By: Sara Anghel, President & CEO, Greater Toronto Hotel Association

It’s a familiar moment at checkout: after a several-night stay, a hotel guest sees a line on the folio for a local accommodation tax. It’s reasonable to expect that a meaningful share goes toward promoting the destination and bringing in future visitors. In Toronto, however, only about a quarter of net Municipal Accommodation Tax (MAT) revenues goes to Destination Toronto to promote tourism and attract new business. With a municipal election approaching, that small share deserves a closer look.

Under provincial regulations, municipalities without a pre-existing destination marketing program must share at least 50% of net MAT revenues with eligible tourism organizations. Toronto follows a different formula because a voluntary destination marketing fee was already in place before the MAT was introduced. That formula was meant to protect tourism investment by setting a funding floor based on revenues from the previous program, with adjustments linked to provincial tourism receipts. It protects a minimum level of funding, but does not ensure that tourism investment keeps pace with MAT revenues. Toronto consequently directs a much smaller share to destination promotion than municipalities operating under the 50% formula.

There’s much to be gained for Toronto by investing in tourism promotion. In 2025, the city welcomed 28.2 million visitors, generating $9.1 billion in direct visitor spending. Major meetings alone brought in approximately 378,000 delegates and an estimated $982 million in economic impact, according to Destination Toronto. Hotels depend on that business, as do restaurants, attractions, transportation providers and neighbourhood shops.

Maintaining that business requires Toronto to compete on the cost and quality of its offering to event planners. Other destinations are investing in their capacity to attract major events. Austin, for example, is redeveloping its convention centre and already accepting bookings for 2029 and beyond. Toronto needs to give planners compelling reasons to choose our city as they make those same long-term decisions.

We recognize that the City faces budget pressures and has limited taxation tools. Visitors use municipal services, and accommodation-tax revenue helps pay for them. But future revenue also depends on Toronto continuing to attract visitors. Reinvestment in tourism promotion should be evaluated against the business it can help secure and the benefits that spending brings to the wider economy.

A larger share of MAT revenue would give Destination Toronto more capacity to win business through targeted sales efforts and site visits that show prospective clients what Toronto offers. It could also support carefully designed event incentives that strengthen bids. The results should be measured in additional room nights and visitor spending.

The Greater Toronto Hotel Association is asking Toronto’s mayor and council to amend the funding agreement so that at least 50% of net MAT revenues goes to Destination Toronto, with transparent reporting on spending and results. This would give the City more resources to compete for visitor business without increasing the tax paid by hotel guests.

The strongest 2027 budgets will do more than control costs; they will give hotel F&B leaders a roadmap for growing revenue, protecting margins, elevating the guest experience, and preparing for what comes next

By Guy Reinbold

As hotel Food & Beverage leaders prepare their 2027 budgets, it is tempting to view the process primarily as a financial exercise. Review last year’s results, project next year’s revenues and expenses, make the numbers work, and submit the budget. But a strong F&B budget should accomplish much more.

The budget is one of the most important operating plans a Food & Beverage leader will create all year. It should reflect where the business is headed, where opportunities exist, where pressure is likely to emerge, and how the operation intends to balance revenue growth, efficiency, guest satisfaction, and profitability.

The best budgets are not simply forecasts. They are operating strategies expressed in numbers. Here are eight steps to building a responsible F&B budget for the coming year:

1. Start With Revenue Opportunity

Revenue planning should begin with a realistic understanding of the business rather than a percentage increase applied to the prior year.

Historical performance certainly matters, but so do market demand, group and convention forecasts, competitive positioning, seasonal patterns, and the changing expectations of hotel guests. Leaders should look carefully at the revenue potential of every F&B outlet, from restaurants and lounges to bars, banquets, catering, and in-room dining.

The group business pipeline deserves particular attention. A strong convention calendar can significantly affect banquet revenue, staffing requirements, purchasing, and overall departmental profitability. At the same time, leaders should understand where softer periods may require more aggressive local marketing, promotions, or creative programming.

Pricing must also be part of the revenue conversation. Menu price increases may be necessary to offset rising costs, but simply charging more is not a complete strategy. Menu engineering, premium offerings, thoughtful upselling, wine and beverage programs, and special dining experiences can all increase average checks while adding value for the guest.

The objective should be ambitious but credible revenue growth, supported by a clear plan for how that growth will actually be achieved.

