Food & Beverage Boost Hotels' Profit Margins

Hotel food service sales amount to about $12.3 billion across the nation, according to the American Hotel & Lodging Association (AHLA), Washington, D.C., Tia T. Gordon, manager of media relations for the AHLA, says hotels can impact their bottom line via catering, restaurants, lounges and other

food and beverage (F&B) operations. They can also reach out to non-guests via their food operations. In New Jersey for example, a number of hotels have fivestar restaurants which attract non-guests. Some that come to mind are The Dining Room in the Short Hills Hilton and Rod's Steak and Seafood Grille at The Madison Hotel, Morristown. The bread and butter (no pun intended) of a hotel operation is its food and beverage department, which often contritubes 40 percent of the establishmerit's revenues. It is the second most important item on the profit and loss statement for a hotel, after lodging. The most profitable of the food and beverage (F&B) sector is the catering operations.

Smith Travel Research, Hendersonville, Tennessee, reports that the food and beverage department profit margins for U.S. fullservice hotels increased to 26.5 percent in 2000 (latest available figures) from 19.9 percent in 1995. Many hotels are hiring top-notch chefs and putting an upscale stamp on their menu offerings. The end result is more business, both local clientele and hotel guests.