F&B Drives Hotel Revenue

Phil Benson asks why F&B is driving revenue on the worldwide hotel scene.

Significant differences have been seen in India compared to the global picture, for revenue generation from the food and beverage  sector. International hotel chains, Marriott and Accor Group are witnessing a large slice of their India revenue coming from F&B.

Marriott Hotels have revealed that 50 per cent of their revenue in India is coming from the F&B sector, compared to just 20 per cent from their international overall earnings. A large number of international hotel chains show similar figures as they start to focus their attentions on the restaurant and bar offerings a hotel can provide in areas where dining out was not always an option.

F&B: Big Revenues!

It is the view of many hospitality experts that internationally, the F&B option is primarily only offered by hotel chains as an additional service for guests, rather than viewing it as a profitable revenue stream. However, in India, F&B is now being seen as a real opportunity and hotels are beginning to see the benefits and rise in incomes that walk-in-guests can provide.

For example, Ibis Hotels, Accor Group’s economy brand has developed an all day eating concept called Spice It, which provides an extensive Indian menu. The hotel chain has also started to offer an F&B room service delivery option in India and introduced the Hub bar across all of its hotels.

An Accor spokesperson said, “It is not uncommon for our hotels in India at times to have up to 50 per cent of the revenue coming from the food and beverage operation. Our upscale brands such as Pullman would typically have such a weighting, whilst our economy Ibis brand will be much lower. This is due to larger hotel conference facilities and a higher number of outlets in our India hotels.

A Fresh Look at F&B

Hospitality companies are now recognising the important role that restaurants and bars can now play, when not only looking for additional income sources, but for positioning their hotels from a brand and product perspective, particularly in India and is a viewpoint that needs to be adopted on a global scale.

Marriott Hotels and Accor Group are not expecting a decline in the contribution that the F&B sector provides to the overall picture for the foreseeable future, however they are aware, as all hoteliers should be, that factors such as wealth creation, urbanisation and globalisation has created a more sophisticated consumer with interests for fine dining, new cuisine and wine.

F&B will continue to be a key factor to top line income streams that drives awareness in the local market, while the sale of rooms drives greater bottom line revenue and so the two can and should go hand-in-hand for a successful and prosperous business.

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