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Chapter 11, Staying True

When should a hospitality business say no to growth?


When the growth would require lowering the hiring standard, splitting the senior team's attention, or compressing the timeline that produced the existing standard. Those requests sound reasonable one at a time and are almost always corrosive. Say no when the opportunity is calibrated to the market's enthusiasm rather than to what the property is.

Every successful hotel or restaurant eventually gets the call. An investor wants to fund a second property. A developer in another city wants the name. A reviewer suggests a direction, a guest asks for a menu that is not the kitchen’s, a peer wonders aloud why the operator is holding back. Each request is, on its face, reasonable. The people I interviewed who endured for decades had learned to tell which of these requests were useful pressure on the standard and which were corrosive, and to decline the second kind politely and repeatedly.

The clearest test concerns what the growth would require. An expansion that means lowering the hiring standard, or dividing the senior team’s attention across new properties, or shortening the development timeline that produced the current standard, is almost always the corrosive kind. Two or three years later the operator who said yes has an original whose standard has slipped and a second property whose standard never reached the original. The operator who said no has forgone one year’s economics and kept the asset that generated the interest. The trade is easy to see on paper. It is hard to see when the investor is in the room and the term sheet is on the table, which is exactly when the internal compass has to be most reliable.

That compass is the precondition, and it has to be built before the offer arrives. Virgilio Martínez, chef and owner of Central in Lima, described to me how his own relationship to outside judgment changed over his career. He once cared a great deal about reviews. Today much less so.

“The main person who can criticize me is myself.” Virgilio Martínez, chef and owner of Central, Lima

An operator calibrating to the latest review will, by definition, accept whatever direction the next reviewer suggests. An operator calibrating to an internal standard, and to what is fair to the team, has somewhere to stand when the market asks the property to become something it should not.

The cost of saying no is real, and the chapter is honest about it. Rodolfo Guzmán of Boragó in Santiago chose to build a kitchen around indigenous Chilean ingredients at a time when serious dining in Chile looked toward Europe, and he declined every easier version of the restaurant along the way.

“For the first six years, the restaurant was empty. Chileans did not even know we existed, mainly because we were never written about.” Rodolfo Guzmán, chef, Boragó, Santiago

Boragó went on to become one of the highest ranked restaurants in Latin America, and the identity Guzmán refused to compromise during the empty years is now its most durable asset. The restaurant that compromised would have been ignored just as completely, without the reward at the end.

There is a personal cost too, and it is the one that breaks most operators. The reviewer who would have written the glowing piece writes the muted one. The investor walks away at premium terms. The peer gently says they do not understand the restraint. Each of these disappointments would have been avoided by saying yes. The operators whose properties endured absorbed them without retaliating against the property by changing course.

Saying no to growth is different from refusing to evolve. The chef with three consulting offers should take the right one and decline the others. The kitchen should change constantly and incrementally. The discipline is in the selection: yes to what extends the work, no to what dilutes it, with the decision made against what the property is rather than against what the market is excited about this year.

Chapter 11, Staying True, sets out the courage to say no, brand as substance, identity rooted in place, and what the longer path costs and returns.