00:00Let's talk about the fine dining space, where a lot of people associate Union Square Hospitality with that.
00:05Are you seeing a little bit more resiliency with regards to not just foot traffic, but what people are actually
00:10spending in the restaurant?
00:11Without question. It's the strongest segment of the business that we have for Union Square Hospitality Group.
00:18Our businesses like Gramercy, like Union Square Cafe, and more recently, Manhattan,
00:24are seeing sales lift as well as increase in event business specifically, which is great news.
00:31And the event business is driven by both business and social.
00:35So all of our businesses, generally speaking, are seeing uptick in revenue.
00:39Same restaurant sales are up, and then it's driven in large part by the event business.
00:44With regards to the event business, is that primarily corporate customers or is individuals getting married or doing whatever?
00:51Yeah, it's a little bit of both. So it's about a 50-50 split.
00:55As you would imagine, Monday through Thursday is big corporate events.
00:59And then on the weekends, you have wedding, bar mitzvahs, et cetera, that drive the social part of our business.
01:06And I don't know if daily provisions counts as fine dining, but boy, do I love daily provisions.
01:11It's a great place to get like an egg and cheese on a roll, but a little bit elevated there.
01:16One recently opened up on the Upper East Side, and then I moved out, so I missed it.
01:21Have they not had one in Hoboken yet?
01:22They don't have one in Hoboken.
01:23Okay, well, you should talk to the CEO. He's right here.
01:25Well, then I was going to ask, tell me about your expansion plans there when it comes to daily provisions
01:30and the footprint that you have.
01:31So we call daily provisions fine casual, so it operates in the space of fine casual.
01:36We have 12 today, including more recently one inside the new J.P. Morgan headquarters, right?
01:43And that restaurant is performing exceptionally well.
01:47It's just for the clients and the employees that work at J.P. Morgan, and it's a different model.
01:52And Katie Greifeld.
01:53Yeah.
01:53She said put it in there.
01:55I have to ask, I mean, how did that come to be?
01:57I, you know, have actually spent some time in the J.P. Morgan headquarters.
02:01And like you said, I mean, you only have 12 stores or so.
02:04So, I mean, how did it come to be that one of them is in J.P. Morgan's new headquarters?
02:09It really came from a really strong relationship that we have with J.P. Morgan and our partners at Restaurant
02:14Associates.
02:15So we played an instrumental role in helping to design all of the F&B programming at the headquarters.
02:22And as part of that, we said, wouldn't it be great?
02:25And Jamie said, wouldn't it be great to have daily provisions inside their offices?
02:30So it's Monday through Friday, basically 7 to 6 every single day.
02:35And, again, it's performing exceptionally well.
02:38I do want to talk about your expansion plans.
02:40I mean, look, opening up in the J.P. Morgan building is pretty low risk, I would think,
02:43given the clientele you would have there.
02:45But you've been expanding into other cities as well.
02:47And you've got a couple of projects underway.
02:49Talk a little bit about that process and also just, I guess, some of the challenges that you've had to
02:54sort of face
02:55in order to make sure that things get up and running smoothly.
02:57Sure. We're very excited about daily provisions.
03:00Again, 12 cafes today.
03:03We'll open three this year, including two in Boston.
03:09And we're going to build out in the D.C. market.
03:11So we're growing at a modest pace.
03:16And we're growing where it makes sense from human resources, from a tech, and from an operations perspective.
03:24So scale matters.
03:25But I never want to grow faster than the human resource talent that we have on board.
03:31Well, that's what I'm curious about is how far you want to go.
03:33And for the viewers that don't know, I mean, Union Square, of course, founded by Danny Meyer.
03:37You effectively took over for him, at least in terms of day-to-day operations of the business.
03:42And you have kind of pushed us beyond New York City into other markets.
03:47I know you're supposed to open up something later this year in Detroit.
03:50I mean, how much further do you want to take it?
03:53I would say we, again, we never want to outgrow what our human capacity can handle.
04:01And so we've grown a lot of with regard to daily provisions last year and three this year.
04:07It's likely that we're going to pause, just slow it down a little bit so that we can capture the
04:12learnings.
04:13Entering a new market comes with new challenges.
04:16Is the brand going to be received well in a new community?
04:19And we're going to keep learning a lot.
04:22And so 20 this year, we'll open three daily provisions.
04:26And then we need to continue to learn from our workforce and from our guests about the particular brand.
04:32The fine dining will grow slower, right?
04:35I really want to make sure that our capacity, because it takes a lot of work to open a fine
04:41dining restaurant.
04:42You're hiring executive chefs, master SOMs.
04:45These are really big, important roles.
04:48And what's really important to us is that we deliver on enlightened hospitality wherever we open our restaurants.
04:55Just one last point on daily provisions.
04:57There is a lot of great real estate on Washington Street in Hoboken, New Jersey.
05:01But I hear what you're saying that, you know, you don't want to grow faster than your human resources.
05:06And that brings me to AI, because that has been one of the conversations.
05:10It's how we've we opened the show today was what could AI mean for productivity when it comes to the
05:17labor market?
05:17And I wonder what that means in your industry, whether that's something you see as realistic in a realistic time
05:23frame.
05:24So we're knee-deep in understanding AI.
05:28We've been at this over the past year.
05:31We're a fantastic chief technology officer who has really rolled up our sleeves to better understand how we can deploy
05:38AI.
05:39Where it's going to come to life in our space is really at the home office.
05:44At, you know, whether it's finance, whether it's the legal, whether it's marketing, first to use AI to solve some
05:51of the issues and bottlenecks that are happening at the corporate office, our home office.
05:56Less about the restaurants.
05:58Now, we're going to gain some efficiencies by deploying some of the AI models to help us for menu, menu
06:06design, layout, and pricing.
06:08So that will have an impact for the within the four walls of the restaurant.
06:12But first, I see integration at the home office.
06:14Just real quickly, I mean, how much are you using data to sort of track what your customers are buying,
06:19what they're not buying?
06:20Is I assume that's got to be a part of the business?
06:22It's a big part of it and is absolutely critical.
06:24And we want to be able to use the data to influence the guest's experience and the hospitality experience.
06:31And we're starting to get data that on our most loyal repeat guests that says, for example, Chip likes bourbon
06:38and he likes a specific bourbon.
06:40So when the server approaches the table, she knows your name.
06:44She knows the frequency of which you've dined at our restaurants.
06:47So she doesn't ask you whether you want red wine or white wine.
06:51She knows your preference on bourbon.
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