How Gerber Group Changed Hotel Bars in 23 Locations

The CEO of a group that runs hotel bars credits experience and great relationships for the company's growth.
April 26, 2012

Gerber Group CEO Scott Gerber says his company changed the concept of hotel bars when its first bar opened 21 years ago at the Paramount Hotel in New York City. Since then, the company has grown, doing business in 23 locations under several hotel brands.

The company is still growing, with plans to open at least another two properties by the end of the year. And Gerber is working on deals for another three to five in the next several years in new markets like Toronto and Panama City.

Along the way, Gerber has learned some valuable lessons about developing a brand and running a business.

Regard the Customer as King

Gerber believes that the sheer amount of time they’ve spent in the industry gives the group a huge advantage over their competitors. They know what customers are looking for.

All bars, whether they are in a hotel or operate as a separate entity, sell essentially the same thing. Gerber differentiates his brand by focusing on the customer experience. He pays attention to the smallest details, from the design of the room to the volume of the music. Senior managers travel extensively to make sure that each location is up to standard.

That starts with doing your research. With locations in New York City, Chicago, New Orleans and Santiago, Chile, Gerber knows that each market has different needs.

“We understand what the hotel guests, the locals and the tourists are looking for,” says Gerber. “Our different environments cater to the desires of our customers.”

Break the Status Quo

Gerber says before the group opened its first bar at the Paramount, hotel bars and dining rooms were mostly for the guests. They weren’t very interesting places to hang out. Without any experience in the hotel business, Gerber opened up the business to the local residents.

“We created this cool hotel bar that was not just [for] tourists,” says Gerber. “A lot of locals [came in]. I think people saw that as a great business model, not only because we made a lot of money but also because we had great press. We really made that hotel a little bit different.”

As a result, hotels started asking the group to revamp the food and beverage experience at their properties. Many hotels were losing money when they tried to operate it themselves.

Cultivate Great Relationships

Gerber Group operates independently from the hotels where they're located, but the guests don't realize that. That’s because Gerber and his team treasure their relationships with the hotel brands they partner with.

“Although we’re a third party, we don’t act like a third party,” says Gerber. “We act as a department of the hotel when it comes to the hotel guest. So, if you come down to my bar and complain about your room, our bartender should never say to you, 'that’s not my problem, we’re not the hotel.'”

Maintaining those relationships also means knowing “how to play in the sandbox,” says Gerber.

“We don’t do whatever we can just to increase our business. We have to always be respectful of the hotel. And I think that the hotel partners respect the way we operate our business. They respect our relationships—the way we listen to them, the way we listen to their general managers—and they can trust us.”

Consequently, Gerber has increased its business exponentially as hotel brands continue to turn over locations to let the company come in and work its magic.

Photo credit: Red2One