Hotel Taco Bell

From the Doritos Locos taco to nacho fries to the quesarito, a combination quesadilla burrito, Taco Bell is known for creating new menu items from unique pairings. But its latest idea for a combination may be its most audacious yet—and it has nothing to do with food.

Following the reception to its recently announced pop-up hotel, The Bell Hotel and Resort, which sold out all 70 rooms in just minutes last week, the fourth-largest fast-food chain in the United States wants to be the metaphorical burrito blanket travelers tuck themselves into by partnering on experiential Taco Bell-themed hotels. Pulling it off requires marrying brand marketing, customer service, event management, supply-chain logistics, and more. And yet, experts say, corporate leaders realize that today’s business climate requires more bold and agile moves.

Kent Brown, practice leader for the Supply Chain Center of Expertise at Korn Ferry, says supplying one bathroom in a restaurant and 250 bathrooms in a hotel isn’t simply a matter of more materials, it’s a matter of expanding relationships. “You need people who have relationships to source those items and understand the complexities of that sort of volume,” says Brown.

Taco Bell isn’t the first food company to move into lodging. Hard Rock, Planet Hollywood, and Hooters are among those who have tried before. The Bell Hotel and Resort mirrors those that came before in that it will offer concerts and other live entertainment, a special Taco Bell menu, merchandise, and other experiences to guests over four days starting August 8. The chain is converting the V Palm Springs hotel in California for the temporary lodging.

Nor is Taco Bell the first company to branch out into a new industry—online retailers have moved into grocery store chains and medical insurance, and ride-share services are developing fintech businesses, for example. Indeed, horizontal expansion and brand extensions have replaced vertical integration as the en vogue path to growth.

“There’s a commonality to the customer-service aspect, but different nuances need to be accounted for,” says Brown of the challenge in horizontal expansion.

To be sure, Radhika Papandreou, head of Korn Ferry’s North American Travel, Hospitality, and Leisure practice, says that if Taco Bell’s ambitions extend beyond the occasional pop-up, it will likely need to partner more formally with an established hospitality company. “The key is to marry their expertise around food, brand, and culture with the interactive, experiential expertise hotel staff are trained to bring to clients.”