Use PR for openings, chef changes, award campaigns, reputation repair, and broad narratives. If nobody knows the story, coverage is the bottleneck and PR is the right spend.
Use performance marketing when the story is fine but the numbers are not: inconsistent covers, private dining dates going unfilled, ad spend nobody can tie to bookings, a hotel leaning on commission channels for demand it could own. The defining trait of this category is accountable monthly reporting: reservations, covers, calls, event leads, and direct bookings attributed to spend, with the actual search terms the budget bought visible to the owner.
Use both when awareness and capture have to work together: a new property that needs press and needs the resulting demand caught, measured, and converted. Sequence matters; running both from day one usually just doubles the invoices.
A useful test for any agency in any category: ask what one booked private event, one filled dining room, or one direct hotel booking is worth to you, and whether their reporting will show you that number monthly. A PR firm will rightly say that is not their job. A performance firm that cannot answer it is not one.