US Accommodation and Food Services Sector NAICS 72

Jun 8, 2026 - Teetotaling Diners Threaten Restaurant Profits

• Restaurants profits are drying up as alcohol consumption declines, threatening a key high-margin revenue stream, The New York Times reports. Traditionally, alcohol has generated a large share of restaurant profits, but many operators are reporting a shift toward food-heavy sales, with some eateries experiencing sharp revenue declines or closures. Alcohol sales are down across all restaurant segments, driven by health concerns, generational changes, economic pressure, and the rise of GLP-1 drugs, according to NYT. Younger consumers, especially Gen Z, are drinking less, while older consumers are cutting back. As a result, nearly a third (31%) of operators report severe declines in alcohol sales. Teetotaling diners are creating significant challenges because alcohol is more profitable than food, which has higher labor and ingredient costs. While some restaurants are adding nonalcoholic options or premium, experience-driven drinks, these often do not fully replace lost margins.
• Rising operating costs and ongoing staffing challenges remain top concerns for hotel owners nationwide, even as most expect travel demand in 2026 to remain steady compared with last year, according to a new survey from the American Hotel & Lodging Association. The AHLA survey of 246 hoteliers conducted late February, identified the rising costs for goods, labor, energy, and insurance as the top financial challenges, with cost of supplies and labor the leading concerns for 71% and 65% of respondents, respectively. Workforce shortages are widespread, with more than half of hotels reporting understaffing. To entice workers, hotel operators are increasing wages, offering flexible schedules, and enhancing benefits, further driving up their expenses. Although demand is expected to hold steady or improve slightly, uncertainty remains, with some hotels reporting weaker-than-expected bookings for major events like the 2026 FIFA World Cup.

• Sysco’s $29 billion acquisition of Restaurant Depot will significantly reshape the restaurant and broader food service sector by creating a multichannel distribution model that combines traditional delivery with cash-and-carry purchasing, Restaurant Business reports. The deal gives Sysco, the nation’s largest provider of food and other goods to restaurants and other food service providers, access to Restaurant Depot’s customer base of 700,000-plus independent restaurants and expands its geographic reach through new warehouse openings. Sysco customers, in turn, will have greater flexibility to source products either through bulk delivery or immediate warehouse pickup. For food service operators, the combination could mean lower prices and more purchasing options, faster access to inventory during shortages, and improved supply chain reliability. However, the deal also accelerates industry consolidation, increasing competitive pressure on smaller distributors.
• Producer prices for accommodations rose 5% in April compared to a year ago, after inching up 0.8% in the previous April-versus-April annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices are rising due to a combination of strong demand and high costs for accommodation providers. Employment in the accommodation and food services sector grew 0.9% year over year in April, while the average sector wage rose 4.4% YoY in March to another new high of $20.39 per hour, BLS data show. Minimum wage hikes by states in 2026 on the heels of hourly pay raises last year are driving up the hospitality sector’s payroll costs.