Hotel Retail Alcohol Privileges Post-Covid: Positive Legal Trends
By Jessica Brown Associate, Holland & Knight LLP | December 2022
The global COVID-19 pandemic continues to affect every sector, with the hospitality sector one of the hardest hit.
Some research suggests that recovery to pre-pandemic levels will not be achieved until 2023 or later, especially when accounting for the hard-hit business travel sector.
An important aspect of business travel is ancillary services, such as spending on food and beverage, and meeting space.
Food and beverage, specifically the alcohol beverage retail sector, underwent significant change during the pandemic. When bars and restaurants temporarily closed in 2020, followed by a sporadic period of reopening (then closing again) and navigating major changes in operations, consumers who wished to enjoy their favorite cocktail had to adapt and learn to make these drinks at home. While that adjustment augmented certain aspects of the alcohol beverage industry, with the growth of at-home mixology, consumers around the world also developed a greater appreciation for what retail side bars and restaurants offered.
Most hotels enjoy on premise (onsite service by the drink) alcohol privileges, either directly via in-room or meeting space service, or indirectly, as hosts of cafes, restaurants, or bars. Some hotels enjoy a hybrid of these privileges, and/or host package stores, where guests can purchase unopened case goods, by the can or bottle. As a result, when most states enacted sweeping emergency legislation in an effort to blunt the almost overnight shut down in revenue on premise retailers experienced at the start of the pandemic, hotels were faced with a great deal of regulatory uncertainty.
While emergency legislation on the service of alcohol has all but vanished, hotels now face permanent changes to the retail side alcohol service sector that should be operationalized for maximum revenue growth, especially when targeting the hard-hit business travel sector.