2. Manage Labor Without Managing Away Service

Labor remains one of the largest controllable expenses in hotel Food & Beverage, which makes it one of the most important areas of the 2027 budget. The challenge is not simply to reduce labor, but to deploy labor more intelligently.

Staffing plans should reflect anticipated occupancy, outlet demand, banquet activity, and seasonal fluctuations. Wage pressures and market-driven compensation adjustments also need to be acknowledged realistically. Underbudgeting wages may make a financial plan look better initially, but it can create recruiting, retention, overtime, and service problems later.

Cross training can provide greater scheduling flexibility and help managers respond to changing business levels. Training and development should also be viewed as investments rather than expenses that are easy to eliminate. Better-trained associates are more productive, more confident in their ability to sell, and better equipped to deliver the level of service guests expect.

At a point, cutting labor begins to cost the operation more than it saves. When service deteriorates, guest satisfaction, repeat business, check averages, and ultimately revenue can too. The goal is productivity, not simply fewer hours.

3. Protect the Plate and the Profit

Food cost management will continue to require disciplined attention in 2027. Supplier pricing, commodity fluctuations, portion control, waste, purchasing practices, and inventory management can quickly affect margins. Operators should avoid treating food cost as something that is managed only after monthly financial statements arrive. By then, the opportunity has already passed.

Menu engineering should be an ongoing management discipline. Leaders need to understand not only which items sell, but which items generate the strongest contribution to profit. Regular menu reviews provide an opportunity to adjust pricing, modify portions, reconsider ingredients, improve product mix, and remove items that add complexity without producing adequate returns.

Waste reduction is equally important. Small losses repeated hundreds or thousands of times throughout the year become significant expenses. Strong receiving practices, accurate inventories, proper storage, production controls, and consistent portioning all contribute to better profitability without diminishing the guest experience.

Cost control works best when it is part of the operation every day, not a reaction at the end of the accounting period.

4. Do Not Overlook the Beverage Opportunity

Beverage operations can produce some of the strongest margins within a hotel F&B department, but only when pricing, purchasing, inventory, and controls receive consistent attention. Evaluate wine, spirits, and beer programs for both profitability and relevance to the guest. Specialty cocktails, premium wines, upgraded spirits, and distinctive beverage experiences can create incremental revenue while strengthening a restaurant's or bar's identity.

At the same time, beverage profitability can disappear quickly through poor inventory practices, overpouring, breakage, complimentary product, or inadequate controls. The opportunity for 2027 is to combine creativity with discipline. A compelling beverage program can enhance the guest experience and increase spending, while strong controls ensure that additional revenue reaches the bottom line.

5. Make Capital Work Harder

The budget process should also force leaders to look beyond next month or next quarter. Kitchen equipment, point-of-sale systems, restaurant and bar renovations, small wares, service equipment, and other technology investments can require substantial capital. Every request should therefore answer a basic question: What will this investment improve?

The strongest capital requests are tied to measurable business outcomes. A new piece of kitchen equipment may reduce labor or maintenance expenses. A technology upgrade may improve ordering accuracy or provide managers with better information. A restaurant renovation may create additional demand, strengthen the concept, or improve the hotel's competitive position.

Capital should not simply replace what is old. Whenever possible, it should improve business performance.

6. Budget for the Experience You Want to Deliver

One of the easiest budgeting mistakes is protecting obvious operating expenses while reducing investments that make the guest experience distinctive. Menu innovation, associate training, restaurant marketing, service enhancements, quality programs, and guest feedback initiatives all have a role in building a stronger F&B operation.

Guests have more choices, and their expectations keep rising. A hotel restaurant cannot rely solely on a captive audience. Increasingly, it must compete with freestanding restaurants, bars, and entertainment venues for both hotel guests and local customers.

That means the budget should support more than operations. It should support relevance. A memorable dining experience can build loyalty, generate positive word of mouth, increase repeat visits, and create additional spending throughout the hotel. Those benefits may not always appear immediately on a departmental expense report, but they are very real.

7. Build Flexibility Into the Plan

No matter how carefully a budget is constructed, 2027 will not unfold exactly as projected. Economic conditions can change. Energy and commodity costs can rise. Suppliers can experience disruptions. Group business can shift. New competitors can enter the market.

