Lodging Segment
The lodging segment was dramatically impacted during the COVID-19 pandemic as personal and business travel halted for months. The total operator retail sales for foodservice operators based in the lodging segment were valued at $24.9 billion in 2020—a $29.1 billion decrease from 2019. Travel activities are picking up in 2021 and sale are expected to increase to $63.9 billion by 2025.
Overall, the lodging segment has seen slowing growth rates, except in 2015 when there was a sharp increase to 7.8%. Post-2015, the growth rates have decreased, with the sharpest drop occurring in 2020 when the segment contracted by 53.9%. Going into 2025, the growth rates are expected to improve, settling at 5.9%.
Across the top 100 lodging companies, the number of properties grew at a rate higher than 2% per year from 2014 through 2019, reaching 30,772. Despite the impact of the pandemic on travel, lodging properties still grew at 1.3% year over year. There were 31,181 properties in 2020.
Hotel occupancy remained relatively stable from 2012 until the pandemic in 2020, when year-over-year change dropped due to travel restrictions. Occupancy has struggled to return to pre-pandemic levels but has increased significantly as of May 2021, with 59.3% growth, compared to May 2020.
Key Segment Trends
- As a way to stay top of mind during the pandemic, some hotel brands have shared recipes for customer favorites. Sharing recipes not only allows operators to remain relevant in a time of low traffic, but also appeals to customers who may be bored with cooking at home.
- Lodging operators are investing more resources toward grab-and-go options by expanding on existing service areas, such as lobbies/pantries, or creating new service areas, such as marketplaces or grab-and-go carts and kiosks.
- In an effort to differentiate and elevate food and beverage offerings, operators are incorporating different proteins into their menus. Offering wild game meats is a way to diversify protein selections and add a unique spin to menus.
- Lodging companies, such as Hyatt, committed to sustainability practices by adding new water stations for refillable water bottles throughout their properties. Sustainable practices are becoming a necessity as consumers increasingly hold operators accountable for their eco footprints.
- Operators are shifting focus among and within service areas, like lobby pantries and in-room services, to meet guest needs. However, these shifts come with financial and operational challenges, such as keeping pantries well-organized and managing room service in a profitable way.
Key Decision-Makers
- Food and Beverage Director—The food and beverage director in charge of foodservice operations would have the strongest voice when it comes to equipment purchases, especially in midscale-tier hotels with full service.
- Operations/Facilities—In larger chains, there may be a corporate function that gets involved in equipment selection.
- General Manager—The general manager tends to be the key decision-maker, especially among luxury-tier operators and midscale operators without full-service food and beverage operations.
- Owner—The owner of the property plays a secondary role in decision-making related to equipment. They may be more prominent in economy-tier operations.
- Purchasing Directors—Purchasing directors don't often have the key role in equipment purchases but could get involved in negotiations.
Role of Equipment Within the Segment
- Lodging operators who choose easily and conveniently accessible, open-front, grab-and-go display units may see a boost in sales from guests looking for on-the-go food options.
- Higher-end lodging operations, in an effort to create a more restaurant-like feel, can use induction cooking equipment that can be used for wowing their guests through demonstrations.
- Equipment specific to food waste reduction can help many of the lodging foodservice operators engaged in food waste reduction and sustainability efforts.
- Lodging operations, especially lower-tiered ones, often have a much smaller kitchen footprint. Compact equipment for heating, storing and cooking can offer solutions to operators unable to afford a larger kitchen space.
Download In-Depth Report for Lodging here
