successful. Top-name chefs are transforming hotel dining in other major markets as well, including South Florida and San Francisco.
Chicago has been a bit late to the party, with some of its finest hotels, such as the Four Seasons, The Peninsula and the Park Hyatt, running their own very fine restaurants.
But an ambitious project by two of Chicago's most celebrated chefs--culinary partners Rick Tramonto and Gale Gand, of the acclaimed restaurant Tru--is the latest signal that change is afoot.
And observers say that while success is not always assured, the pace of the trend will only quicken.
"In the old days, hotels were happy to lose a little or break even on their restaurants, but now that they've learned they can make money with a celebrity chef, it's a new ball game," said Clark Wolf, a New York-based restaurant consultant. "There isn't a hotel company in North America . . . that isn't thinking about it."
Indeed, in Chicago, the recently opened The James hotel features a steakhouse by New York phenom David Burke. And Tramonto expects celebrity chefs will open restaurants in some of the big condo-hotel projects that are in the pipeline.
But next up, Tramonto and Gand this fall will unveil four new restaurant concepts at the Westin Chicago North Shore Hotel, a 411-room hotel going up at Lake Cook Road and Milwaukee Avenue in Wheeling. None will compete, on the most rarefied level, where Tru operates.
Rather, there will be Osteria di Tramonto, a midpriced Italian spot serving breakfast, lunch and dinner; Gale's Coffee Bar, with grab-and-go breakfast and lunch items; Tramonto's Steak & Seafood, a fairly pricey dinner-only restaurant; and RT lounge, featuring small plates of oysters, shrimp and the like.
And that's just the beginning.
The partnership formed for this venture intends to open restaurants in a 525-room Le Meridien planned for Rosemont, and in Naperville, at a Holiday Inn Select that is being renovated and will be rebranded. And they have their eyes on other markets, including Las Vegas, Washington, D.C., New York, Miami and Scottsdale, Ariz.
Tramonto declined to quantify their ultimate goals.
"I never graduated from high school. I never went to culinary school. I've been blessed with what God has given me," he said. "I never thought I'd get this far, and I never set limitations." In addition to their work at Tru, both chefs are cookbook authors and television personalities.
A newly formed company, Buffalo Grove-based Cenitare, is the engine behind the expansion.
Cenitare partners include developers Peter Dumon, president of The Harp Group, based in Oakbrook Terrace; and David Bossy and Mike Firsel, the chairman and chief executive, respectively, of Oak Brook-based Mid-America Development Partners. Those two companies are developing the $125 million Westin hotel/retail/restaurant complex in Wheeling, where the restaurant piece will cost $10 million to develop.
Tramonto also is a partner in Cenitare, which in Latin means "to dine often," and has a licensing agreement for the use of his name. Gand, the mother of a 9-year-old and 1 1/2-year-old twins, opted to link up in a consultant capacity only. As well, she has a licensing agreement on the coffee bar.
Chicago restaurateur Richard Melman, chairman of Lettuce Entertain You Enterprises Inc. and a partner with Tramonto and Gand at Tru, is involved to a smaller degree. He is not part of Cenitare, but has given backing to Tramonto and Gand. They plan to continue at Tru, where Tramonto, 43, is culinary director and executive chef and Gand, 49, is executive pastry chef.
The marriage between hotels and celebrity-chef restaurateurs can be mutually beneficial, observers say. The trend first took off in a noticeable way in Las Vegas with Wolfgang Puck leading the way in 1992, followed by chefs such as Emeril Lagasse and Mark Miller.
"It's generally accepted in the industry that a successful celebrity-chef restaurant at a hotel can do 3 to 4 1/2 times in sales what a hotel can do with its own restaurant," Wolf said.
As well, the hoteliers "get rid of the aggravation of operating a restaurant," said Ace Lanahan, vice president with Philipsborn Co., a Chicago mortgage banking firm.
From the chef's point of view, "they normally get an attractive occupancy cost or lease rate, and sometimes a percentage of sales," said Dennis Lombardi, executive vice president of food-service strategies for W.D. Partners in Columbus, Ohio.
Tramonto, who declined to disclose the financial terms of his deal, said he was attracted by the financial foundation provided by Mid-America and the management expertise of Starwood Hotels & Resorts Worldwide Inc., whose brands include Westin.
"And there will be 400 bedrooms above the restaurant--what a beautiful thing," he said.
But there are potential pitfalls when operating within a hotel, observers say.
Unless the restaurant has a separate identity and separate entrance, it can have difficulty attracting customers from outside the hotel, said Ted Mandigo, an Elmhurst-based hotel consultant.
Cerise, a bistro operated by Levy Restaurants in the former Le Meridien, won strong reviews but suffered from low traffic. The hotel, located above the North Michigan Avenue shopping center, has been sold and rebranded as the Conrad Chicago.
"The restaurant is being repositioned now that the Levy contract expired," a hotel spokesman said.
"We enjoyed creating and operating Cerise," said Chris Harter, president of Levy's Restaurant. "The end of our agreement coincided with new ownership taking over the hotel. Their model is to handle all food and service in-house, instead of outsourcing to third-party companies."
Operating a restaurant in a hotel also can be more costly than a stand-alone because of the need to stay open during hours that serve hotel guests' needs, and to provide room service, Mandigo said.
And sometimes there are clashes in vision. In the mid-1990s, Chicago restaurateur Charlie Trotter opened a fine dining restaurant at the MGM Grand in Las Vegas, only to close it a year later. At the time, he complained that the hotel wanted to "bistro-ize" the environment.
He has gone on to develop a signature restaurant at the One & Only Palmilla in Los Cabos, Mexico, and Wolf says it appears to be doing very well.
There also can be issues of quality dilution.
"Some restaurants work really well in the city, and in the bedroom communities they water it down and damage themselves," Wolf said.
The Tramonto team brushes off these potential issues, noting the restaurants will benefit from strong signage, separate entrances, a deep talent pool and the chefs' reputations, which they are banking on to bring in droves of locals as well as business travelers.
Outside observers say there is reason for optimism, especially given the duo's stellar reputation and the fact that Wheeling already is a strong restaurant market, with offerings such as Tuscany, Pete Miller's Seafood & Prime Steak and Don Roth's Blackhawk.
"The notable ones draw from the whole Chicago area," said Mandigo. "Given the right design and curb appeal, these [new] restaurants have a good shot."
Copyright (c) 2006, Chicago Tribune
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