The Changing Profile of Hotel Food and Beverage
By Robert Mandelbaum Director of Research Information Services, CBRE Hotels' Americas Research | August 09, 2015
If you walk into a full-service hotel today, one of the first things you may see is either a coffee bar, or a mini-mart in the lobby. What you may not see is a traditional three meal a day, all-purpose dining room. This change of scenery is emblematic of the evolution of food and beverage offerings at U.S. hotels.
Consumer and financial factors have both contributed to this change. A rising number of new travelers are seeking communal experiences similar to what they partake in back home. Sitting in a coffee shop atmosphere with internet access is more appealing than sitting by yourself in a large dining room or your guest room. The ability to serve yourself and control your own time has given rise to the popularity of grab-and-go mini-markets in full-service hotel lobbies.
On the financial side, the great recession tightened the budgets of both leisure and corporate travelers. The days of the unrestricted expense accounts are dwindling, and hotel guests are seeking more affordable dining options. From the hotel's perspective, food and beverage departments have mostly been viewed as operational intensive operations that take a lot of time to manage for relatively low profit margins.
One way to view the evidence of the shift away from extensive food and beverage and outlets is to look at the hotel projects that are in the pipeline to be developed in the U.S. According to the April 2015 STR, Inc. pipeline report, 85 percent of the lodging projects that are either under construction, or in the final planning stage, do not contain a restaurant. Further, among those hotels that will offer a restaurant, approximately 37 percent can be classified as "select-service" properties with just a limited amount of retail food and beverage service.
Another indicator of the changing profile of hotel food and beverage can be found in the operating statements of U.S. properties. To understand recent trends in hotel food and beverage sales, PKF Hospitality Research (PKF-HR), a CBRE Company, analyzed the financial performance of hotel restaurants, lounges, room-service, and catering departments for the period 2007 through 2014. This time period covers the peak performance years of the U.S. lodging industry during the mid-2000's, the great recession, and the subsequent recovery.
The information came from a same-store sample of 1,613 full-service, convention, all-suite, select-service and resort hotel operating statements taken from the firm's Trends® in the Hotel Industry database. In 2014, the hotels in the sample averaged 302 rooms in size, 74.3 percent in occupancy, and an average daily rate of $117.36.
The Hotel Business Review articles are free to read on a weekly basis, but you must purchase a subscription to access
our library archives. We have more than 5000 best practice articles on hotel management and operations, so our
knowledge bank is an excellent investment! Subscribe today and access the articles in our archives.