Hotel-hostel chainlets lead with their food and drink offerings

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Mama Shelter generates most of its revenue from food and beverage operations. Pictured, the restaurant at its Los Angeles hotel.
Mama Shelter generates most of its revenue from food and beverage operations. Pictured, the restaurant at its Los Angeles hotel.

Foodies at the Exchange, the restaurant in the Freehand Los Angeles hotel-hostel, will pony up $46 for chraime, a Sephardic Jewish dish with prawns, squid and mussels. And if a food coma should set in, they can pay less than $60 for a bed in a shared room.

The high-brow/budget-conscious hybrid is an unusual model for traditional hotels, but the approach is fueling steady growth at two urban-oriented chainlets that are combining acclaimed restaurants and bars with stylish but sparse rooms that compete with some midscale hotels on price.

A Freehand competitor, Paris-based Mama Shelter, whose first property debuted in its home city in 2008, opened a 125-room hotel in Belgrade, Serbia, last month and will unveil a 238-room hotel in Prague, Czech Republic, in May.

Having tapped Michelin-starred French chef Guy Savoy as a consultant, Mama Shelter operates all of the restaurants and bars in its seven properties. In an industry where full-service hotels generate about 30% of their annual revenue from food and beverage sales, 52% of the company's $62 million in annual revenue is from its restaurants and bars, according to co-founder Jeremie Trigano.

Mama Shelter, whose investors include AccorHotels, pays commissions on agent bookings.

Meanwhile, New York's Sydell Group, whose properties include the Big Apple's NoMad Hotel, debuted its Freehand hotel-hostel hybrid concept -- 258 beds in 80 rooms -- in Miami in 2012, then added a Chicago property in 2015. The Freehand Los Angeles opened last June with 167 private rooms and 59 shared rooms, while the Freehand New York opened in January.

Beyond their whimsical designs, both Freehand and Mama Shelter hotels have come to be known for their restaurants and bars.

The rooftop bar at Mama Shelter's Los Angeles outpost, which opened in Hollywood in 2015, was tapped the following year by LA Weekly as the city's Best Rooftop Bar. The Freehand Miami's Broken Shaker cocktail bar and lounge was listed among Esquire's 24 best bars in the U.S. last year, and the Freehand Los Angeles' Exchange, which offers Israeli, Mexican and Asian cuisines, was listed in 2017 as Eater LA's readers' choice for Most Gorgeous Restaurant of the Year.

Freehand and Mama Shelter appear to be turning hotels' traditional food and beverage model on its head. While many full-service hotels grapple with cash-burning room service operations and minibars, the two chainlets have largely eschewed those amenities, though Mama Shelter has vending machines at its properties, and instead have made their restaurants and bars a focal point.

For example, the Freehand Miami's Broken Shaker was conceptualized by restaurant and bar consultants Bar Lab as a pop-up bar. It has since become a permanent fixture and spawned Broken Shaker lounges at the Freehands in Chicago and Los Angeles. Trigano said Mama Shelter executives consult with Savoy approximately every three weeks to tweak the company's menus worldwide.

"We wouldn't outsource our food and beverage for a million dollars," said Trigano, whose father and Mama Shelter co-founder, Serge Trigano, was formerly CEO of Club Med.

He added that the restaurant's popularity has helped secure additional locations.

"We really manage to make money where other brands with big lobbies and cafeterias for breakfast don't," he said.

As for Freehand's future, Sydell Group said recently there were no plans for additional properties.

Having opened in New York at what was previously the George Washington Hotel, the 395-room Freehand New York is both the chain's largest property and its only one without shared rooms. The hotel also features food-and-beverage operations overseen by New York-based neighborhood-restaurant specialist Gabriel Stulman (Jeffrey's Grocery, Joseph Leonard).

Mama Shelter, on the other hand, is scheduled to add a property in Toulouse, France, later this year, and next year will open hotels in Lisbon and London as well as a second Paris location. The company is also in discussions to convert an existing hotel in Washington into its second U.S. location.

Either way, both chains will attempt to stick with moderate room-pricing models, even as their restaurants attract a more affluent clientele. As of last week, late-May weekend rates at the Freehand New York were starting at less than $300 a night, which is reasonable by Manhattan standards.

Mama Shelter's Trigano is also vowing to keep room rates down, listing lifestyle chains like the Ace or Marriott's newer Moxy brand as potential competitors.

"I would say we're cheap relative to so-called lifestyle brands," Trigano said. "We're a budget hotel at the end of the day."

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