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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.

 
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Why the Future of Our Profession Is Brighter Than We Think

By Chef Ben Kiely, Senior Education Administrator & Lead Chef Instructor,

Every summer at the Pacific Institute of Culinary Arts (PICA), our teaching kitchens come alive with a different kind of energy. During our Teen Culinary Camps, young people willingly trade part of their summer holidays for chef Pacific Institute of Culinary Arts (PICA)jackets, aprons, cutting boards and long days in the kitchen.

Some arrive having watched hundreds of cooking videos online. Others have spent years cooking alongside parents or grandparents. A few are simply curious, unsure whether they belong in a professional kitchen at all.

Within a matter of days, something remarkable begins to happen. Their confidence grows. Their questions become more thoughtful. They begin to understand that cooking is about far more than following recipes or recreating something they have seen on social media. It is about discipline, observation, teamwork, problem-solving and repetition.

This year, one thing stood out more than ever not only the enthusiasm, but the numbers.

For an industry that has spent years asking where the next generation of chefs will come from, the answer may already be standing in our classrooms.

After more than a decade of teaching aspiring chefs, this remains one of the most rewarding parts of my profession. Every year I hear concerns from chefs and restaurateurs about the next generation. They are said to lack resilience, patience or commitment. Yet those criticisms have been aimed at almost every generation entering the workforce.

What I see every day tells a different story.

I see students arriving early because they want more practice. I see them staying behind to perfect a knife cut or ask one more question. I see them celebrating one another’s successes and supporting classmates when things don’t go to plan. I see resilience developing through the simple process of trying, failing, learning and trying again.

But when we talk about the “next generation,” we should be careful not to define it purely by age.

The demographic of trade education itself is changing. For decades, university was often presented as the default route to success, while apprenticeships and vocational education were unfairly viewed as second choices. Today, that perception is shifting.

At PICA, we welcome recent high school graduates, university graduates looking for a more practical or creative career, professionals changing direction after years in another industry, international students from around the world and people pursuing a passion for food later in life.

There is no longer one traditional pathway into hospitality.

Some students have dreamed of becoming chefs since childhood. Others discover their passion much later. They arrive with different experiences, expectations and ways of learning, but they share something important: a willingness to learn.

That diversity should be seen as a strength.

One of the greatest advantages today’s students have is access to information. Never before have aspiring chefs been exposed to so much culinary knowledge before entering a professional kitchen. They can watch Michelin-starred chefs online, explore cuisines from around the world through social media and increasingly use artificial intelligence to research ingredients, techniques and culinary science.

But they also learn one important lesson very quickly.

Watching isn’t doing.

The first time a student makes hollandaise, fabricates a chicken, fillets a fish or attempts to temper chocolate, the difference becomes obvious. A video can explain a technique, but it cannot develop muscle memory. Artificial intelligence can suggest a recipe, but it cannot tell you by smell that butter has reached beurre noisette or by touch that a piece of fish is perfectly cooked.

As I often tell my students, social media can inspire a chef, but only a kitchen can train one.

Professional cooking is built through repetition, consistency and experience. Knife skills improve because you cut hundreds of onions. Sauces become consistent because you make them repeatedly. Confidence grows because you experience mistakes, understand why they happened and learn how to correct them.

Those qualities cannot be streamed, downloaded or generated. They are earned.

That reality has also changed the way we teach.

The fundamentals of culinary education remain remarkably consistent, but our teaching methods must continue to evolve. Today’s students often engage best when information is purposeful, concise and immediately reinforced through practical application.

Rather than expecting students to sit through lengthy lectures before entering the kitchen, we can introduce a concept, demonstrate it clearly and allow them to experience it while the information is still fresh.

Explain. Demonstrate. Practice. Coach. Repeat.

Instead of talking about emulsions for half an hour, explain the science, demonstrate the technique and then let students make mayonnaise or hollandaise while an instructor coaches them through the process.

After all, nobody becomes a better cook simply by listening. Learning happens by doing. One comparison I often make with students is that learning to cook is like progressing through the levels of a video game. You don’t begin on the final level.

You learn the controls. You understand the mechanics. You develop skills and gradually take on more difficult challenges.

Culinary education works in much the same way. Knife skills become the foundation for vegetable preparation. Vegetable preparation supports stocks. Stocks become sauces. Individual techniques become complete dishes. Timing develops organisation, and organisation eventually creates confidence.

Students often arrive wanting to recreate the beautiful dishes they have seen online, but they quickly discover that those plates are built on hundreds of smaller skills developed over time.

Before creativity comes structure.

Technique gives students the freedom to create because they understand what is happening to the food and why.

That is also why we should not place too much emphasis on examinations at the beginning of the learning journey. Assessments have their place, but education is about much more than passing a test. The real learning happens in repetition, small corrections, failed attempts and gradual improvements that students often don’t recognise until they look back at where they started.

Once students have a strong technical foundation, we can begin giving them room to think independently. We can challenge them to adapt a dish for a dietary restriction, substitute seasonal ingredients, reduce food waste or create something from limited resources.

