Executive Group Travel Blog

The little stuff: How F&B costs can add up and few tricks to keep them closely managed

[fa icon="clock-o"] Feb 5, 2016 11:30:00 AM [fa icon="user"] Marci McCormack [fa icon="folder-open'] Incentive Travel

F&B minimum and what it means for your group:

First, the F&B is always negotiable.  Before you sign any contract make sure you run the numbers of how you are planning to meet the F&B requirement and what qualifies as an F&B expense.  Many times dine-arounds or smaller dinners are not included and only the banquet menu counts towards your F&B.  If you need meeting space the hotel will most likely offer to waive the "rental fee" if you meet an Food and Beverage minimum spend.

Second, many hotels will push multiple on-site dinners.  Don't be afraid to push back.  Present to them what you are "hosting" as a company and see if they can work the F&B around that itinerary.


Little things add up:

Make sure you keep an eye on gratuity rates (sometimes included in F&B minimum, sometimes not).  These can range anywhere from 12% - 30%.  Some hotels will tax the entire F&B amount and also add on the gratuity so on top of food costs you can see almost 35% added.  Make sure you understand the contract and what is included.

Another thing to look at is drinks on consumption versus pre-set cost.  This not only plays a factor in alcohol at dinners and cocktails parties but also coffee breaks during meetings and even water consumption.  We find many US based hotels charge a significant amount for bottled water, one quick trip to elevate this cost is providing all attendees a branded water bottle.  This can be a Yeti, Tervis, Nalgene or any of the additional brands.  The cost of this water bottle can run from $7 each to $40.  But the value is not only a branded gift to your employees but also a replacement for purchased bottled water.  Many hotels will provide filtered water in pitchers on tables and coolers throughout the meeting room for little to no cost.  A perfect example of this is the Wynn in Las Vegas.  Each small bottled water consumed is approximately $6 yet they are happy to provide each meetings table with an endless supply of water pitchers (they even refreshed them every break).  This is a small trick that is a win win for both the attendees and the groups budget.  When dealing with alcohol make sure you understand the make-up of your group before committing to a contact.  If your group is likely to consume more than 3-4 drinks then it might be beneficial to purchase an open bar package.  If not then pay on consumption might be more beneficial to the budget.  Again do a quick cost comparison before committing to a F&B minimum.

Budget Implications:

At the end of the day most groups end up spending significantly over the F&B minimum despite all that goes in to the negotiation process.  The key is to understand what is included under F&B and be aware of those tricky additional costs that can push an event over budget.