As per the recent HVS-FHRAI report, the Indian hotel chains soon to generate more income from food and beverage sector (F&B) than room revenues. This is because F&B segment has been continually growing from the last five years, while accommodation revenue has been falling. Nowadays, people prefer restaurants to organize a party, whether it’s small or big, so that’s also one of the main reasons for increasing income.

Talking about last year, the revenue generated from F&B segment that includes banquet and restaurants has hiked to 42.6% against 36.6% in 2010-11. On the other hand, room incomes dropped to 50.9% in 2014-15 from 57.2% in 201-11. Mr. Dipak Haksar, Chief Executive of ITC Hotels and WelcomHotels stated,

“There has been a marked, double-digit growth in food and beverage revenues over the past couple of years. Within the F&B segment, banqueting is showing great potential, which is powered mainly by MICE and this has positively impacted our F&B revenues, boosting overall revenues at ITC Hotels”.

The main income of the hotels across the country has been generated from this segment, which contributes around 35-50% of overall revenues. Commented on this, Mr. Kapil Chopra, President of the Oberoi Group, said,

“For us, the ratio has moved from 35 to 40% on an overall basis. As more and more Indians start dining out, we believe that food and beverage will play a very important role going ahead. To give you an example, Indians only dine out twice a month while the Chinese are dining out 60 times a month”.

Therefore, the hotels are focusing and promoting their F&B through discounts and offer to maintain their topline. So, keeping this in mind, the new hotels in India are coming up with large meeting spaces and restaurants.