There isn’t always one correct answer.

That’s intentional.

Professional kitchens rarely present problems with a single solution. Chefs need to think, adapt and solve problems under pressure. Our goal should not simply be to produce cooks who can follow recipes. It should be to develop cooks who understand why recipes work.

Some of the most valuable lessons come when things don’t go according to plan.

A split hollandaise, an overworked pastry or a broken emulsion can sometimes teach more than perfect execution. Students discover that experienced chefs did not become skilled by avoiding mistakes. They became skilled by making mistakes, understanding them and learning how to recover.

The learning lies in the process, not simply the outcome.

One of the greatest privileges of teaching is watching confidence develop in real time. Students who arrive uncertain about holding a chef’s knife can leave preparing dishes they never imagined they could create. The transformation isn’t purely technical. They become better communicators, stronger teammates and more confident problem-solvers.

Technology will continue to evolve, and students will continue learning from social media, online videos and artificial intelligence. Those can all be valuable resources. They encourage curiosity and expose students to ideas that previous generations may never have encountered.

But technology cannot replace mentorship.

It cannot stand beside a student, taste a sauce and explain what is missing. It cannot notice the hesitation in someone’s technique and show them a better way. It cannot recognise the moment when confidence finally replaces doubt.

Those moments happen between people.

Perhaps the biggest change I’ve witnessed during my career isn’t the students.

It’s the mentors.

Many experienced chefs trained in kitchens where leadership relied heavily on hierarchy, pressure and, at times, fear. Those kitchens produced remarkable chefs, and there are qualities from that era that should never disappear from our profession: discipline, professionalism, consistency, respect for ingredients and attention to detail.

Those standards remain non-negotiable.

What has changed is how we help people reach them.

Today’s mentors can still expect excellence while spending more time coaching than commanding. We can explain the “why,” encourage thoughtful questions and provide honest feedback that gives students a pathway to improvement rather than simply pointing out mistakes.

Students may still hear, “That’s not good enough.”

But that can be followed by, “Here’s why, and here’s how we make it better.”

That isn’t lowering standards.

It’s raising the quality of teaching.

A positive learning environment should never be confused with an easy one. Students still need to work hard. They still need honest criticism. They still need to understand that punctuality, professionalism, cleanliness, teamwork and consistency are essential to success in our industry.

Maintaining high standards and creating a supportive environment are not opposing ideas. In fact, they should strengthen one another.

The strongest kitchens I’ve experienced are not necessarily the ones built on fear. They’re the ones where people push one another to improve because they share pride in their craft and respect for each other.

Every accomplished chef can usually point to someone who invested time in teaching them someone who corrected them, encouraged them and refused to let them settle for mediocrity.

Eventually, it becomes our turn to do the same.

None of this is intended to dismiss the very real challenges facing restaurants today. Operators and chefs are navigating rising food costs, labour shortages, tighter margins, changing consumer expectations and an increasingly complex business environment.

Those pressures are real.

However, if our first instinct is to blame the next generation for the industry’s challenges, we may be asking the wrong question.

Perhaps the better question is: How do we evolve?

Hospitality has always been built on adaptation. We embrace new ingredients, new equipment, new techniques and new ways of serving our guests. We constantly refine menus and rethink businesses to meet changing expectations.

It only makes sense that the way we recruit, teach, mentor and develop people should evolve as well.

Evolving doesn’t mean lowering standards.

It means becoming better teachers, better mentors and better leaders.

Young chefs still need discipline, accountability and honest feedback. They still need to earn confidence through hard work and consistency. Those principles are timeless. But if we can deliver those lessons in an environment that also values respect, communication and mentorship, we won’t simply develop stronger chefs.

We’ll build stronger teams.

I believe the restaurants that succeed in the years ahead will increasingly be known not only for the food they serve, but for the people they develop. Great kitchens attract passionate cooks when high standards and strong leadership go hand in hand.

Every generation inherits the responsibility of leaving this profession stronger than they found it.

Watching our Teen Culinary Camps each summer gives me genuine optimism about that future. Students arrive enthusiastic, curious and eager to learn. They leave with a greater appreciation for the discipline, teamwork and commitment professional cooking demands. Some may become restaurant owners, executive chefs, educators or entrepreneurs. Others may simply leave as more confident cooks with a deeper respect for the craft.

And when I look beyond the camps and across our classrooms, I see people from different generations, cultures and careers united by the same curiosity.

The next generation of chefs isn’t defined by age.

It’s defined by a willingness to learn.

If we continue to combine the craftsmanship of yesterday with the curiosity, technology and fresh perspectives of today, there is every reason to be optimistic about where hospitality is heading.

The tools will change. The technology will change. The way we teach will continue to change. But the qualities that make a great chef curiosity, discipline, resilience, humility and the desire to improve remain remarkably constant.

