Errors That Shrink the F&B Revenue of Hotels

Food and beverage account for up to one-fifth of hotel revenue, but a flawed strategy can reduce it. Find out what many hoteliers have been doing wrong and how to fix it.

Hotelier Errors That Take a Bite Out of F&B Sales

Did you know that travelers pay more money on food and beverage (F&B) than anything else?

A study in 2019 found out that tourists (albeit mostly Americans) spent a staggering $278.9 billion on eating and drinking. That’s 25.35% of the $1.1 trillion total expenditure of vacationers that year. And with the gradual easing of pandemic-induced travel restrictions across the globe, the tourism sector should be able to regain its vigor.

When that happens, we can reasonably assume that travelers will still be keen on spending the same amount of money on food services. Maybe even more, because the COVID-19 outbreak deprived most tourists, international and domestic alike, of the chance to explore and experience different cultures.

Although it’s an exciting prospect, hoteliers such as yourself shouldn’t just be happy to see steady occupancy and settle with the profit you’d normally get from F&B. You should aim to take a bigger slice of the pie.

According to Hotel Business Review, F&B makes up 10% to 20% of hotel revenue. It’s a decent figure, but this revenue stream can become a significant contributor to your coffers if you know what you’re doing.

Two years ago, travelers paid $36.6 billion more on food than on lodging. This fact should be an eye-opener for you to consciously make F&B a more profitable aspect of your hotel operation.

Now, competing against full-service restaurants, quick-service establishments, and catering businesses is brutal in most locations. In all probability, your guests view your hotel as what it is: a transient accommodation, not a gastronomic destination.

That’s fair. No traveler would fly and cross the ocean just to camp out at a hotel for a couple of days. Inevitably, they will spend their waking hours beyond the vicinity of your building and check out the local scene.

It would be a marketing nightmare to change this perception, but nobody said you should.

If you revisit your food services and fix what you’ve been doing wrong all this time, you won’t lose out too much to third-party vendors for sizable F&B sales.

So, what are the errors many hoteliers are guilty of? The following are the usual slip-ups.


1. Lacking a Sense of Location

When welcoming non-local guests, you might be inclined to fill your menu with items familiar to them. After all, you can’t expect all tourists to be excited to try local delicacies.

It’s understandable for hotels to err on the side of caution to please all palates. But your business will lack a sense of local flavor if you choose generic mainstream cuisines over your region’s specialties.

A safer F&B concept is to rehash your offerings. It allows you to serve local tradition and culture without forcing the less inclined to go out of their comfort zone.

Using the historical data from your point of sale system, you can learn about your best sellers and replace less popular ones with the locals’ favorite dishes and comfort foods.

Furthermore, there’s this thing called the naturalness movement. It’s a crusade for organic food, emphasizing the provenance of ingredients.

If you wish to support this cause and appeal to those who champion it, start purchasing locally sourced products.

Don’t be modest about your initiative. Advertise your virtue, and let everyone know that your business buys from local farmers, livestock raisers, and fisherfolk to boost your region’s supply chain and economy.


2. Not Reacting to Culinary and Food Industry Trends

Trends come and go, but you should milk them for all they’re worth while you can.

At the risk of suffering from FOMO, jumping on a culinary bandwagon is worth it on many levels.

  • First, it can show that you pay attention to what the public likes.
  • Second, it can convey that your chef is creative and a quick learner.
  • Third, it can be a good opportunity to ditch an unpopular item in favor of a more promising one.
  • Fourth, it can act as an excellent promotional item.
  • Fifth, it can give your guests a reason to dine in-house again.
  • Sixth, it can enhance the dining experience people can expect from your hotel.

With sound sentiment analysis, you can discover emerging food fads fast. However, don’t embrace every trend you encounter. Make sure that it’s not out of step with your business so that it won’t ruin your brand.


3. Disregarding Special Diets

Food restrictions are no longer limited to medical and religious reasons.

Veganism, gluten-free, GMO-free, keto, paleo, and raw are just some of the growing number of dietary preferences of 21st-century consumers.

Most businesses are still in the process of becoming “woke” when it comes to special diet sensitivity. But it’s never too late to begin respecting the different lifestyles of your guests.

Admittedly, special diets require specific ingredients and thoughtful preparation. Ingredients for these diets may be expensive, and some chefs are not excited about these menu changes.

So, you should do your homework first. Consider the cost and the level of adjustment necessary to update your inventory and ready your crew. There may not be a strong demand for special food items to justify a drastic change to begin with.

Use your existing email contacts and social media followers to launch a survey. Likewise, you can ask your prospective guests if they have particular dietary restrictions upon booking. This way, you can determine if there’s a need to expand your menu options.


4. Underestimating Snacks

Some cultures love snacks more than others, but everyone likes to eat between meals.

Tourists tend to crave something light after hours of traveling by air, sea, or land. They also want to fill up in between exploring or outside regular mealtimes. 

A day full of adventure and exhaustion can turn any person snacky. So, offering snacks can be a profitable idea if your kitchen isn’t big enough to create an extensive menu with full-course meals.

Snacks are less expensive and are easier to store and prepare. Seasonal fruits, baked goods, healthy desserts are just some gastronomic pleasures your kitchen can offer.

With a user-friendly inventory management solution, you prevent perishable supplies from going to waste and plan which snacks to sell more strategically.


4. Charging Top Dollar for Room Service

Hotels have a reputation for selling overpriced foods and drinks. It’s like penalizing your guests for choosing your establishment to feed them.

Nobody understands the economics of your hotel’s service better than you. But realize that charging premium prices for underwhelmingly ordinary meals could backfire on your brand.

In the past, most travelers were willing to pay for exorbitant room service bills simply because there were few options then. Now, distance is hardly an issue with food delivery apps.

Of course, you can prohibit non-affiliated F&B brands from entering your hotel premises or impose a corkage fee for guests who bring their own booze. But such policies could leave a bad taste in people’s mouths.

Unless you purposely market your room service as a last resort option, strongly reconsider charging more than what you can consistently deliver. If you can’t offer a stellar dining experience, you’ll be doing your guests a disservice.

In the end, they may never return and drive up your customer acquisition and retention costs with negative online reviews.


5. Refusing to Upgrade Old Tech

Disruptive technologies like digital wallets or cloud-based analytics can help boost your F&B sales in more ways than one.

If you don’t adopt advanced digital tech, you’ll gain nothing and stand to lose a lot. So debunk your biggest misconceptions about it before your competitors beat you to the punch.


Before You Set the Table

Probably, F&B will never become your hotel’s bread and butter, but it’s a crucial revenue stream you should nurture. Address the mistakes and areas of improvement for your hotel, and serve your guests more holistically.