More often than not, ordering room service is the last resort for a number of reasons; namely due to poor food quality and inefficient service, which results in hotels losing out on a significant amount of revenue from captivated guests staying at their properties. Butler Hospitality is the turn-key solution that transforms the hotel dining experience though its cloud kitchen for hotels. Butler Hospitality takes over the operation of kitchens inside hotels, controlling everything from menu design to billing, and prepares high-quality meals that are delivered by full-time, uniformed “Butlers” to guests at the property and to nearby hotels within 30 minutes. The meals can be billed to the guest’s hotel room and the hotel no longer needs to worry about managing in-house dining. Properties that have no room service options now can create an additional revenue stream. Butler also offers the Managed by Butler full-service solution that helps hotels operate and manage their on-site restaurants.
AlleyWatch caught up with CEO and Founder Tim Gjonbalic to learn more about Butler’s service and the pain points that it addresses. Butler is available in a number of fine NYC hotels and plans to expand to Miami, Chicago, and Washington D.C.
Who were your investors and how much did you raise?
Butler Hospitality raised $15M in Series A funding from &vest, Scopus Ventures, Mousse Partners, Kraft Group, Loeb.nyc, and others.
Tell us about the product or service that Butler Hospitality offers.
Butler Hospitality is the first cloud kitchen for hotels. Butler takes over restaurants inside of hotels and transforms them into delivery hubs that provide virtual room service and catering to nearby hotels.
Unlike other delivery providers, Butler is the only company that integrates with property systems to deliver directly to the hotel guest’s door and bills directly to the room. Butler delivers room service, not takeout.
Butler controls the entire in-room dining experience from menu design, food preparation, delivery, to billing. Butler creates elevated, accessible luxury food specifically designed for hotel delivery. Our full-time, uniformed Butlers deliver within thirty minutes after the guest places their order via our custom websites or by calling our dedicated guest experience team.
Butler benefits every stakeholder in the hospitality industry – guests get great food delivered directly to their rooms and billed through their hotel, managers are freed from F&B operations to focus on “heads in beds”, brands see increased guest satisfaction and hotel ratings, and owners see increased occupancy and higher cap rates.
What inspired the start of Butler Hospitality?
I grew up working in my family’s restaurant where I learned first-hand the intricacies of restaurant management. After launching a restaurant group inside of Manhattan hotels, I quickly identified the inefficiencies of hotel F&B. Despite being an essential service for lucrative business travelers, most hotel restaurants lose money. I knew there must be a way to make foodservice amazing for the guest and profitable for the hotel and that is how Butler Hospitality was born.
What market does Butler Hospitality target and how big is it?
STR estimated total U.S. F&B revenues of $40B.
What’s your business model?
Butler’s business model is fundamentally based on kitchen utilization. Butler takes over restaurants inside of centrally located hotels and uses them to fulfill the room service and catering requirements of dozens of nearby hotels. By controlling the entire experience from menu design, food preparation, delivery, and billing with its proprietary ordering and dispatch technology, Butler transforms traditionally loss-leading hotel restaurants into massively profitable cloud kitchens.
With Managed by Butler, full-service hotel managers rely on Butler to operate their existing restaurants. Butler assumes all F&B operations including staffing, procurement, logistics, and in-room dining. Because most hotel restaurants are loss leaders, Managed by Butler instantly eliminates costs and creates new revenue for full-service hotels.
With Room Service by Butler, limited- and select-service hotels managers rely on Butler to provide their guests with all the F&B benefits of a full-service hotel. Guests order room service via phone, web, or text to be prepared in a nearby Managed by Butler hotel and delivered within 30 minutes. Unlike other delivery providers, Butler delivers directly to the room and bills directly to the room with no service fees.
How has COVID-19 impacted the business?
Butler is extremely sensitive to the impact of COVID-19 on the hospitality industry. We pivoted quickly after the lockdown in New York City to support the needs of first responders, traveling medical personnel, and military staff staying in our partner hotels. We developed a new contactless delivery protocol and reviewed all of our food preparation and packaging standards to comply with evolving health and wellness standards. In order to qualify for Federal and state contracts, hotels must be able to feed their guests. We are grateful to learn that many of our hotel partners would not have been able to win these contracts without our service.
What was the funding process like?
We’re solving a large problem on both the hotel and guest side of things. Investors realized that and wanted to join our mission.
What are the biggest challenges that you faced while raising capital?
Our industry has been largely affected by COVID and uncertainty was high.
What factors about your business led your investors to write the check?
Our ability to adapt and continue to expand our portfolio of properties.
What are the milestones you plan to achieve in the next six months?
In the next six months, we’ll be expanding to Miami, Chicago, and Washington D.C.
In the next six months, we’ll be expanding to Miami, Chicago, and Washington D.C.
As we grow, we’ll also be employing kitchen staff in each of these new cities helping to bring jobs to four new cities and grow their economies.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Stay offensive and defensive at the same time.
Where do you see the company going now over the near term?
Continued growth to meet our partners in new markets.
What’s your favorite outdoor dining restaurant in NYC
Allora Ristorante. (Family-Owned)
