In LA, a ‘crazy’ F&B concept designed for locals

LOS ANGELES — A unique and aggressive food and beverage play in Los Angeles came from a desire to “crack the code” on an affordable lifestyle hotel.

Level 8 is a 30,000-square-foot indoor and outdoor space that takes up an entire floor of a dual-branded, 36-story and 727-key Moxy and AC Hotel in downtown Los Angeles. It is a collaboration between New York City-based hotel developer Lightstone and Los Angeles-based Houston Hospitality.

“We came up with the idea that if we could design a smaller hotel room and make it efficient, we could get a higher density and charge a lower price,” said Lightstone President Mitchell Hochberg. But that concept came with a catch.

Golden Hour is a rooftop pool deck and rotating carousel bar.

“We felt that the product needed to be enhanced by food and beverage to compensate for the fact that the rooms were smaller… If we gave them food and beverage options within the property, it would make it more accommodating,” he said.

Lightstone first tried this approach with the Moxy Times Square in New York. The company’s relationship with Marriott International encouraged the world’s largest hotel company to bring the Moxy brand from Europe to the U.S. Four more locations from Lightstone in New York followed, along with one in South Beach in Miami.

Los Angeles was always part of the plan, too, but the city is notoriously difficult for development, Hochberg said, and it took almost six years to complete the project. (The hotel opened in April, and Level 8 started its sequential opening in September.)

Hochberg said Lightstone sought a food and beverage play at a scale it had never attempted. The Level 8 concept wasn’t just counting on hotel patrons to drive the revenue but drawing most of its customers from Los Angeles.

Believe it or not, we do not depend on the hotel traffic to be profitable. We roughly expect 75% of the business to be generated outside the hotel.

Mitchell Hochberg

Share this quote

“Believe it or not, we do not depend on the hotel traffic to be profitable. We roughly expect 75% of the business to be generated outside the hotel.

“Our philosophy of this was driven by the fact that we were building a large property in downtown Los Angeles, and we needed to create a differentiating factor for people to stay at the hotel… and also something that would draw people from Los Angeles to help support the food and beverage as well,” he said. 

Developing Level 8

Level 8 is a carve-out from the Marriott agreement (the company is not involved) and is a joint venture between Lightstone and Houston Hospitality. The percentage of the JV and the amount of the investment were not disclosed.

Hochberg said Lightstone searched for years for the right food and beverage partner. The company wanted someone based in Los Angeles.

“We wanted somebody that shared our vision to do a project that was experiential, that was not just a club or restaurant and somebody that liked the idea doing multiple venues instead of one big restaurant or the one big nightclub,” he said.

Mother of Pearl is an al fresco oyster and ceviche bar.

Level 8 includes:

• Mr Wanderlust: A piano and jazz bar
• Golden Hour: A rooftop pool deck and rotating carousel bar
• Sinner y Santos: A nightclub disguised as a 19th-century cathedral
• Maison Kasai: A French-Teppanyaki experience
• Mother of Pearl: An al fresco oyster and ceviche bar
• Qué Bárbaro: A South American live-fire grill
• The Brown Sheep: A food truck serving Mexican street food 
• Lucky Mizu: A Japanese restaurant inspired by cooking with water

Hochberg said the process of creating Level 8 was unlike anything the company had done before. 

“It was an interesting collaboration. The Houston brothers (Mark and Jonnie of Houston Hospitality) themselves are incredibly creative and talented. It was really a true collaboration with us and the two design firms that we brought in,” he said. “It was not the typical design process, where you would work with a design firm, give them a brief, and they would come back with drawings, and you would edit it. It was really more workshops that we did over a period of two years. We would sit in rooms for days at a time and work together.”

Another key draw is Level 8’s location across the street from Crypto.com Arena (where the LA Lakers, Clippers and Kings play) and the Los Angeles Convention Center. 

How to make it profitable

But, make no mistake, Hochberg said Level 8 is helping the hotel business, too.

“The early indications are that it will be very significant and meaningful to both our top line and bottom line. We did it because we thought it would be, and we’re already seeing the results of it,” he said.

Sinner y Santos is a nightclub disguised as a 19th-century cathedral

“The primary driver of food and beverage in our hotels is for us to drive RevPAR. We didn’t do it to have a standalone food and beverage experience. [We thought] how do we get more people to stay in the hotel? And how do we get people willing to pay a higher rate by virtue of the totality of experiences we’re going to give them?”

So how does this concept pencil profitable?

“So far, it’s only worked on paper… We had to be a little crazy and daring to do it because it’s a first instance,” Hochberg said. “But we’re not afraid of being a groundbreaker and doing something new, nor are our partners (Houston Hospitality) because if you look at most of what they’ve done throughout their career it has always been something new and different.”

Hochberg said he expects the hotel and the restaurant to be profitable in the first 12 months. “The issue is going to be how profitable and how they ramp up,” he said.

Making F&B efficient

So far, there have been many early successes and lots of group sales, including two big buyouts of the entire 8th floor.

“That’s something that nobody else can do in LA,” Hochberg said. 

To make the concept work, they had to build many efficiencies.

The Brown Sheep is a food truck serving Mexican street food.

“The critical part of this is how to create unique destinations, but take advantage of the critical mass to have efficiencies. If you run it as eight separate destinations, it would be very difficult to be profitable,” Hochberg said. “We spent a lot of time thinking about that. For example, we have one big kitchen, and most of the food comes out of that single kitchen with an executive chef who works with the chefs of each of the restaurants to prepare, create and purchase the food. That’s done as if it’s one large restaurant.”

But because they were going for experiential, most of the cooking is done at the restaurants. “We’ve tried to be very creative and efficient in the operating model to take advantage of the scale while leaving the individuality of the restaurants from the guest-facing perspective,” Hochberg added.

There’s also been a significant PR campaign. “I don’t have data yet. But clearly, part of the marketing effort is to ensure we get the information to the guests, particularly pre-arrival, so they know their options.

“One of the things that we have been challenged with is making sure they know about it ahead of time so they can book a reservation. The worst problem you could have (and this happens in New York) is that the guest gets to the hotel and wants to go to the venues, and they find out [they] are sold out.”

While food and beverage will be part of any future hospitality expansion for Lightstone, Hochberg said he doesn’t think a concept like Level 8 is necessarily transferrable to other markets.

“I don’t think there’ll be anything as ambitious as LA because I don’t think there’s another city — other than New York — that can absorb the scale,” he said. “And we have already saturated New York.”

Hochberg said Level 8’s opening has “exceeded our expectations.”

“But now we have to run it. And we’ll have to see if all of the exposure and all the people coming continues,” he said. “Because what we don’t want to be is just an occasion place, right? That’s the worst thing that can happen to a restaurant. You want people — particularly the locals — to come back.”