For that reason, every F&B budget should include a contingency mindset. Leaders should understand in advance which expenses are relatively fixed, which can be adjusted, and what actions will be taken if revenues fall short of expectations or costs increase unexpectedly. Scenario planning allows managers to respond thoughtfully rather than react abruptly.

The same discipline should apply when business exceeds expectations. If demand is stronger than anticipated, leaders should know where additional staffing, inventory, marketing, or operating investments can generate the greatest return.

A budget should provide direction without becoming a constraint.

8. The Real Measure of a Successful Budget

The most effective 2027 F&B budgets will bring several priorities together: top-line growth, strong margins, labor productivity, exceptional service, disciplined controls, strategic capital investment, and long-term positioning. None of these objectives exists independently.

Cutting labor too deeply can hurt service and revenue. Raising prices without strengthening value can damage guest satisfaction. Deferring equipment investment may save capital today while increasing labor and maintenance costs tomorrow. Focusing exclusively on cost control can prevent an operation from recognizing opportunities to grow.

That is why budgeting requires more than financial skills. It requires leadership judgment.

A successful budget creates accountability, but it also creates alignment. It connects the decisions made in the kitchen, restaurant, banquet department, bar, purchasing office, and executive suite to the broader goals of the hotel.

As we prepare for 2027, Food & Beverage leaders should challenge themselves to look beyond what the operation spent last year and ask a more important question: What do we want this business to become next year, and what will it take to get there?

When the budget can answer that question, it becomes far more than a collection of numbers. It becomes the roadmap for performance.

HVS and CoStar are pleased to provide you with the quarterly report of the Canadian Lodging Outlook. Each report includes occupancy (occ), average daily rate (ADR), and revenue per available room (RevPAR) for six major markets.

If you would like detailed hotel performance data for all of Canada, CoStar offers their Canadian Hotel Review. The Canadian Hotel Review is available by annual subscription. For further Information, please contact: This email address is being protected from spambots. You need JavaScript enabled to view it. or +1 (800) 613-1303.

HVS Canada performs major portfolio appraisals and single-asset consulting assignments and valuations from coast to coast. Our professional team is expert in appraisal work, feasibility studies, market studies, portfolio valuation, strategic business planning, and litigation support. The managing partners in the Montreal, Toronto and Vancouver practices have their AACI, MAI, and MRICS/FRICS appraisal designations, and all associates are candidate members of the Appraisal Institute of Canada. HVS partners and associates are also members of the Appraisal Institutes of Alberta, New Brunswick, and Nova Scotia. Our bilingual associates enable us to work in French, which is of utmost importance in the provinces of Quebec and New Brunswick.

As hoteliers prepare to celebrate their housekeeping teams next month, recognition should include easier access to the tips employees earn

By Doron Dreyer

International Housekeepers Week, taking place September 13 through 19, 2026, gives the hotel industry an important opportunity to recognize employees whose work is fundamental to virtually every guest stay. With the annual celebration approaching next month, hoteliers are planning appreciation events, employee recognition programs, and other ways to thank the housekeeping professionals who keep guestrooms clean, comfortable, and welcoming.

Those celebrations matter. But in today's economy, recognition should go further.

For an industry that depends so heavily on its frontline workforce, International Housekeepers Week should also prompt hotel owners and operators to ask a bigger question: Are we giving these employees the tools they need to benefit financially from the exceptional service they provide?

For many housekeepers, that starts with making it easier for guests to tip and ensuring employees can access those earned tips when they need them.

Housekeeping is among hospitality's most diverse workforces. While no reliable national study shows precisely what percentage of hotel housekeepers currently send money to relatives in other countries, available research illustrates why remittances matter.

A University of Central Florida-led study of 140 hotel housekeepers recruited through UNITE HERE Local 737 in Orlando found that only 9.5% of participants were born in the continental United States. The remaining participants reported birthplaces including Haiti, Puerto Rico, and Central or South America.

Remittances are an important financial lifeline for many immigrant families. U.S. Treasury data reported that U.S. residents sent approximately $73 billion to family and friends overseas in 2021, with those funds frequently used for necessities including food, education, and medical care. Census research has also found that foreign-born households are far more likely than native-born households to send money abroad.

Why Two Weeks Can Be Too Long

For an employee living close to the financial edge, a tip earned today can matter today. Bankrate research found that 34% of American workers describe themselves as living paycheck to paycheck, rising to 43% among workers earning less than $50,000 annually. According to the UKG Frontline Worker Playbook, most frontline workers live paycheck to paycheck, and low pay is the top reason they consider leaving a job. UKG points to early access to earned wages as one way employers can improve satisfaction, motivation, and retention.

