There are certain areas in which hospitality operators may feel the most inflationary pressure, according to AvendraQS1 2024 Commodity Market Update. Here is a high-level overview of those pressures with suggestions on how to mitigate the impact felt.
Food and Beverage is an area that is still experiencing increased inflation levels. Though the price of pork, chicken and turkey has improved, beef is still experiencing pressure and is expected to remain high.
The American Hotel and Lodging Association suggests easing the strain by offering seafood as a protein alternative and downsizing portions on your menu as well as adjusting menu prices. They also advise looking into ways with your food distributor to maximize your delivery size. In addition, they suggest keeping an “open line of communication with fresh food distributors to reduce supply issues.”
Disposables like paper, resins and towel tissue are expected to have sporadic inflation. The AHLA says this could be anywhere from “3-5% into 2024 as supply chain disruptions stabilize.” There has been more focus on sustainable options in to-go packaging categories, meaning that the raw materials involved in this category like resins, paper, fiber products and pulp will experience price pressure.
The AHLA suggests communicating with distribution for alternatives. In Washington state, a single-use service ware law mandates that businesses can no longer automatically include single-use items in customer orders. Additionally, a new law is going into effect banning polystyrene beginning June 1. Visit our Going Green toolkit for more details on each of these laws and how you can best prepare your business.
Also, connect with our newest allied member, Green Ripple Inc. for sustainable service ware products. They produce innovative, 100% eco-friendly paper products, ranging from food industry essentials to household items, all derived from meticulously selected bamboo fiber. Post-disposal, Nature Bamboo’s products decompose within three to 12 months.
Small wares and equipment are predicted to have between a 3-6% price increase this year because of transportation and labor costs as well as scarcity of raw materials.
To help mitigate the burden, the AHLA recommends planning for increased lead times. Additionally, look into our Going Green toolkit under Utility Rebates, for a list of qualified equipment dealers that can offer you rebates and cost savings.
The cost of amenities in hotel rooms may have increased this year because of negative geopolitical and economic conditions. The AHLA reports that “suppliers are starting to hedge against geopolitical instability” and to “expect increases between 2-12% in 2024.”
Since amenity cost driver trends in 2022 and 2023 have stabilized, this “suggests short-term pricing stability on branded programs.” The AHLA suggests keeping a steady supply of amenities by regularly restocking to help support the business and meet the requirements of your branded program.
If you are part of a branded program but have not fully transitioned yet, work with the sales representatives to help check if you have enough stock, place orders and guide you on how to follow the brand’s standard program to ensure you’re meeting requirements and guidelines.
In Washington state starting Jan. 1, 2027, lodging establishments with 50 or more rooms will no longer be able to offer single-use bottles that are six ounces or smaller, or bars of soap wrapped in plastic. All lodging establishments will be required to comply with the ban starting Jan. 1, 2028. Read more about this new law under the Personal Beauty Products tab in our Going Green toolkit.
To read the full report on inflationary pressures and predictions, visit the 2024 AHLA State of the Hotel Industry report on our members-only section.