Meet The Entrepreneur Whose Ghost Kitchen For Hotels Just Raised $15 Million
/When Premtim Gjonbalic was 23 years old and operating a restaurant, he saw the inefficiency in the hotel market in regard to the food offerings and the in-room dining experience. A son of Albanian immigrants from Montenegro who moved to New York in the early nineties, he grew up in the back of the kitchen. His father worked a myriad of restaurant related jobs before opening his first eatery, where Gjonbalic worked as a busboy, food delivery, and later a manager.
What Gjonbalic noticed was that hotels were actually losing money on room service, due to high labor costs and inconsistent order volumes, yet they needed these amenities as they qualified them additional stars.
“They were losing money because there was no benefit to scale for them. You had a 150 room hotel that had a full staff, 7 days a week, 3 shifts a day, selling a product that is disposable,” Gjonbalic says. “They had created a monster that where it was not advantageous to not have because they could not sell corporate groups with inclusive breakfast, and if they did have it, they were losing a lot of money.”
The company operates from four such hotel restaurants in New York, delivering food and other room service amenities to 119 hotels and a total of over 30,000 rooms. Among its clients, Butler Hospitality counts hotels like Hilton, Marriott, Hampton Inn, and Holiday Inn.
Gjonbalic says that the company has doubled the room count it serves year over year, ending the year with 250 employees (all of whom are full-time). Butler Hospitality currently operates in New York City, but it is growing to three additional markets this year: Chicago, Miami and D.C.
The company operates as a B2B2C model, with hotel customers ordering directly through Butler, and the hotel collecting payments at the front desk through the folio. Butler Hospitality receives 90% of the revenue with 10% going to the respective hotel.
Though the investment comes at a difficult time for the hospitality and tourism industries as Covid-19 has had a decimating effect, Gjonbalic is hopeful that hotels and in-room service won’t lose their charm, as soon the industries recover.
Following the initial $5 million seed round in 2018, the total amount of equity financing in the company has grown to just over $20 million.
“Hotel guests were stuck ordering club sandwiches and chicken tenders because they thought the hotel service would take too long and would be very expensive,” Gjonbalic says. “I thought that was unfortunate because in-room dining should be this indulgence feeling. We wanted to make it feel like magic, which is what a hotel is.”
