Staying guests do not always eat in their hotel restaurants but sometimes go out to eat, while residents of a town do not always eat at free-standing restaurants but go to hotels to eat. People choose where to eat, based on their objectives, value-for-money and the relative strengths of the two categories of restaurant. These are quality, stability and the convenience of the other hotel facilities for hotel restaurants, and casualness, character and media exposure for free-standing restaurants.
Hotels choose between self managing or outsourcing restaurants or not having restaurants on the premises at all, based on the four reasons why they may have in-house restaurants: the principle of being able to provide 3 meals, the profit that can be made, the contribution to the hotel and the pleasure to be derived from operating the restaurants.
The number of hotel restaurants may decrease as the market matures, however the demand for hotel restaurants will certainly remain and, as long as the demand exists, suppliers will continue to exist and survive in competition with free-standing restaurants.
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