How can hotels make money on f&b

Based on results from the first five months of the year, hotels in the United States are on track to report their highest level of rooms booked ever. That's according to data from Smith Travel Research STR , which tracks supply and demand trends in the hotel business. How to vacation like an aristocrat. It's a stunning turnaround for the industry.

Hotels got clobbered in the recession. After years of pre-crisis expansion, bank financing for new construction dried up quickly once the market crashed in and both business and leisure travelers decided to stay home.

Economics working wonders for hotels: The fact that new rooms have been slow to hit the market is also helping. While construction has picked up over past year as banks have become more comfortable with lending for hotel projects, many of those new rooms aren't yet finished, according to Jan Freitag, senior vice president at STR.

Hotels are making a killing right now - Jul. 14,

To that end, occupancy rates for the year through May were at their highest level for that time frame since And with limited supply and high demand comes pricing power. The average daily rate for a hotel room in May increased 4. Investors have taken notice. Christopher Jones, a hotel analyst with Telsey Advisory Group, believes hotels are in a sort of sweet spot in which tight supply coupled with a strengthening domestic economy and an influx of international visitors have finally lifted the hotel sector's profile among investors.

Airbnb not as big a threat as you might think: As for the popularity of room sharing services like Airbnb, Jones feels the jury is still out on whether they will have a real long-term impact on the hotel business.

He said that while Airbnb makes sense right now for leisure travelers visiting an expensive city like New York, once more hotel rooms become available it's possible that those consumers will gravitate back to traditional hotels. And for liability reasons, he thinks Corporate America will never embrace Airbnb. He also noted that it is nearly impossible to utilize for group bookings, which include large events such as conferences and trade shows.

Airbnb fights back against New York. Looking ahead to the rest of , Freitag is confident that it will continue to be a banner year for hotels.

Still, the good times can't last forever. Freitag asserts that when things are going well, hotel operators have historically overstretched themselves by building more rooms than needed.

That in turn lessens their ability to raise room rates. Start your day right with the latest news driving global markets, from major stock movers and key economic headlines to important events on the calendar. Daily newsletter, Sunday through Friday. Most stock quote data provided by BATS.

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