What's Happening?
In 2025, U.S. hoteliers are facing challenges in increasing room revenues, which have grown by only 0.8% in the first half of the year. As a result, the industry is turning to food and beverage (F&B) departments
as a key source of ancillary revenue. According to CBRE's Hotel Horizons report, F&B revenue per occupied room (POR) increased by 3.8% during the first six months of 2025, surpassing the overall hotel revenue growth of 3.0%. Luxury and resort hotels have seen significant increases in F&B revenue, driven by leisure and 'bleisure' demand segments and the financial stability of high-income households. The post-COVID resurgence in hotel F&B demand has led to investments in creative offerings and revitalized venues, contributing to increased patronage.
Why It's Important?
The shift towards enhancing F&B operations is crucial for the hotel industry as it seeks to offset the stagnation in room revenue growth. By focusing on F&B, hotels can tap into a reliable revenue stream that benefits from both in-house and external patrons. This strategy not only boosts revenue but also improves profitability, with F&B department profit margins rising from 28.7% in 2024 to 29.1% in 2025. The emphasis on quality culinary programs and modernized spaces positions hotels to compete with standalone restaurants, potentially attracting more guests and increasing overall hotel profitability.
What's Next?
Hotels are expected to continue investing in F&B operations, focusing on menu optimization, enhanced consumer experiences, and effective marketing strategies. The industry may see further development of creative beverage offerings, such as low-alcohol and mocktail alternatives, to cater to changing consumer preferences. Additionally, hotels might explore new roles, such as F&B marketing and sales managers, to drive revenue growth. As convention hotels face declining occupancy, resort properties may become more attractive for hosting meetings and events, especially during off-peak seasons.
Beyond the Headlines
The focus on F&B operations highlights a broader trend in the hospitality industry towards diversification and innovation. By investing in unique culinary experiences and modernized spaces, hotels are not only enhancing their appeal but also adapting to changing consumer behaviors post-pandemic. This shift may lead to long-term changes in how hotels approach revenue generation and guest engagement, potentially influencing industry standards and practices.
