PERSPECTIVE
through June of 2023 , total F & B revenue has increased by just 11.3 % from the first six months of 2022 . It should be noted that most of this gain occurred in January of 2023 when comparisons were extremely favorable to the Omicron-depressed performance in January of 2022 .
Luxury hotels have struggled the most to grow F & B revenue in 2023 . This is consistent with the inability of luxury hotels to increase room rates during the year . It has become apparent that the double-digit growth in luxury hotel room rates and F & B prices enjoyed during 2021 and 2022 has proven to be unsustainable in 2023 .
FOOD AND BEVERAGE – DEPARTMENT PROFIT MARGIN
Percent of Department Revenue - By Property Type and Chain-Scale 40 %
35 %
30 %
25 %
20 %
15 %
CBRE HOTELS
27.1 %
30.1 % 28.3 %
22.3 %
23.9 % 22.3 %
25.8 %
32.8 % 32.9 %
20.3 %
Source : CBRE Hotels Research , Trends ® in the Hotel Industry , Sample of 2,500 properties with F & B Departments
24.7 %
22.5 %
3
25.4 %
30.8 % 30.2 %
24.8 %
34.8 % 34.4 %
21.8 %
26.2 % 24.8 %
23.6 %
29.3 % 28.3 %
EXPENSE TRENDS From 2021 to 2022 , total F & B department expenses at the hotels in our sample increased by 82.3 %. For comparative purposes , this is significantly greater than the 63.5 % rise in expenses for all operated departments . Among all the expenses within the hotel F & B department , the greatest increase was observed in the combined costs for salaries , wages and employee benefits . From 2021 to 2022 , total F & B department labor costs increased by 85.9 %. This growth in labor costs is primarily attributable to the increase in employee wage rates , as opposed to hours worked . Supplemental analyses performed by CBRE and other firms have found that hotels are operating with fewer employees and hours worked compared to pre-COVID levels . The combination of rising labor costs and a reduction in available employees and hours worked has been a significant influence on the decision to reduce the levels of food and beverage service at hotels .
Among the other expenses within the F & B department , the cost-of-goods sold rose by 73.5 % in 2022 , while all other department expenses ( supplies , tabletop utensils , uniforms , etc .) grew by 84.2 %.
PROFIT TRENDS The previously referenced trends in hotel
FOOD AND BEVERAGE – DEPARTMENT PROFITS
Dollars Per Available Room - By Property Type and Chain-Scale $ 18,000
$ 15,000
$ 12,000
$ 9,000
$ 6,000
$ 3,000
Source : CBRE Hotels Research , Trends ® in the Hotel Industry , Sample of 2,500 properties with F & B Departments
CBRE HOTELS
$ 0
F & B revenues and expenses resulted in a healthy 145.2 % increase in F & B department profits from 2021 to 2022 . This growth in profits was not only attributable to the increases in revenue but enhanced operating efficiencies in the department , as well . F & B department profit margins increased from 21.3 % in 2021 to 25.8 % in 2022 . Following revenue trends , the greatest gains in F & B department profits during 2022 were achieved by convention and upper-upscale hotels .
Unfortunately for hoteliers , the revenue slowdown in 2023 has also resulted in a deceleration of profits gains . Through June of 2023 , F & B department profit growth
4 has slowed down to 14.2 %. Struggling the most are luxury and resort hotels that have seen profit growth of 0.7 % and 7.1 %, respectively , during the first six months of 2023 .
F & B department operating efficiencies have also suffered in 2023 . June year-todate F & B department profit margins have dropped from 29.3 % in 2022 to 28.3 % in 2023 , while department profit margins have declined in 2023 for all chain-scale and property type categories . The lone exception has been upper-upscale hotels whose F & B department profit margins have increased slightly from 32.8 % to 32.9 % during the first six months of 2023 .
34 hotelsmag . com Jan / Feb 2024