The Impact of Liquor Licensing on Hospitality Businesses

At the heart of the Thrive’s hospitality consulting is liquor licensing – for good reason! Most hospitality sector businesses have a liquor license and need that license to be managed.

Hotels, motels, resorts, casinos, cruise ships, restaurants and caterers, pubs, liquor stores and wine stores may all provide unique services to hospitality customers, though the one thing that nearly all of these businesses have in common is the need for liquor licensing. Why? Serving or selling liquor is nearly always good for a hospitality business. Not only does a liquor license boost revenue it also increases the sustainability of a hospitality business. A liquor license enhances the customer experience, opens up new revenue streams and helps sustain hospitality businesses.

Customer Expect Liquor Service

Whether dining, attending an event, watching a live show, golfing or eating in a motel or hotel restaurant, customers place high value on the freedom to consume alcohol. Liquor licensing for BC’s hospitality sector businesses has become a must-have for increased consumer satisfaction.

According to the National Restaurant Association, “Beverages are key to ringing up bigger sales”, 7 out of 10 consumers who drink beer, wine or cocktails say that the availability of alcohol (or lack thereof) would make them choose one restaurant over another. Whether you run a restaurant, resort or theme park, liquor sales provide a competitive advantage. Consumers have so many choices in BC’s hospitality sector, that they have come to expect liquor service or sales as a standard offering.

The hotel bar is becoming a destination for drinkers. According to Nielsen data, hotel drinking outlets are growing faster than traditional on-premise liquor businesses in the U.S. The article surmises that because consumers now wish to drink “wherever and whenever they choose”, hotels will remain a “hotbed of growth within the beverage alcohol industry”. NielsenIQ states that business travelers are a driving force, visiting a hotel bar or restaurant on 67% of trips they take and drinking three drinks per visit on average.

New Revenue Streams for Hospitality Industry Food Services

Alcohol service opens up possibilities for hotels, motels, restaurants, and catering companies. If your hospitality business offers food service, having a liquor license is a no-brainer. Profit margins from liquor sales tend to be astronomical because of the high markup. According to Pour My Beer, profit margins on draft beer are about 80%, 80-85% for liquor, and 70% for wine served by the bottle. The National Restaurant Association estimates that alcohol sales account for 21% of a full service restaurant’s total sales.

A liquor license can create revenue streams that wouldn’t otherwise exist. For example, BC restaurants are permitted to sell both packaged alcohol and single-serving unmixed drinks with the purchase of a meal for take-out delivery. If you think back, you’ll remember that meal and liquor delivery kept many Food Primary licensees afloat during the pandemic.

Hospitality Consulting with a Liquor Licensing Focus at Thrive

Thrive Liquor & Cannabis Advisors offers liquor license focused hospitality consulting to a variety of businesses in the hospitality and tourism sector. If you run a hospitality business and need help with liquor licensing in BC, you’ll succeed with Thrive on your side.