Using F&B Analytics to Make More Profitable Decisions

The COVID era shaped hospitality operations across a number of areas, none more so than the F&B department, where rising wages and food costs, coupled with the inability to attract employees, resulted in an increase of self-service options and the closing of many traditional full-service hotel restaurants. 

 The research team at CBRE Hospitality, led by Robert Mandelbaum, recently published some fantastic analysis in HOTELS magazine on how post-COVID changes in F&B offerings have impacted revenue and profitability.  

 At Otelier, many of our hotel partners tell us they are focused in 2024 on making more profitable decisions across all the F&B outlets in their hotels and resorts. We think there's a great deal of potential here for hoteliers to be using data to make smarter decisions. Let's take more of what we've learned from yielding rooms and apply it to the F&B department, including using Artificial Intelligence to turn analysis into action. 

 We’re curious: How does profitability across the various F&B outlets in your property stack up to the industry averages presented in CBRE’s research? Here are four key data points from the report that can help hoteliers make smarter decisions to drive profitability in the F&B department: 

1. F&B revenue grew 50.2% from 2021 to 2022. Total hotel F&B revenues Per Occupied Room (POR) increased by 50.2% from 2021 to 2022, outpacing the 24% increase in total hotel revenue POR. But there was a slowdown in total F&B revenue growth across all property types in the first half of 2023, with luxury hotels struggling the most. There were reductions in revenue earned from in-room dining and minibars during 2022 due to social distancing requirements. 
   
   
2. F&B expenses grew 82.3% from 2021 to 2022. The most significant increase observed in the combined costs for salaries, wages, and employee benefits (85.9% growth).
   
   
3. F&B profits grew 145.2% from 2021 to 2022. Profits were driven by both revenue increases and enhanced operating efficiencies. F&B department profit margins increased from 21.3% in 2021 to 25.8% in 2022, with convention and upper-upscale hotels achieving the greatest gains in profits. However, F&B department profit growth slowed to 14.2% through June of 2023, with luxury and resort hotels experiencing the most significant challenges.
   
   
4. F&B profit margins declined 1% from 2022 to 2023. Operating efficiencies declined in 2023, with profit margins dropping from 29.3% in 2022 to 28.3% in 2023 for the industry as a whole, except for a slight increase in upper-upscale hotels. 

As F&B department leaders, revenue leaders, data analysts, and even chefs, you can use these benchmarks to compare how profitability at the F&B outlets across your hotel and portfolio stack up. By integrating data from your point-of-sale systems and accounting systems into a business intelligence tool like Otelier IntelliSight, there are simple steps to create reports and dashboards that provide access to detailed revenue and expense data – including labor analysis – across all your outlets. 

By spending just a few minutes with this analysis in an easily accessible dashboard, you should be able to make adjustments to your F&B strategies that will ensure more revenue flows through to the bottom line.  

At a high level, some examples include focusing on higher revenue-generating areas like bars and room rental, and using labor expense data to optimize labor costs. 

At a deeper level, Executive Chef Danny Zeal at Sea Island Resort uses Otelier to monitor everything from revenues to quantity of items sold, all the way down to each individual check. He can see items sold by outlet, by meal period, and by server.  

 Let us show you how we can centralize and visualize your F&B data to help you build strategies that will drive more F&B revenue to the bottom line.