F&B in Austerity
- 4 days ago
- 5 min read
Retaining Revenue and Community Relevance When Guests Are Not Coming
Your restaurants may be the only part of your hotel that the local community interacts with right now. That is not a problem. It is your recovery strategy.
In the hierarchy of hotel departments, F&B occupies a paradoxical position. It is typically the lowest-margin operation, frequently the subject of ownership complaints about cost overruns, and the first target when operators seek to reduce expenses during a downturn. It is also the single department most visible to the local market, the most emotionally resonant with guests, and the strongest driver of repeat visits and word-of-mouth. During a conflict that has emptied your hotel of room guests, F&B may be the only revenue-generating, community-facing operation you have left.
COVID Taught F&B to Evolve. The Innovations Stuck.
One of the most underappreciated legacies of the pandemic is that F&B revenue models expanded permanently, not just temporarily. The crisis forced experimentation, and much of what was discovered works too well to abandon.
Fine dining restaurants that had considered room service and takeout beneath their brand standards now actively list their menus on delivery platforms like Uber Eats and Talabat. What started as a survival measure became a high-margin revenue channel reaching customers who might never have walked through the restaurant's front door. Hotels that never previously offered targeted catering to nearby offices discovered that corporate clients would pay premium rates for daily meal delivery that minimized employees' need to interact with strangers outside their workplace bubble. That demand persisted long after health restrictions lifted, because the convenience and quality proved their own case. Culinary teams that experimented with nutrition-led fitness programming during the pandemic found that integrating meal plans into wellness memberships created a recurring revenue stream with high margins, strong guest loyalty, and a natural bridge to the hotel's spa and fitness operations.
These innovations survived COVID. They should now be accelerated. In a conflict environment where guests want to stay inside the building and local offices want to minimize staff exposure to uncertain street conditions, every one of these COVID-era revenue centres becomes more relevant, not less.
Service Strategy During Conflict: Consolidation, Not Elimination
As discussed in Article 3, the COVID-era logic of cutting services does not apply during a conflict. The dynamic is reversed: guests want more services, not fewer, because they want to remain inside the hotel’s security envelope. The correct F&B strategy is consolidation (fewer outlets, excellently run) not elimination. With that principle established, the question for F&B during this crisis becomes: how do you retain revenue and community relevance from the outlets you keep open?
Ramadan, Eid, and the Religious Calendar as Revenue Anchors
For hotel F&B in the Gulf, the religious calendar provides a structural revenue floor that the conflict has disrupted but not destroyed. Ramadan 2026 (which began in late February) is normally a peak period for hotel Iftar and Suhoor services, generating premium-priced communal dining from local communities. Eid al-Fitr, expected between March 19 and 21, traditionally drives celebration dining, family gatherings, and hotel brunches that represent some of the highest-revenue F&B days of the year.
The conflict has suppressed these events but not eliminated the underlying demand. Residents still observe Ramadan. Families still gather for Eid. The community's desire for normalcy during the holy month is, if anything, intensified by surrounding instability. Hotels that maintain Iftar services (even at reduced scale, even at accessible price points) serve both a commercial and a community function.
In the Holy Cities of Makkah and Medina, hotel F&B serves an even more essential function: feeding pilgrims who continue to arrive despite the disruption. These are among the few F&B operations in the region where demand has remained structurally supported throughout the crisis.
The Revenue Case
At 15% room occupancy, your rooms department generates a fraction of its capacity. Your F&B outlets, however, have an entirely separate demand base: the local community. In several Gulf markets, we are observing a counterintuitive F&B demand pattern: local dining at hotel restaurants has remained surprisingly stable or even increased. The explanation is partly practical (some standalone restaurants have closed) and partly psychological (a hotel restaurant represents solidity and continuity during disruption).
A restaurant doing 60 covers per evening at an average check of $80 generates nearly $150,000 per month in revenue, of which $60,000 to $70,000 flows to GOP after direct costs given that labour is already covered by your retained skeleton crew. That may not save the hotel. It may extend your cash runway by the weeks that matter.
Delivery, Dark Kitchens, and Institutional Catering
If your hotel did not build a delivery capability during COVID, build one now. The infrastructure investment is minimal: a packaging strategy, a delivery logistics partner, and digital ordering channels. Dark kitchen models (using your underutilized kitchen to produce delivery-only concepts under separate branding) generate incremental revenue with minimal additional fixed cost.
The institutional demand segments described in Article 8 all need food service. Government offices, NGO operations, and corporate relocations often operate from temporary facilities without kitchens. Your catering capability can serve them through daily meal contracts, event catering, and meeting-room service packages. This business is recurring, predictable, and often contracted on monthly terms that provide cash flow stability.
Community Memory
When this conflict ends (whether in weeks or months) the local community will remember which hotels stayed open. They will remember which restaurants served them during difficult times, which properties contributed to community feeding programs, which brands showed up when the city needed reassurance that some things were still working.
That memory converts directly into commercial advantage during recovery. Consider allocating a modest portion of your F&B operation to visible community engagement: staff meal donations to organizations supporting displaced families, partnerships with local food banks, complimentary coffee service for first responders. The direct cost is small. The reputational return is disproportionate. And in a region where personal relationships and community standing are commercial currencies, the hotel remembered as a community anchor during the crisis will be the first choice for local celebrations, corporate events, and dining when the crisis is over.
When this conflict ends, the local community will remember which hotels stayed open. That memory converts directly into commercial advantage during recovery.
F&B is where the tension between operator cost instincts and owner value preservation is sharpest. Operators see F&B through a cost lens during a crisis: close outlets, reduce menus, cut labour. Owners should see F&B through a positioning lens: the restaurant is the one part of the hotel the local community experiences. The asset manager’s role is to ensure F&B decisions are made with the recovery in mind, not just the current quarter’s P&L.
Adnan Shamim
Managing Partner, Middle East & Africa
Duncan Kinnear
Hotel Asset Managerer
QUESTIONS FOR YOUR NEXT OWNERS’ MEETING
1. Have your COVID-era F&B innovations (delivery apps, office catering, wellness meal plans) been sustained and expanded?
2. Are you maintaining Iftar and Eid programming? If not, what is the cost vs. the revenue and goodwill it generates?
3. Do you have a delivery capability? If not, what would it take to launch within two weeks?
4. Are you actively pursuing institutional catering contracts with government, NGO, and corporate segments?
5. Will the local community remember your hotel as one that stayed open and showed up?
The next article addresses a topic that is uncomfortable but essential: the ethics of revenue
management during a crisis, and the guardrails that asset managers must set.
