How Cloud Kitchens Are Reinventing Hotel Room Service, As A Service

Putting the “hospital” in Butler Hospitality, the New York-based hotel room service startup found itself this past spring in a city overrun by frontline workers of every description, setting up field hospitals in Manhattan’s most famous greenspaces as medical ships anchored.

Tim Gjonbalic, founder and CEO of Butler, did what any conscientious hotelier, caterer or restauranteur would do: He started feeding them. As Federal Emergency Management Agency (FEMA) officials and National Guard contingents settled into hotels in Butler’s client portfolio, his ghost kitchens cranked out and donated “just north of 175,000 meals,” Gjonbalic told PYMNTS’ Karen Webster in a recent chat.

The concept is just this side of brilliant. Room service is a must-have for hotels, but the quality of food and experience tend to be wildly uneven — and expensive. It’s a bear to manage profitably, and room service as we know it is also way out of step with post-pandemic routines.

“Food and beverage [F&B] … has continuously been a pain point for hoteliers,” Gjonbalic told Webster. “They have a model called ‘heads in beds.’ That’s the business. And instead of trying to really kind of figure out food, they’ve gone through probably three decades of just highly discouraging the amenities.”

Not to mention trays of half-eaten burgers left in hallways.

As any room service devotee will attest, it’s a sad state of affairs for a wonderful thing.

The Butler Did It

Overpriced room service that we know in our hearts will be stale on arrival is its own worst enemy, and certainly not doing any favors for hotels as utilization decays — along with profit.

Given these conditions, Gjonbalic said, “Hotels look at room service as a loss leader, whereas I see it as an underutilized asset.”

That led him to looking for clusters of market density where he could take over the kitchen of one hotel and provide turnkey room service to other hotels within a delivery zone.

“We provide a really solid food experience through packaging, menu design, local sourcing and really kind of being a partner to the guest,” he said.

Not lost on Gjonbalic is the ubiquitous demand for better customer experiences, which is at the heart of Butler Hospitality’s service.

“Everyone’s trying to move away from the amenities now,” he said. “So, what’s a hotel then? What is the experience? It’s the points and four walls. We want to think about in-room hospitality, and we want to just focus on that experience.”

Tracking guest preferences for deep personalization, digitizing things like paper breakfast vouchers, offering order by text, texting guests with reminders about F&B options are all core features of the Butler Hospitality platform.

Gjonbalic uses the example of the business traveler who texts ahead from the airport to have a burger waiting when they check in and knowing how that person likes their burger served.

Room Service as-a-Service

Not a fan of the “grab-n-go” self-serve pantry trend that’s replaced full-service dining in many hotels, Gjonbalic observed that, “Hotels haven’t been able to figure out in-room dining or F&B as a whole in terms of how to provide personalization.”

Considering how much hotels know (or should know) about their guests, “We can do better. I guess it just hasn’t been a focus,” he said.

Butler provides essentially an end-to-end service, with pre-arrival emails, mentions of the service in check-in verbiage, signage in elevators, and special menus in rooms. It’s an omnichannel experience in that a guest can begin an order on the phone and finish it via text.

When a guest calls “room service” perhaps to add to their order, the call is routed directly to Butler, not the hotel’s harried front desk.

“They’re not transferring it in any way,” he said. “We’re directly integrated. You call us, we take your order, we make sure you have your bottle of water, we make sure you get your cutlery and that we’re meeting your expectations. Then, within 30 minutes, we’ll knock three times on the door, say ‘room service,’ hand over the bag, and get a digital signature at the door.”

Butler delivery associates are uniformed.

Partnerships help Butler out when expertise is needed. Rather than reinvent the bagel, Gjonbalic teamed up with legendary Manhattan bakers Ess-a-Bagel to offer their famous flavor. Ditto deep dish pizza in Chicago and other local alliances with beloved brands in major metropolises.

This is all a challenge, of course, with the travel sector decimated, the pandemic flaring up, and some even saying that the days of the business-traveling road warrior are seeing their last.

“Travel is low, occupancy is low, and it’s going to be that way for a little while,” Gjonbalic told Webster. “Some of the revenue drivers like conferences and sporting events are going to take a big hit, at least for the next 12 to 18 months. So, the way that I see it, we have an opportunity to continue to expand into markets where our hotel partners and owners are hurting.”

Meanwhile, Butler is using any spare time to perfect its packaging, delivery and service.

“The smart brands of the future will look to third parties to build these experiences,” Gjonbalic said.