What's Happening?
In 2025, U.S. hoteliers are experiencing a slowdown in room revenue growth, prompting a shift in focus towards food and beverage (F&B) departments as a key source of ancillary revenue. According to CBRE's
Hotel Horizons report, room revenue increased by only 0.8% in the first half of the year, with an annual growth forecast of just 0.1%. In contrast, F&B revenue per occupied room (POR) saw a 3.8% increase, surpassing the overall hotel revenue growth of 3.0%. This trend is particularly pronounced in luxury and resort hotels, which have benefited from strong leisure and 'bleisure' demand segments post-pandemic. The hospitality industry has responded by investing in creative F&B offerings and revitalizing underutilized spaces, leading to increased patronage from both in-house guests and external visitors.
Why It's Important?
The shift towards enhancing F&B revenue is significant for the U.S. hotel industry, as it provides a buffer against the stagnation in room revenue growth. By focusing on F&B, hotels can tap into new revenue streams and improve profitability. The increase in F&B revenue has also led to improved profit margins, rising from 28.7% in the first half of 2024 to 29.1% in 2025. This indicates that expenses are increasing at a slower pace than revenues, highlighting the effectiveness of strategic investments in F&B operations. The trend underscores the importance of diversification in revenue sources for hotels, particularly in a challenging economic environment.
What's Next?
As hotels continue to invest in F&B offerings, they are likely to see further growth in this area. The focus on creative and personalized dining experiences, along with the revitalization of physical spaces, is expected to attract more patrons and enhance customer satisfaction. Additionally, the emergence of new beverage categories, such as low-alcohol and mocktail alternatives, presents opportunities for hotels to cater to evolving consumer preferences. Hotels may also consider creating dedicated F&B marketing and sales manager positions to drive revenue growth and optimize operations.
Beyond the Headlines
The emphasis on F&B revenue growth reflects broader trends in the hospitality industry, including the increasing importance of experiential offerings and the need for hotels to adapt to changing consumer behaviors. The success of F&B operations can have a halo effect on overall hotel performance, influencing room rates and occupancy levels. Moreover, the focus on sustainability and responsible sourcing in F&B operations aligns with growing consumer demand for ethical and environmentally friendly practices.
