Business

The hotel industry is renting its empty kitchens to restaurateurs hunting for cut-rate space.


The hotel industry, where occupancy rates are still down 30 percent from a year ago, is getting in on the ghost kitchen trend.

Ghost kitchens, also called digital kitchens, are cooking facilities that produce food only for delivery or takeout. Demand for the concept is booming, Debra Kamin reports in The New York Times.

The pandemic has opened the business model to more entrepreneurs. To turn his chicken cutlet sandwich concept into a business, Richard Zaro started renting space in July at the Four Points by Sheraton Midtown near Times Square, paying $6,000 a month for a fully outfitted catering kitchen. Average restaurant start-up costs for brick-and-mortar locations, in comparison, can run from $200,000 to more than $1 million.

Within four months, he had generated enough revenue — and created a large enough base of loyal customers — to move to a stand-alone location. His new business, Cutlets, opened in a former Tender Greens restaurant near Gramercy Park on Dec. 1, and has plans to expand.

Mr. Zaro found his rented kitchen space through Use Kitch, an online commercial kitchen marketplace that likens itself to an Airbnb for the restaurant industry.

Testing from a base at a Times Square hotel was the ultimate risk reduction, Mr. Zaro said, adding that the hotel benefited, too: “It was nice for them to have incoming revenue.”

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