Another UKG study found 65% of frontline workers work long hours to make ends meet, while 60% feel pressured to produce more without receiving more pay. Meanwhile, inflation continues to squeeze household budgets. In a 2025 Bankrate survey, 62% of workers said their income had not kept pace with increases in household expenses caused by inflation.

Against that backdrop, holding an employee's earned tips until the next biweekly paycheck can feel increasingly outdated. If a housekeeper receives a $10 digital tip Monday morning, why should that employee have to wait up to two weeks to benefit from it?

TIPMO by GratifID was designed around a different premise: The worker earned the tip, so the worker should have access to it. Tips appear in the employee's digital wallet as transactions occur, and employees can choose how and when to transfer available funds.

That flexibility can help with groceries, gasoline, childcare, an unexpected expense, or sending money to relatives abroad.

Recognition in a Cashless World

Housekeepers face another challenge that hoteliers cannot ignore: Guests increasingly do not carry cash. A guest may sincerely want to recognize the person who made the room immaculate, replenished amenities, and helped make the stay comfortable. But appreciation does not become a tip when there is no cash in the guest's wallet.

Technology removes that obstacle. With TIPMO by GratifID, for example, guests tap an NFC-enabled smartphone on a TIPMO tag assigned to an employee, choose a tip, and pay using Apple Pay or Google Pay. No app to download, no account to create, and no QR code to scan. The transaction can be completed in seconds.

For housekeeping in particular, that simplicity is important. Housekeepers are mobile employees. They are not standing behind a fixed point-of-sale terminal or waiting beside a restaurant check presenter. NFC technology enables the tipping opportunity to travel with workers.

The Tip Is Also a Data Point

Digital tipping should do more than improve the employee experience. Done correctly, it can give hotel operators information they rarely have.

Cash tips are largely invisible to management. A hotel manager may know that guests are tipping, but they cannot easily see who is being recognized, how often, or whether patterns exist across employees, shifts, and departments. TIPMO changes that through its PULSE analytics dashboard.

Hotel managers can see tip volumes, service ratings, and performance information by employee, department, and location. Each interaction can generate time-stamped data that helps management understand where exceptional service is occurring. That creates a powerful management opportunity.

If one housekeeper consistently receives strong ratings and frequent tips, management has an objective reason to recognize that employee. The hotel can celebrate the performance, learn what that person is doing particularly well, and potentially use those behaviors to coach others.

Conversely, if an employee consistently receives little or no guest recognition while comparable team members perform much better, the data may signal that a conversation is warranted. Low tipping alone should never be treated as definitive proof of poor performance because room assignments, guest mix and other factors can affect gratuity. But combined with guest ratings and other operating data, it can identify opportunities for coaching, training and support.

The objective should not be punishment. It should be improvement. Help employees deliver service guests want to recognize and give employees the opportunity to earn more. That turns digital tipping from a payment tool into a workforce-development and recognition platform.

Put Appreciation Into the 2027 Budget

International Housekeepers Week lasts seven days. The people it celebrates work all year. As hotel owners and operators finalize their 2027 capital and technology budgets, digital tipping deserves serious consideration as part of the employee experience strategy.

The timing is particularly relevant. According to the 2026 Lodging Technology Study, 35% of hoteliers said they planned to add digital tipping in 2026, making it one of the industry's most common planned technology deployments.

TIPMO also does not require hotels to undertake traditional large-scale technology implementation. The platform requires no POS integration or major IT projects — branded NFC tags, employee onboarding, and dashboard access are all designed for rapid deployment.

The benefits reach both sides of the employment relationship. Employees gain an easier way to receive the gratuities guests want to give them, visibility into their earnings, and greater control over when they access their money. Operators gain workforce intelligence, guest service feedback, performance data and new ways to recognize and develop their strongest people.

This International Housekeepers Week, hoteliers should absolutely celebrate their housekeeping teams. Bring in lunch. Hand out awards. Put up banners. Recognize milestones. Thank people personally for the work they do. But then, what happens on September 20?

The most meaningful form of employee appreciation may be creating a system that lets guests say thank you every day of the year and allows the people who earned that recognition to benefit when they need it most. That is recognition with real value.