A new study by hospitality intelligence firm, HotStats, has identified that profit per available room in the Food and Beverage department has dropped by 19.6% at regional UK hotels due to declining revenues and increasing costs.

The study, Benchmarking Beyond RevPAR, which polled a sample of nearly 45,000 hotel bedrooms across the UK over a 15-year period, revealed that the Food and Beverage Department now accounts for just 34.3% of total revenue in the Regions and 22% in London.

Food and Beverage Revenue per available room at Regional UK hotels was recorded at £31.65 in 2015, 8.5% behind the peak in 2007 at £34.46, but has recovered slightly from the low of £29.98 recorded in 2011.

At hotels in both London and the Regions, approximately 30% of all Food and Beverage revenue is derived from the conference and banqueting department, with Room Service accounting for 4.2% of all departmental revenue at Regional hotels, compared to 6.7% in London in 2015.

For Regional hoteliers, the growing cost of labour in the Food and Beverage department has been a key challenge to profitability, with an 11.8% increase in payroll recorded over the last 15 years on a per available room basis.

In addition to the increase in payroll, a 7.% revenue decline contributed to Regional Food and Beverage profit conversion falling to 33.8% in 2015 from 39.2% in 2000, which is in spite of savings in Cost of Sales (-1.0 pts) and Direct Expenses (-1.2 pts).

Whilst hotels in London have recorded a similar uplift in departmental payroll over the last 15 years (+11.7%), a 6.2% increase in Food and Beverage revenue has contributed to the capital’s hoteliers recording their highest ever TrevPAR in 2015 at £143.04.

Hotels in London have, broadly, managed to maintain profit margins in the Food and Beverage department, at 37.0% in 2015, compared to 37.2% in 2000. However, at £24.85 in 2015, Food and Beverage revenue was equivalent to just 22.0% of total revenue, a decline from the 25.6% contribution in 2000.

Pablo Alonso, Hotstats chief executive, said: “The growth in Food and Beverage revenue over the last 15 years has been well behind the growth in Rooms Revenue. If it had kept pace, we would be looking at a very different shaped P&L right now with TrevPAR at close to £175 in London in 2015, rather than £143.

“Whilst the current regional picture is slightly more bleak, as it appears the Food and Beverage department has been somewhat neglected in recent years, refocusing resources on this key department presents a strong opportunity to increase its contribution to overall revenue and profitability.”