Using restaurant staffing as an asset strategy

INTERNATIONAL REPORT — In the competitive landscape of hotel investment, labor is often perceived as a challenge to manage rather than a strategic asset to leverage. Nowhere is this more evident than in hotel-operated restaurants, where staffing decisions are frequently dictated by rigid cost controls rather than a thoughtful alignment with demand, concept, and guest expectations. 

The current approach often leads to a damaging cycle: labor is trimmed to safeguard margins, leading to decreased service quality, which then results in plummeting revenue. Operators, in turn, feel compelled to make further cuts, perpetuating the cycle. This mindset needs to shift. For owners, investors, and asset managers, restaurant staffing should be viewed not as a liability to minimize but as a strategic resource—one that can drive revenue, stabilize operations, and safeguard brand integrity.

The misalignment problem

Hotel restaurants function under different circumstances compared to standalone dining establishments. They cater to diverse audiences — overnight guests, group business, and local diners — across various meal periods, often with extended hours and fluctuating demand. The challenge arises when staffing models are borrowed from traditional hotel frameworks or measured against generic labor percentages, which fail to capture these unique dynamics.

This misalignment manifests in several predictable patterns:

• Over-staffing during low-demand periods: High labor costs during quiet times can erode profit margins.
• Under-staffing during peak service: Insufficient staff during busy times leads to poor guest experiences and lost revenue.
• Inconsistent execution across dayparts: Fluctuating quality of service affects brand reputation.

The core issue is that staffing decisions are made around business hours rather than sales patterns. Effective staffing must be assessed through three critical lenses: concept, quality, and meal period dynamics. Without this alignment, labor is rarely optimized, resulting in excess or inadequacy.

Concept dictates labor

Each restaurant concept carries its own unique labor profile. Quick-service models emphasize speed and standardization. Fine dining relies on layered service, extensive training, and a visible staff presence. Casual outlets sit somewhere in between.

Hotel restaurants often operate as hybrids, starting with breakfast buffets, transitioning to casual lunch service, and evolving into dinner menus. This complexity necessitates a nuanced approach to staffing. Unfortunately, labor is frequently managed in bulk, leading to indiscriminate reductions instead of tailored staffing solutions based on specific service needs. 

For instance, a buffet does not require the same staff-to-guest ratio as a fine dining restaurant. Applying generic staffing expectations to diverse service formats creates inefficiencies, resulting in overpayments during certain periods and under delivery in others.

Quality is a staffing decision

While quality is typically associated with food, it is fundamentally delivered through labor. Service timing, guest interaction and coordination between front and back of house are all labor-dependent.

In a hotel environment, quality expectations shift dramatically by occasion. A guest grabbing breakfast before an early meeting prioritizes speed, while the same guest at dinner may expect attentiveness and personalized service.

When labor is indiscriminately reduced, the first elements to vanish are often the “invisible” aspects: training, managerial oversight, and communication. Though these elements do not appear directly in labor productivity metrics, they are crucial for maintaining consistency and overall guest satisfaction. As such, quality must be operationalized into service standards that directly inform staffing decisions.

Navigating all-day dining complexity

Hotel restaurants rarely operate within a single daypart. Each meal period brings distinct demand patterns and labor requirements.

Breakfast is typically high-margin but operationally fragile, with early call times and limited staffing buffers. Lunch is fast-paced but inconsistent. Dinner is the primary revenue driver, requiring more specialized staff and stronger floor leadership. Late-night service can quickly become unprofitable if not aligned with actual demand.

The key principle here is that staffing should follow revenue, not hours of operation.

The difference between inefficient and effective scheduling often lies in structural decisions. Non-staggered shifts create unnecessary labor during slow periods, while gaps in coverage during peak demand stifle revenue potential. In contrast, staggered schedules, cross-utilized roles, and targeted manager presence ensure that labor supports revenue rather than sitting idle.

The risk of over-control

While many operators resort to labor cuts to enhance margins, this often leads to long-term risks that are difficult to quantify but potentially damaging. Reduced staffing can limit reservation availability, slow service, and create inconsistencies. Over time, this erodes guest satisfaction, depresses revenue, and undermines brand positioning. 

There are clear warning signs when labor has been cut too far: closed sections despite demand, simplified menus due to lack of capacity, and the absence of pre-shift communication. These are not just operational compromises: they are revenue constraints.

The “cutting your way to profit” mentality fosters a downward spiral: diminished service leads to reduced demand, justifying further cuts. Moreover, reduced staffing can negatively impact employee morale, leading to burnout and higher turnover rates, offsetting any perceived savings.

From cost center to strategic lever

Reframing restaurant staffing as an asset strategy requires a shift in mindset. Instead of asking, “How do we reduce labor?” the more effective question is, “How do we deploy labor to maximize returns?”

This involves:

• Aligning staffing with concept and guest expectations.
• Building schedules around sales patterns, not operating hours.
• Measuring performance through revenue per labor hour.
• Using cross-training strategically without diluting expertise.
• Ensuring managers have time to lead, train, and maintain service standards.

Recognizing that labor is a crucial driver of revenue is essential. A well-staffed dining area can accommodate more guests, efficiently turn tables, and deliver consistent experiences, outperforming a lean operation that severely limits demand.

For asset managers, the focus should be on challenging existing assumptions rather than dictating staffing levels. Are staffing decisions rooted in habit or data? Are margins being protected at the expense of revenue? Are the right metrics being measured?

A sustainable path forward

Hotel restaurants face structural complexity, but these challenges also present opportunities. By moving beyond one-size-fits-all labor controls and adopting a strategic approach, owners and operators can unlock significant value.

The goal isn’t merely to increase labor spending but to invest smarter. When staffing aligns with concept, quality, and demand, it transforms from a burden into a vital component of performance. 

Given the rising expectations of guests and the tightening of margins, this paradigm shift is essential for the future of hotel dining. By embracing staffing as a strategic asset, the industry can thrive in an increasingly competitive landscape. 

Aria Dorsey is founder of Corner Booth Hospitality, which collaborates with Six Senses, Belmond, and Four Seasons, as well as independent restaurants like Bad Idea and Café Mars.

Note: The following contributed perspective was submitted through ISHC.

The views and opinions expressed in this column do not necessarily reflect the opinions of Hotel Investment Today or Northstar Travel Group and its affiliated companies.