NON-ROOM REVENUE for U.S. hotels rises and falls over the years with guest preferences, according to CBRE’s annual Trends in the Hotel Industry surveys from 2007 through 2018. Most recently, new alcoholic drink menus are pumping up F&B returns while kiosks are bringing back retail.
Food revenues are behind prior peak levels, but the sale of alcoholic beverages at hotel restaurants and lounges is up from 2007, report author and CBRE Director of Research Information Services Robert Mandelbaum said.
However, as of 2018, the food revenues from hotel restaurants and lounges are still lagging behind 2017 along with mini-bars and in-room dining revenues. In total, the food and beverage department revenue increased 1.1 percent annually during the surveyed years.
Changes in technology and the introduction of portable technologies lead to the decline of telecommunications and movie rental revenues, Mandelbaum said. Smartphones, which eliminated the need for guestroom phones, replaced other entertainment sources as well. Guest rooms TVs are now more used as a platform to view the content streamed on the guests’ devices.
The changes also impacted retail revenues as the preferences of millenials and Generation Z in favor of tech-based platforms. Smaller kiosk operations frequently located near the front desk and staffed by reception personnel have almost replaced traditional newsstands.
Parking is the one source of revenue on the rise since the great recession, Mandelbaum said, not because of an increase in the guest’s use of cars or preference to pay for parking, but because hotels find it to be a very profitable source of income to offset other revenue declines.
“Guest preferences will continue to change from generation to generation. Some of these changes occur as social habits evolve,” Mandelbaum said. “Other changes are the result of advancements in technology, or auxiliary segments of the travel experience. In turn, hoteliers need to continue to monitor trends in guest preferences and adjust the physical facilities, services, amenities, and experiences they offer.”
Gross operating profits per available room for U.S. hotels rose a little in June despite a dip in RevPAR as a result of money brought in from the hotels’ sale of non-room related items like souvenirs, premier services and upgraded amenities, according to Hotstats.