FOOD AND BEVERAGE revenues for hotels are expected to increase, and hotels are adding more F&B square footage to new builds and remodeled properties, according to procurement and supply chain management services provider Avendra’s recently released report “Lodging Food & Beverage Outlook.” The survey of around 900 hotel managers, F&B directors and hotel management companies found several other trends, such as increases in food spending by groups at full-service hotels and revenues from grab-and-go meals at limited service hotels.
Some 60 percent of participants in Avendra’s study expect contributions from F&B as a percentage of revenues to grow over the next three to five years from the approximately 30 percent contribution today. The survey found that 40 percent of luxury hotel owners plan to increase their F&B square footage.
“Today’s restaurants face multiple pressures based on shifting consumer behaviors,” said Chip McIntyre, senior vice president of strategic sourcing, Avendra. “We worked with an independent third party to help identify those behaviors to ensure that the restaurants and food operations our hotel customers own and operate can remain relevant in an increasingly diverse and competitive environment.”
McIntyre said F&B represents about $50 billion in revenue for U.S. hotels, about 25 percent of total revenues, and the amount is growing 2 to 3 percent each year. He said the survey identified three major trends.
“First, groups frequenting full-service hotels are spending more and they’re moving up to higher-tier proteins or beverage options. We are also seeing a shift towards local restaurant concepts accompanied by an upscale bar,” he said. “Second, limited-service hotels are seeing outsized volume growth coming from grab-n-go type occasions. This lodging segment is seeing a larger share of the 2 percent industry supply growth. Third, 75 percent of group demand is already booked (driven by conferences and events), we can see group business is pacing up 2 percent to 3 percent for 2018. This is the biggest, most important driver of F&B demand.”
Other findings from the survey include:
Catering is the biggest area of F&B investment, and 61 percent of respondents are planning net growth in this area.
In-room minibars and chain restaurant service will decrease in hotels the next 3 to 5 years, and only 10 percent of respondents in the luxury segment said they plan to increase investments in room service.
Around 5 percent of mid-scale properties are investing in limited-service restaurants while all other segments are moving away from this concept.
Just over half of the participants are selling fresh/refrigerated foods in convenience or a market formats and another third of those that do not are planning to add the service. About 45 percent of hotels offering fresh fruit see better-than-expected revenue growth.
About 95 percent of luxury and independent hotel operators provide food benefits to employees today, and 35 percent to 40 percent of these properties are looking to expand that offering in the future.