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
Recent Developments
Jul 13, 2024 - Record High Payrolls
- Employment and wage levels in the US accommodation and food services sector are at all-time highs as restaurants and lodging providers staff up for the busy summer months, according to recent data from the US Bureau of Labor Statistics. Sector employment grew 1.3% in June compared to a year ago, and average wages for nonsupervisory employees at accommodation and food services were $19.00 per hour in May, up 4% year over year, according to the BLS.
- The US’s widening wealth gap is expected to be especially evident during this summer travel season, The New York Times reported in July. Wealthier households are more optimistic about their ability to take trips, and the services they are more likely to use — like full-service hotels — are flourishing, while budget hotel chains, by comparison, are expected to report a pullback, NYT reports. “If you go to upscale, you’re actually seeing growth there,” Adam Sacks, president of tourism economics at Oxford Economics, told NYT, adding, “A lot of that has to do with the different financial situations of different income groups.” Full-service hotels are expected to hike room rates by 2.1% this year, while midscale room rates remain flat and rates at economy hotels decline as low-income earners retrench, according to a forecast by hospitality analytics firm CoStar Group.
- Nearly two-thirds (61%) of Americans plan to travel overnight for leisure this summer, and 34% expect to increase their overnight leisure travel this summer compared to last year, according to a survey commissioned by the American Hotel & Lodging Association conducted by Morning Consult in April. Moreover, the poll finds that 31% of Americans say they plan to increase the number of hotel stays this summer compared to last summer. With regard to business travel, 35% of those surveyed say they expect to take an overnight business trip in the next four months, and 16% say they plan to do more business-related travel this summer compared to last summer. However, inflation appears to be a significant obstacle to growth for hoteliers, with 55% of respondents saying inflation will likely reduce their chance of staying in a hotel, down slightly from 56% in January.
- 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.
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