ASAP Linen, Catering and banquets

Unsurprisingly, food revenue makes up the majority of catering-and-banquets revenue; broken down by chain scale in STR’s research sample, it accounted for 57% of revenue at luxury hotels, 59% at upper-upscale properties and 58% at upscale hotels. Beverage revenue accounts for another 10% of C&B revenue at luxury, 8% at upper-upscale and 6% at upscale hotels in the sample.

Among these three chain scales, only upscale saw a year-over-year drop in total C&B revenue RevPAS on a 12-month moving average through June 2017 (-0.3%). But increases in C&B revenue in the upper upscale (+2.6%) and luxury (+0.8%) chain scales lifted total C&B revenue for June by 2%.

Upscale C&B revenue was hurt most by a 4.6% decline in beverage RevPAS; food RevPAS fell by 0.7%. But beverage RevPAS exceeded increases in food RevPAS at luxury (+1.2% beverage to +1% food) and upper-upscale properties (+3.5% beverage to +3.3% food).

On average, per group room night, luxury hotels are seeing $158 in catering-and-banquets food revenue and $29 in C&B beverage revenue, compared to $96 in food and $12 in beverage at upper upscale and $35 in food and $4 in beverage at upscale hotels, based on the STR research sample.

Upper upscale represents “bigger hotels that host larger meetings,” Hanson said. “And the meeting planners … they want experiences to happen, so (they say) ‘Let’s incorporate food and beverage in there. … Let’s do a craft-brew taster, a wine tasting or maybe a cocktail-mixer contest or something.’ And with these trends, really in generating revenues, we’re seeing that contribution across the board.”

In upscale, “these are going to be those smaller meetings that are hosted in these hotels,” Hanson said. “They may not have the options, or even a more limited menu. But their contribution is in other revenues: They’re taking advantage of those service charges, meeting room rentals, etc.”

Looking at June C&B revenue at hotels in STR’s top 10 U.S. markets, on a 12-month-moving-average basis, Dallas saw the greatest increase by percentage (+6.4%), but its absolute RevPAS ($0.63) was the second lowest of the top 10. Hotel News Now