US Accommodation and Food Services Sector

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 770,895 establishments in the US accommodation and food services sector prepare meals, snacks, and beverages to customer order for immediate consumption or provide short-term lodging for travelers and vacationers.

Economic Sensitivity

The accommodation and food service sector is driven by discretionary spending and is vulnerable to economic downturns.

Labor Intensive, High Turnover

Food service and accommodation operations are labor-intensive, and the sector struggles with turnover.

Industry size & Structure
Industry Forecast
US Accommodation and Food Services Sector Industry Growth
Source: Vertical IQ and Inforum

Recent Developments

May 13, 2024 - Sales, Wages and Employment All Rising
  • Employment by the accommodation and food services sector grew 1.7% in April, according to the latest US Bureau of Labor Statistics data. The growth in employment came amid rising average wages, up 4.7% in March year over year to a new high of $18.80 per hour, per the BLS. The sector continues to expand amid sustained consumer spending and demand for hospitality services. Total seasonally-adjusted sales for food services and drinking places were $94.2 billion in February, up 6.8% compared to a year ago and nearly half a percent from the previous month, according to the latest data from the Census Bureau. In the fourth quarter of 2023, accommodation services revenue was $86.2 billion, up 5% year over year and 2.8% from the previous quarter, per CB data.
  • Business travel is approaching pre-pandemic levels as companies send employees back out on the road, The Wall Street Journal reported in April. Corporate travel finally appears to be rebounding, with airlines reporting double-digit increases in revenue from corporate accounts in the first quarter compared to a year ago. Recent data from airlines and hotels suggest that the prediction that Zoom and other virtual meeting platforms would be the end of business travel was premature. Hotel giant Hilton Worldwide’s CEO said in an April earnings call that the resilient US economy and strong employment have helped shore up business travel, with demand from small and medium-size companies already above 2019 levels and large companies getting closer to that mark. Demand for leisure travel recovered in 2022 but dipped slightly last year, according to the American Hotel and Lodging Association.
  • Daily room rates – already near all-time highs this past winter – are expected to rise again this year to cover escalating labor costs, The Wall Street Journal reports. Despite the lodging industry’s recent epic hiring spree to rebuild a labor force that plummeted during the pandemic, hotels are projected to employ nearly 45,000 more employees this year while still employing nearly 225,000 fewer people than the nearly 2.37 million employed in 2019, according to American Hotel & Lodging Association’s 2024 State of the Hotel Industry Report cited by WSJ. Moreover, hotels are projected to pay employees a record of more than $123 billion in wages, salaries, and other compensation in 2024, up from $118 billion in 2023 and $102 billion in 2019, to lure workers to the industry.
  • Restaurant sales are forecast to top $1 trillion in 2024, driven by ongoing employment growth, technology advancements, and expanded use of restaurant apps, according to the National Restaurant Association’s 2024 State of the Restaurant Industry Report. The restaurant and food service industry is projected to add 200,000 jobs this year, bringing total industry employment to 15.7 million. Between 2024 and 2032, the industry is projected to add 150,000 jobs per year on average, with total staffing levels reaching 16.9 million by 2032, per NRA. While nearly eight in 10 restaurant operators predict their sales will increase (33%) or hold steady (45%) from 2023 levels, operators are less optimistic regarding profitability, with only 27% expecting to be more profitable this year. Average food costs have increased more than 20% and average wages more than 30% since 2019, taking a bite out of profits, per the NRA report.
Get A Demo

Vertical IQ’s Industry Intelligence Platform

See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.

Request A Demo