Hotel F&B Study: The State of the Industry

Every day, we talk with hoteliers about what’s working, what’s not, and generally what’s going on in hotel F&B in their worlds. Overall, their pulse is pumping to the beat of good business. But we decided to dig a little deeper and get a bit more granular, beyond the anecdotes to the metrics of hotel F&B.

What we learned from you about the current condition of the industry.

In April of this year, Hotel F&B conducted its first-ever State of the Industry Study. Our goal: to better understand the perceptions and overall state of the foodservice/hospitality industry among our subscribers. Among the insight we endeavored to find, we sought a deeper knowledge of the range of amenities our subscribers offer inhouse, what kinds of technology they are adopting, what types of products and equipment they are likely to buy in the next 12 months, which foodservice-related areas are generating the most revenue at hotel properties, and how subscriber hotels select and work with their foodservice suppliers.

Our respondents were mostly hotels that offer full-service F&B—i.e., they have at least one restaurant on-property. We found that 76% of respondents own or manage more than one property, with an average number of 376 corporate/social meetings or events held per property per year. And their average number of restaurants, bars, or buffets per property was 3.7.

On average, over half of respondents’ companies own or manage up to 10 properties. Two-thirds of respondents’ companies operate one to two restaurants/bars/buffets per property, while 54% hold more than 200 events per year per property.

Revenues and Budgets

We found plenty of good news for the industry.

Among our findings, we learned that banquets and catering events are the top revenue-generating service area, followed by bars, lounges, and brew pubs. Casual and family dining restaurants are among the top three revenue-generating areas. Over 80% of respondents expect an increase in revenue from casual dining restaurants and/or banquets/catering events in the coming year, on average by about 16%. About two-thirds expect growth in seven out of 14 listed service areas.

On average, the total estimated budget for food products and ingredients is more than twice the budget for beverages and related ingredients. The budget for non-foodservice-related offerings is over $1.5 million, on average.

Restaurants, followed by bars, lobbies and/or banquet rooms are the most common areas likely to be renovated in the next 24 months. Three-quarters of respondents’ companies have renovation plans in the next two years. Fifty-five percent of respondents’ properties plan to invest in foodservice technology in the next 12 months, with over a third of respondents planning to purchase point-of-sale software and/or hardware.

Trends, Perceived Challenges, and More

Craft beverages, breweries, and alcoholic beverages comprise the most popular trend in the foodservice industry. Healthier choices, local food sources, gluten-free and vegan/vegetarian are some of the other popular trending aspects. Accommodating special diets for guests is considered highly important by over two-thirds of respondents, followed by 59% to 60% rating lobby restaurant design and ambience or healthy breakfast options highly.

Also, the most common challenge for our subscribers is finding and retaining skilled labor in foodservice operations, followed closely by challenges such as competition for meetings and events business, profitability of F&B venues, and higher costs of organic foods and ingredients. About one-third of respondents’ companies plan to take sustainability measures, and many plan to source sustainable products or buy locally, use sustainable packaging, and/or implement a sustainable seafood program.

Supplier Selection

Indeed, the majority of respondents are highly involved in the supplier selection process, with 46% authorizing/making the supplier decision and a quarter of respondents recommending brands/suppliers. Individual lodging properties appear to have the highest influence on the F&B supplier selection decision, followed by GPOs. Moreover, fifty-two percent of respondents indicate that managers and chefs at local properties have a significant deal of flexibility in purchasing products from other suppliers, when suppliers have contracts or are on the chain headquarters’ preferred list. Yet, the ability to procure local and regional brands and/or product yield and durability are rated as highly important criteria by the majority of respondents. Then it is followed by compatibility with the hotel’s existing product line being rated highly by nearly two-thirds.

A Study in Success

Ultimately, our State of the Industry Study helped us glean more detail into the workings of F&B at hotel properties. And we hope our findings may help hoteliers find context among their peers, as well as give suppliers a crisper picture of who is working in hotels and what they do.