NASHVILLE, Tennessee — Hotel guests today are spending more on food and beverage than they were before the pandemic, even when adjusting for inflation, creating an opportunity for hoteliers.
In fact, hotel guests are spending 4% more on food and drinks this year so far than they did in 2019, said Raquel Ortiz, director of financial performance at STR. While that number was down in 2024, hotel guests also spent more in 2023.
“We're really seeing a clear shift in how guests are spending their F&B dollars,” Ortiz said during the “Pair F&B with Profitability” presentation at the 2025 Hotel Data Conference. “They are moving away from room service and minibars and more toward dining venues, catering events and social spaces.”
The post-pandemic socialization is continuing and actually growing, she said. Hotels that are leaning into this trend are capturing more of that F&B spend and creating stronger brand loyalty. Year to date, some of the F&B space is seeing double-digit growth.
When breaking it down by chain scale, upper-upscale hotels are the largest contributor overall to F&B revenue, Ortiz said. They account for an average of 57% of the revenue, followed by luxury hotels at 36%.
“This makes sense once you consider that these hotels are the type that typically have more F&B outlets, they have larger event spaces, and they definitely have a stronger ability to really attract those amounts of guests, locals or business functions,” she said.
Even though upper-upscale hotels account for a higher percentage of overall F&B revenue contribution, luxury hotels bring in higher revenue per occupied room, she said. They bring an average of $220 per occupied room night while upper-upscale hotels bring in about $92 per occupied room night.
When considering profitability strategies and revenue potential, these two segments are the main topics of conversation, she said. This is where there’s more experimentation, including rooftop lounges and chef-led concepts.
“Guests are really looking for something that’s more than just a meal,” she said. “They want a meal, they want a memory. They want something they can share, especially on social media. Really experiential dining is a really powerful way to differentiate yourself from one brand to another and also to really drive that experience overall.”
Labor costs pressure profits
Labor isn’t just one piece of the expense pie, Ortiz said.
“It’s probably the most expensive and the least flexible,” she said.
Growing food-and-beverage revenue goes hand in hand with rising labor expenses, she said. The key here is labor optimization so that as demand rises, managing the labor becomes the difference between being profitable and barely breaking even.
Over the past year, salaries and wages have accounted for 37% of all food-and-beverage expenses, and 13% is attributable to taxes and benefits, she said. While food-and-beverage revenue has increased in recent years, labor costs have climbed faster in most of those years, creating margin pressure.
“When we're looking over the last decade, you can really see that labor costs have outpaced revenue growth in more than half of the years,” she said. “And in those years, despite revenue gains or even during some of those recovery periods, labor costs climbed much faster, again, putting that sustained pressure on profit margins.”
So far in 2025, revenue growth is slightly up compared to labor cost growth, a potential sign of the beginning of stabilization, Ortiz said. Even so, caution is necessary because the year isn’t over yet. Sustainable wage pressure, staffing shortages and high levels of expectations from guests could reverse this trend.
Best practices in designing, running outlets
Hoteliers need to stop thinking like just hoteliers and start thinking like restaurateurs, said Nathaniel Brethold, vice president of restaurants, bars and events at CoralTree Hospitality. Restaurants will not open if there are no guests to be had. They won’t come in if there’s no one eating or drinking there and the place looks empty.
The key is knowing guest behavior and demands in the market, he said. Having a coffee shop in a lobby may be a better activation of the space than a bar, which may be empty during the day. People will get a cup of coffee and work on their laptops in the lobby, giving the lobby more energy.
“So again, stop thinking like a hotel person only, and start thinking as a restaurateur,” he said.
Along with hiring a restaurant designer, it’s also important to hire menu designers and digital specialists, Brethold said.
“If you’re going to put any thought into what is going on the plate and your chefs are designing this beautiful menu, you have to have a menu that matches that,” he said.
That means having experts who know how to attract eyes on the menu, and not just letting your F&B manager type up a Microsoft Word document using an elaborate font because they think it looks cool, he said.
“The bottom line is that if you're putting all this thought into everything ... hire actual restaurant designers who can do the work for you.”
Food and beverage can be profitable if hoteliers treat it like an actual business instead of an amenity, Brethold said. For example, it’s necessary to look at the market and see what restaurants are doing well and which ones aren’t.
“We also go to the table with no ego whatsoever, which is really hard for a lot of general managers and a lot of chefs and F&B directors because everybody wants that prestigious restaurant, everybody's trying to get the James Beard award,” he said.
If a hotel is surrounded by great restaurants, it may be better to figure out the niche not being served, Brethold said. It’s OK to shoot for having the best lobby coffee bar around and not have a restaurant because the hotel actually succeeds with its banquets and catering operation. If a sports bar is more profitable per square foot than a restaurant, that may be the way to go.
“Looking at all of this surrounding market data, just like you do with your concepts and hotels, you need to do the same thing with the food-and-beverage operations,” he said.