Editor’s Note: Connecting the Dots is a series of monthly conversations with Michael Dominguez, President and CEO of Associated Luxury Hotels International. The series examines issues in the global economy that will “connect the dots” to be helpful not only in business but in life as well.
Well, my favorite topic food and beverage, it's back again. We know this is an important part of our lives, it’s an important part of our food and beverage budget, it’s an important part of an overall meeting experience. It will never go away. Here's what I can tell you and I've often said much of what we try to teach from an ALHI perspective to the meeting planning community is to help you have a conversation with a stakeholder. McKinsey just released their World Food Index in pricing and what that looks like and it is now 24% higher than it was in 2019. The challenge with that is when we started the year it was 20% higher, which means we have moved 4% higher than 2019 throughout the year. So, we are still growing food and beverage at a pretty big clip.
Now, what I can tell you is if you start to dig deeper, nothing is universal. There is nothing that is consistent, so it's important for us to be able to dig a little bit deeper and ask those questions. I'll give you a great example. The one thing that's constant: coffee continues to get more expensive. Coffee will not come down anytime soon and that has to do with droughts in the Ivory Coast. That has to do with literally dry weather conditions that we have in South America. That is going to continue to be a headwind for all of us when it comes to food and beverage pricing and food and beverage inflation. But other things have come down. You know, I joke that nothing was stupider than eggs last year, and the price of eggs actually came down significantly and will continue to come down because we're past the bird flu issue that we had that actually spiked that egg pricing.
But bananas are very expensive, and again, this has to do with weather conditions around the world. That is going to continue to be a push for us. What's my advice for you? I think it's so important for us, and you know we always talk about partnerships in our industry and we have wonderful hotel partners with wonderful experience. I think it's really important to have conversations and to have conversations with the teams, have conversations with the food and beverage teams to understand at any particular time what is more expensive, what is more plentiful, what is easier from a cost perspective with the hotel because it changes from time to time.
Over my time, over the last couple of years, at certain times we've seen a spike with pricing with shrimp, and that has to do with conditions in the Gulf Coast. That isn’t a problem right now. Shrimp is actually one of those items that is consistently coming down. But I know that creates a problem because we have shellfish allergies and that doesn't fit for everybody.
It's complex, and in a complex world, I think it's important to lean on your partners to ask the right questions and to lean on the experts to really tell you where they can help you. At the end of the day, the hotel, yes, they're looking for revenue, but they're also trying to keep their profitability in line. So, the more that you can help them do that by actually getting into a price point with items that will continue to flow the profitability needed to run the operations, everybody wins.
But that requires partnership, that requires open conversation, and that requires a little bit more due diligence on all of our parts. I think it's kind of necessary in this environment, especially around the food and beverage.