MIAMI—More boutique hotels are partnering with third-party food and beverage (F&B) to help their bottom line. But is this trend only suitable for the boutique operators, or can larger hotels also benefit?

GlobeSt.com caught up with Ari Tenzer, founder of boutique transactional law firm Tenzer PLLC, to get his thoughts on this and other questions, including the legal challenges involved, in part two of this exclusive interview. You can still read part one: The Economics of Hotel-F&B Tie Ups.

Globest.com: Is this trend of hotels partnering with third-party food and beverage (F&B) provider really something new or has it been done before?

Tenzer: The raw material for the concept has been around for a while. For example, Hard Rock has both hotels and cafés. However, due to various legal and operational issues, they have not been successful to-date in implementing an F&B-driven business model.

GlobeSt.com: Do you foresee the new F&B model being used by larger hotels?

Tenzer: It depends. Too many rooms can make it very hard for an F&B provider to be successful on the hospitality side of things but, from an F&B perspective, it may still work. In most cases, in order for this model to succeed, the F&B provider must be able to run the room service department for a large number of rooms.

GlobeSt.com: What are some of the legal challenges associated with F&B makeovers?

Tenzer: One of the principal challenges is placating the existing hotel operator and making sure everyone is onboard with the idea. Third-party management companies frequently have long-term management agreements giving them exclusive rights on F&B services. Ownership will have to negotiate and likely make concessions in order to convince them to surrender control of the F&B department.

Instant Insights /

Are Hotels Prepared for This Legal Challenge?

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