With F&B Costs Rising, Consider the All-Inclusive Option

March 4, 2019 Kevin Edmunds


Recent data from travel/hospitality research firm STR shows that hotels in North America and the Caribbean are seeing solid growth in food and beverage revenue overall, and particularly among group customers. Total F&B revenue per occupied room grew by 2.7 percent in 2018, but the catering and banquets segment saw a 3.4 percent rise in revenue, from 81 cents per square foot of event space to 83 cents.

Now, if you have to negotiate costs for all the elements of a meeting—guest rooms, meeting and event space, event technology and production services, and food & beverage—then you’ll probably have to deliver total F&B spend more than 83 cents per square foot of event space to earn concessions on the costs of all the other areas of the meeting. That’s the only way a property can make sufficient profit from a meeting or incentive, and that can be an expensive burden to groups.

On the other hand, when planners consider going the all-inclusive route—where all costs of a meeting are broken down to a single per-person rate per day—then the value proposition goes way up for each group. After all, the amount of food & beverage generally consumed by business groups—especially at properties in tropical destinations—is large, and therefore costly. But at our AIC Hotel Group resorts on the east and west coasts of Mexico, in the Dominican Republic, and in Miami, the all-inclusive package can be arranged so that all costs are known ahead of the event; this way, the amount of food & beverage consumed never results in surprise costs, or in having to cut corners to stay on budget.

Here’s some more food for your thought: “Beverage was the name of the game in 2018, and we can expect to see more of that in 2019,” said Veronica Andrews, director of digital data solutions for STR. “Beverage revenue per occupied room grew 4.2 percent, and we find it noteworthy that beverage revenue grew across all hotel classes through hotels’ venue operations and hosted events in catering and banquets.” Again, the all-inclusive option eliminates this cost variable for meetings and incentives.

For planners looking for a new twist in their F&B, one trend that’s gaining steam is the demand for non-alcoholic beverages other than soda, juice, seltzer, and water. Specifically, the “mocktail” movement—which features non-alcoholic libations that resemble traditional cocktails in appearance and flavor—is strengthening. In fact, our event bartenders across AIC Hotel Group actually enjoy preparing and presenting mocktails because it provides an interesting and tasty mixology experience for all attendees, and makes a reception more memorable to attendees.

So, as you consider the use of the all-inclusive option for your next meeting or incentive, keep in mind that we are ready to introduce your attendees to the unique, rich flavors of local fruits, herbs, spices, and other ingredients that can make a great drink, with or without alcohol.

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