The revenue in the online food delivery market is expected to reach $137, 596 Million worldwide by 2023 and a recent survey suggests that 67% of the restaurant owners would want to open a cloud kitchen as their next outlet.
COVID-19 has only accelerated the growth of Cloud kitchens. Exclusive Cloud kitchens have started sprouting across bigger cities, to cater to the tech savvy millennials who were in need of budget yet quality meals delivered at short notice. What is interesting to note here is that COVID-19 has triggered a wave of “exclusive cloud models” instead of the model’s popularity coming from sole hasty-conversions of struggling full-service models who wish to stay afloat during COVID.
Right now, when one thinks about Cloud kitchens, you imagine them in an industrial warehouse or a small isolated strip-mall. Large warehouses with low rents are considered ideal, as long as they’re situated within a certain radius around residential areas. The more customized the food is to the area, the better the chances of regular customers, similar to full-fledged restaurants. However, given their stunning efficiency, why not Five Star Hotels?
Understanding that hotel fine dining is going out of style is a hard pill to swallow but cloud kitchens have carved a niche purpose for themselves and their cost-benefit is one that can no-longer be ignored.
One of the most important drivers of F&B in hotels is group demand which has vanished post-COVID 19. Add to that the general growing hesitation with indoor dining, traditional F&B is reduced to an expensive line item with expensive rent and low return. This is particularly dangerous for high-end and boutique independent hotels which already have high operational costs and have fared worse during COVID-19.
Cloud kitchens provide an elegant solution for hotels – rather they re-emphasize local cuisine – even beyond their business benefits. Cloud kitchens contain an implicit element of democratic entry – an aspect that hotel F&B infamously lacks. This aspect of cloud kitchen has immense strategic potential for independent boutique hotels especially.