The hospitality industry is facing unprecedented challenges, from rising operational costs to disrupted supply chains and evolving customer expectations.
Among the areas most impacted by these pressures is food and beverage (F&B) operations, where managing costs while maintaining high-quality service has become a critical concern for hotels.
For many hotel owners and operators, F&B is not only an essential part of the guest experience but also a key profit centre—yet, it's an area where many are seeing margins erode.
Identifying the food cost margin gap
The difference between your actual profit margin and the potential profit margin in hotel F&B operations is known as the ‘margin gap’.
The ‘theoretical margin’ is what your business could achieve if all operational processes were running perfectly, while the ‘current margin’ reflects the reality, often diminished by inefficiencies and waste.
The Entegra guide explains, “Many hotels are losing revenue due to inefficiencies, waste, or missed opportunities that should be enhancing their bottom line.”
With the right strategies in place, it’s possible to bridge this gap and optimise F&B operations to boost profitability. However, this process is more complex than it may first appear, and many hotels are finding it difficult to tackle on their own.
Optimising hotel F&B operations
- Streamlining the supply chain
In a time of persistent supply chain disruption, the ability to maintain cost-effective sourcing and ensure ingredient availability is vital. Effective supply chain management is key to optimising F&B operations in hotels.
“By streamlining supply chains, hotels can reduce costs, improve consistency, and maintain quality—three factors that impact both guest satisfaction and profitability,” notes the report.
Building strong relationships with suppliers and using technology to predict trends and forecast demand can significantly reduce wastage and prevent overordering.
2. Minimising waste with smart solutions
Food waste is a significant issue for hotels, directly impacting the bottom line.
In hotel F&B operations, every uneaten meal or discarded ingredient is lost revenue. Implementing practices such as portion control, menu design, and repurposing leftovers can have a marked effect on reducing waste.
“By tracking waste against sales data, hotels can gain insights into where the greatest inefficiencies lie,” the guide suggests.
Hotels can also use technology to monitor waste more accurately, providing staff with the tools they need to adjust practices and reduce unnecessary losses.
3. Leveraging technology for data-driven decisions
Incorporating technology into hotel F&B operations can streamline many of the time-consuming tasks involved in food cost management.
Digital tools can assist with inventory management, demand forecasting, and real-time reporting, helping to identify inefficiencies and take action.
As the guide highlights, “Data-driven decision-making is the key to uncovering hidden inefficiencies and improving profitability.”
These technologies not only help to optimise costs but can also improve operational efficiency, freeing up staff time to focus on other crucial areas like guest service.
Overcoming challenges in food cost optimisation
For hotels, tackling food cost optimisation isn’t always straightforward. It involves complex layers of operations, from sourcing and storage to waste management and staff training.
The Entegra report states, “The process of bridging the margin gap requires a comprehensive approach, one that may require external expertise or specialised software solutions to implement effectively.”
Many hotels lack the internal resources to fully optimise their F&B operations, which is where expert advice or the right technological tools can make a real difference.
The report suggests that “Investing in the right resources, whether it’s technology, consulting services, or integrated solutions, is essential for closing the gap and securing a more profitable future.”
In an era where every penny counts, hotels that focus on fine-tuning their F&B operations can gain a competitive advantage and improve their profitability.
By applying these strategies, supported by technology and expert advice, hotels can bridge the food cost margin gap and continue to thrive in a challenging economic environment.
