Picture in your mind the monthly P&L meeting.
The average beverage check is down 20%. The F&B management team is asked to explain.
At the same time, food cost as a percentage of food sales has improved. The kitchen gets praised. The Executive Chef is happy.
What gets less attention is that the non alcoholic drinks sold in the bar are included in food revenue.
The bar made them. The bar served them. But when the hotel reviews its food cost percentage, those drinks help make the kitchen’s figures look better.
Before we question the bar’s performance or congratulate the chef, we need to understand what those figures are telling us.
A falling beverage check does not always mean guests are spending less on drinks. And an improving food cost percentage is no proof that the kitchen is performing better.
Guests are changing what they drink
IWSR reports that global alcohol volumes fell by 2% in 2025, the third year of decline in a row.
Its 2026 Bevtrac research across 15 markets adds context. Alcohol participation held broadly steady, at 76% against 75% three years earlier. But the average number of drinks per occasion fell from 4.4 to 3.9.
Managers in the hotels I work with describe the same change. More guests are switching part of their evening from alcohol to non alcoholic drinks.
That changes the sales mix. It also changes how performance appears in the P&L.
Where the drinks revenue goes
Under the Uniform System of Accounts for the Lodging Industry (USALI), the hotel industry’s standard for reporting its accounts, food revenue includes non alcoholic drinks such as coffee, tea, juices and soft drinks.
This creates a practical problem when we use the food revenue and cost lines to judge kitchen performance.
In the P&Ls I have reviewed this year, non alcoholic drinks have no separate line. Their contribution sits inside Food.
The revenue has been recorded. What the summary does not show is the split between food menu performance and non alcoholic drinks performance.
Why the kitchen can look better without anything changing
In the hotels I have reviewed, non alcoholic drinks carry a lower cost of sales percentage than the food menu.
As their share of food revenue grows, the combined food cost percentage falls. That can happen without any improvement in portion control, purchasing, waste or menu pricing.
Kitchen labour can also look more efficient if it is measured against food revenue, while the labour used to prepare and serve those drinks stays with the bar.
The improvement in the combined ratio is real. Giving the kitchen the credit for it is where the reading goes wrong.
A lower reported food cost percentage can even hide rising plate costs.
A worked example: one restaurant, 100 covers a day
Take a restaurant serving 100 covers a day, with food menu revenue unchanged at US$4,000.
Assume cost of sales is 30% for the food menu, 15% for non alcoholic drinks and 25% for alcohol. These are illustrative assumptions, not benchmarks.
| Per day, US$ | Before | After | Change |
|---|---|---|---|
| Food menu revenue | $4,000 | $4,000 | no change |
| Alcohol revenue | $1,500 | $1,200 | down 20% |
| Average beverage check (alcohol revenue per cover) | $15.00 | $12.00 | down 20% |
| Non alcoholic drinks revenue, booked in Food | $500 | $900 | up 80% |
| Total drinks revenue | $2,000 | $2,100 | up 5% |
| Total drinks spend per cover | $20.00 | $21.00 | up 5% |
| Reported cost of food sales | 28.3% | 27.2% | down 1.1 points |
| Food menu cost percentage | 30.0% | 30.0% | no change |
| Total F&B revenue less cost of sales | $4,350 | $4,465 | up 2.6% |
Look only at the average beverage check and the reported food cost percentage, and it is easy to conclude that the bar is struggling while the kitchen is improving.
Look at the full picture and the conclusion changes.
Guests are spending more on drinks. The food menu cost percentage has not moved. Total revenue less cost of sales has increased by US$115 a day.
That last figure is before payroll and other operating expenses. It does not prove that operating profit has increased, but it does show why the first reading of the numbers is incomplete.
Three numbers to check this month
Take last month’s figures for one restaurant and work out the following.
- Food menu cost percentage. Remove non alcoholic drinks from both food cost of sales and food revenue, then divide the remaining cost by the remaining revenue. If the food menu cost percentage is higher than the reported food cost percentage, non alcoholic drinks are lowering the combined ratio. Track both over time to see what is driving the improvement.
- Total drinks spend per cover. Add alcoholic and non alcoholic drinks revenue, then divide by the same restaurant cover count. If total drinks spend per cover holds steady or rises while the average beverage check falls, guests are keeping their drinks spend through a different mix of orders.
- Non alcoholic share of drinks revenue. Divide non alcoholic drinks revenue by total drinks revenue. Track this alongside the other two figures. It shows how much of the change in reported performance comes from the drinks mix.
The Director of Finance and the Director of Food and Beverage can start this work now, using point of sale categories, recipe costs and reconciled reporting.
What I would change in USALI
The 12th Revised Edition of USALI had an adoption date of 1 January 2026. Consistent reporting and comparison across hotels remain central to its purpose.
My proposal is to make non alcoholic drinks visible in the standard reporting structure, with their own revenue and cost of sales lines. That would give three clear categories: Food, Non Alcoholic Beverages and Alcoholic Beverages.
Hotels could still report the combined totals. But owners and operators would also be able to separate kitchen performance from changes in the drinks mix.
Individual hotels can build that analysis today. Comparison across the industry needs consistent definitions and reporting.
Before the next P&L meeting
When the beverage check falls, ask what happened to total drinks spend per cover.
When food cost improves, ask what happened to the food menu cost once non alcoholic drinks are removed.
Then decide what deserves praise and what needs attention.
Should USALI give non alcoholic drinks their own revenue and cost lines, require a separate breakdown within Food, or leave it to each hotel?
If you run these checks, I would welcome what you find. No hotel names needed, just the numbers.
