As COVID-19 plows through the hospitality industry, it's carving new paths to profit along the way. Moving forward, hotel food and beverage (F&B) services will be among the most transformed departments in the post-COVID-19 world.

Already, the virus has changed how F&B services attract customers, and it's altering the habits of guests. (In a prior post, we presented how social distancing could transform F&B operations.)

Wondering how F&B services will change for hotels post-COVID-19? In this article, we'll dig into the answer.

What's the State of Hotel F&B Services Now?

Unfortunately, many business owners within the food and beverage industry are pushing the panic button. As a whole, F&B services have already been decimated by COVID-19. Estimates suggest U.S. restaurants alone have lost $120 billion thus far.

Still, that some restaurants are in pain is no reason to ditch hotel F&B services altogether. For hoteliers, rolling with the punches and adjusting to a new post-COVID market could open up wider streams of much-needed revenue well into the future.

How Has COVID-19 Changed F&B Operations?

COVID-19 hasn't just threatened people's physical health. It has affected how visitors interact, and it could permanently change guests' habits. Here are some ways the pandemic is shaking up the way people eat and drink:

Sit-Down Dining Is Dwindling: Even before COVID-19 disrupted the market, more consumers were choosing to grab food and beverages on the run. In fact, in the United States, fast food service has steadily grown throughout the past decade. Now, as the public practices social distancing, that move away from sit-down dining has been kicked into overdrive.

How can hotels adjust?

In a post-COVID-19 world, it may be profitable for hoteliers to ramp up room service options or even put an extra emphasis on takeout operations. Even if sit-down choices are running smoothly, it's also a good idea to rearrange seating to give guests the space they need to feel comfortable.

Cleanliness Is Crucial: Sure, visitors have always cared about the sanitation of their food and drink. However, the pandemic has pushed germs to the forefront of the public's mind. People want to be reassured that a hotel's F&B services undergo deep cleaning and sanitation on an ongoing basis.

Hoteliers can give guests peace of mind by pushing cleanliness out into the open. That might mean adding sanitation stations, encouraging cashless payment, putting up physical barriers between employees and guests or simply taking extra time to disinfect shared space.

Shared F&B Services Are Unstable: As the virus looms, the public is hesitant to dive into shared F&B services, such as buffets or salad bars. In fact, the pandemic has already taken down several well-known buffet services across the United States. At least for the moment, these types of eateries seem to be in danger.

For hoteliers, it may not be necessary to ditch breakfast and conference buffets altogether, but they should take action to ensure the public that their food won't be exposed to germs. That might mean adjusting a buffet's layout to eliminate germ hot spots. For instance, hoteliers can add extra sanitary guards, get rid of shared utensils and switch to touchless beverage dispensers.

How to Adjust for F&B Profit in a Post-COVID World

Wondering how to prepare a hotel's F&B department for more profit in a post-COVID environment? It all starts with a deep dive into F&B operating metrics to see what's working and what isn't within the hotel's current model. Here are some metrics to give hoteliers a firm grasp on F&B financials:

F&B Revenue Mix

Post-COVID habits will vary from one market to the next. That's why it's important to nail down a hotel's revenue mix and get a sense for what's working locally. To find revenue mix, take one service's total revenue and divide it by your F&B department's total revenue.

Revenue mix tells hoteliers which F&B segments are pulling in the most revenue. Maybe a banquet service is performing especially well. Perhaps takeout is accelerating. In all cases, knowing how a section of the operation is performing will make it easier to see where to invest or cut back.

F&B Revenue Per Available Room

In order to see how F&B services are performing compared to competitors, it helps to break the numbers down on a per-room basis. That means determining F&B revenue per available room. Here's how to find F&B revenue per available room:

  • Add up the number of the hotel's available rooms
  • Total all of the hotel's F&B revenue
  • Divide total F&B revenue by the number of total available rooms

Remember, because this metric only addresses revenue, it won't tell you the whole story of how your F&B department is performing on its own. However, it can help hoteliers see how much revenue F&B services are bringing in on a per room basis. From there, it's easy to compare figures to deeper metrics, such as gross operating profit per available room (GOPPAR), and get a full feel for the department's performance.

Food and Beverage Profit Percentage

When it comes to measuring any department's performance, profit is what truly matters. That's why F&B profit percentage should be fueling every hotelier's post-COVID plan. To find the hotel's F&B profit percentage, divide total F&B profit by total F&B revenue. By getting a grip on F&B profit, a hotelier can see what adjustments are trickling down to the hotel's bottom line.

Use Metrics to Propel Your Hotel's Post-COVID Plan

Even as common trends hit F&B services, there's still plenty of uncertainty clouding operations in a post-COVID world. Luckily, with hotel data, it's possible to cut through the haze. With in-depth hotel benchmarking and market intelligence reports, decision makers get a clear view of those new paths to F&B profit. More importantly, they can see where those roads lead and which avenues are headed toward higher hotel profit.

David Eisen
Director of Hotel Intelligence and Customer Solutions for HotStats
HotStats Limited

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