The Latest Hospitality Collaboration: Ghost Kitchens x Hotels

Ghost kitchens have been trending lately in the hospitality industry.

No, there are no ghost chefs involved. Okay, that was a lame joke. Never mind!

While the trend seems to be intriguing, what’s more interesting is the fact that ghost kitchens and hotels are now working together.

Sounds weird? Exciting?

I know it’s a little difficult to make sense out of this at first. But, when you dig a little deeper, the business opportunities (for both hotels and ghost kitchens) are immense. 

This article is going to be all about this peculiar yet intriguing collaboration between accommodation providers and ghost kitchens.

What is a Ghost Kitchen?

Ghost kitchen, also known as cloud kitchen, is a food preparation facility for deliver-only meals. To put it simply, there’s nothing called dine-in or takeout, customers order their food and get it delivered to their doorsteps.

Note: Some cloud kitchens do offer takeout meals and drive-through; however, that’s not something common.

The Rise of Ghost Kitchens

Food delivery has always been one of those industries that people love.

I mean who doesn’t want their food to reach them while they watch their favourite show on TV.

Because of that, the hospitality industry witnessed more and more players entering this segment. Additionally, it has also gone through massive growth and rapid technological advancements.

This was a major push that brought cloud kitchens into the picture.

Next up, the Covid-19 pandemic happened and it flipped the hotels and restaurants. Hotels couldn’t make any profit from their on-site restaurants and most of them sat vacantly.

So, what could hoteliers do? Rent out the space? Well, that sounds good!

But to whom?

What if hotels rent out the space to someone who could benefit the hotel in various other aspects?

That’s where everything changed.

Hoteliers became strategic and re-thought their business module.

Further, it’s not just properties but cloud kitchens have also marked their spot in the industry.

Even during those critical covid circumstances, ghost kitchens were able to sustain; rather, stay profitable.

But how?

Even before the pandemic, almost everything started happening online. In terms of restaurants, there was a substantial shift in demand; from dining-in towards home-delivered food. Not just demand, but even government restrictions played a role in this shift.

Meaning, this entire shebang provided a great opportunity to anyone having a kitchen facility to sell their food. Further, cloud kitchens are easier to start and run, because of low entry costs and capital expenditure.

How Can Hotels Benefit From This Collaboration?

The pandemic has not only ushered in the growth of cloud kitchens but has also started a new collaboration trend where ghost kitchens and hotels work together. And surprisingly, it’s becoming beneficial for hotels.

Rent out underutilized hotel rooms, kitchens, and tools

What are the things that a cloud kitchen needs and hotels have? I think you’ve probably understood what I am trying to say.

For example:

Hotel Roy was badly hit by the pandemic in 2020. To revive and sustain, the hotel owner decided to go with cost-cutting by shutting the in-house restaurant.

In December 2020, hotel Roy was approached by a cloud kitchen named Delicacy that wanted to rent the kitchen.

Today, it’s been more than a year and hotel Roy is still working with Delicacy. And guess what? The hotel is getting monthly rent from its unutilised kitchen and even rented a room to use as a storeroom.

“It’s all about repurposing underutilised spaces.”

Do away with the need of having an in-house restaurant

If hotels become adept at repurposing their spaces, they can certainly have a good amount of money flowing in and do away with aspects that aren’t prominent.

No doubt, in-house restaurants are supremely critical, but there are ways a hotel can tweak it around.

Let me stretch the above example to explain this part better.

Hotel Roy could see how quickly Delicacy became profitable with their rented kitchen and room. So, the hotel came up with a partnership idea.

Hotel Roy offered the cloud kitchen to become their in-house restaurant/food partner.

How would this work?

The hotel has set up a food ordering counter along with a few seating arrangements. Every time the hotel receives an order, it would pass it on to the cloud kitchen. They would get the order prepared and the hotel staff would serve it to the guests.

This is clever hoteliering. Period.

Get a better opportunity to upsell

Letting a ghost kitchen operate on and from your hotel opens up a lot of opportunities for upselling.

How about creating an exclusive menu for in-room dining? You can strategically create that menu to drive more sales.

You take the order and fulfil it with the help of the ghost kitchen. You can pay the kitchen their cut and keep your profit.

Furthermore, you can also curate packages where you include certain meals.

There are various ways for upselling when you are partnered with a cloud kitchen. You just need to know the right strategies to pull things off.

Can offer better room service to guests

Cloud kitchens usually have less hustle and bustle compared to conventional hotel restaurants. Because they are all dependent on orders coming in for delivery.  

Meaning, when you join forces with the ghost kitchen, they have that time to prepare the meal for your guests and you can always fulfil room service orders on time.

Not just that, the quality of food is also better because of the same reason.

Therefore, you’ll be able to deliver a better guest experience.

What’s in it for Ghost Kitchens?

The collaboration between ghost kitchens and hotels are, hands down, beneficial for hotels; that too at a greater level.

But what about ghost kitchens? Are there any advantages on offer for them?

The answer is a YES!!!

The virtual restaurant ecosystem is evolving at a speed you can only think of. It’s not just the trends but strategies are changing too. And the latest is certainly the one where virtual kitchens work with hotels or under their infrastructure.

Get a better infrastructure at a reasonable price

If you’re planning to start a ghost kitchen, the cooking facility itself is going to need a lot of investment.

You have two choices here; wait, three choices. Either set up a facility, rent an existing professional kitchen, or use your home kitchen (which is certainly not feasible).

If you ask me, I highly suggest you go with the second option. Yes, I have valid reasons too.

As most hotels’ in-house restaurants are under loss and spaces are vacant, the chances are more that you’ll be able to crack a better rent deal. Not just that, you’ll have a proper cooking facility with all the advanced equipment.

Can serve a wider customer base

Another benefit of running a ghost kitchen out of a hotel is that you get to serve a wider customer base. Meaning, your order not only comes from people residing in the locality but also from guests staying in the hotel.

If you have a strategic partnership with the hotel, you can pull this off exactly the way you’re thinking right now.

Now, if you do it successfully and for a good amount of time, this is not just about serving more customers but also about scaling your business.

You can slowly reach out to more and more hotels and start your cooking facilities.

May Get a Helping Hand from the Hotel Staff

Now, this is not a sure-shot advantage; but it might happen if you share a good rapport with the hotel.

There are times when you might not have enough people to deliver in-room dine orders or fulfil room service orders. And during these kinds of scenarios, the hotel can offer you a helping hand by letting some of its staff help you fulfil orders.

Not just that. There are various ways the hotel staff can take that extra mile to support your business. Be it helping you sort your inventory, bring you orders, or cleaning (sometimes at a price).

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