I believe before we judge the next generation of chefs, we should remember that they are entering an industry and a world the previous generation helped create. Evolving doesn’t mean lowering our standards or abandoning everything that came before: it means having the wisdom to know what is worth preserving, what needs to change, what should be left behind and where we need to innovate.

The next generation isn’t asking us to lower the bar. They’re asking us to show them the best way to reach it. And from what I see every day in our kitchens at PICA, they’re ready.

 
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BALTIMORE, August 4, 2026 – What can a pizza shop teach us about the dramatic shifts taking place in consumer marketing? Quite a lot, actually. New research that focused on pizza delivery has found that consumer impatience is now driving so much consumer decision-making that even location, price, and quality can take a back seat. While this study focused on pizza delivery, the study’s findings have ramifications for all business-to-consumer firms.

The new research published in the INFORMS journal Marketing Science took a closer look at how faster delivery influences consumer choice. The researchers found that consumer impatience –

the desire for rapid delivery – reduces the likelihood that the consumer will comparison-shop, it reduces substitution among sellers, it softens price competition, and it allows lower-quality providers to survive.

The findings challenge conventional wisdom, which holds that faster delivery mostly expands consumer choice and intensifies competition.

The study, “Consumer Impatience, Technological Innovation, and Market Structure,” by researchers from Purdue University, Bocconi University, and the University of Bologna, analyzed nearly 98,000 pizza-delivery orders placed by more than 6,800 consumers across 51 independently owned pizzerias in a major Northern Italian city between 2010 and 2011.

“Our findings challenge the common assumption that faster delivery simply intensifies rivalry,” said the researchers. “Instead, impatience fragments the market, protecting lower-quality providers that rely on proximity while limiting the reach of higher-quality ones.”

The study’s findings show that consumers are highly sensitive to waiting. For the median consumer, a 50% reduction in delivery time is worth more than 20% of the order price. This impatience sharply limits competition, more often giving the order to the establishment which can deliver the product the fastest. The faster delivery time often also negates lowest-price competition.

At the same time, the study authors found that when technology substantially shortens delivery times, however, the market shifts: high-quality firms gain share while many lower-quality establishments exit. So, even while delivery times, combined with consumer impatience, shape the market, the higher quality competitors tend to perform better, ultimately driving lower-quality firms out.

“When delivery time falls by more than 75%, the pattern reverses: market share concentrates among high-quality pizzerias, and many low- and mid-quality establishments exit,” said Rossi. “This is because proximity to the customer is no longer an advantage for some of those lower-quality sellers.”

The researchers also found that the platform consumers use to make decisions and place orders can monetize impatience. Offering a premium delivery service that is 10% faster for an additional fee equal to 10% of the basic menu price increases platform profits by 18.7%.

“For platforms and marketing decision-makers, understanding the dual role of delivery speed is essential,” said the study authors. “Strategies that treat impatience solely as a cost to be minimized may miss both the competitive advantages it provides.”

While this study focused on pizza delivery, the findings of this study add to the empirical research on consumer behaviors in an online world. The same dynamics at play in this study can be transferred to any business that sells products online and relies upon delivery channels.

 
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Why NFC is driving frictionless tipping and becoming a competitive advantage in hospitality

By Doron Dreyer

In hospitality, technology only matters when it improves human connection. When it comes to tipping, that is especially true. As hotels and service businesses continue adapting to a cashless world, operators are increasingly faced with a deceptively simple question: Implement QR code tipping or NFC tipping?

At first glance, both solutions appear to accomplish the same goal. Both are contactless. Both remove the friction of cash. Both allow guests to reward exceptional service digitally. But the guest and employee experience behind each technology is dramatically different, and in 2026, that difference matters more than ever.

QR code tipping helped introduce operators of hospitality entities to digital gratuities. The model is familiar: a guest scans a printed code, waits for a browser window to open, navigates to a tipping page, selects an amount, and completes payment. It works, and for many restaurants or fixed-service environments, it remains a functional entry point into digital tipping. QR codes are inexpensive to produce, simple to deploy, and easy to update.

But hospitality is ultimately built around moments. And every additional step between a guest’s intention to tip and the completion of that action creates an opportunity for hesitation, distraction, or abandonment.

In a busy hotel lobby, a dimly lit restaurant, or after a long travel day, even minor friction becomes meaningful. Older devices, poor connectivity, or unfamiliarity with QR conventions can interrupt the process before a tip is ever completed.

NFC tipping changes that experience entirely.

Using Near Field Communication technology (the same technology behind Apple Pay and Google Pay) guests tap their phone against an NFC-enabled badge, keychain, wristband, or tag worn by a service employee. The tipping page opens instantly. No scanning. No camera. No waiting. The interaction feels natural because guests are already conditioned to tap-to-pay in nearly every other aspect of their lives.

That simplicity has a measurable impact. The fewer barriers between appreciation and action, the higher the likelihood a guest follows through. In an industry where gratuities directly influence employee satisfaction and retention, reducing friction is not a minor operational improvement, it’s a workforce strategy.

Portability is People Pleasing

The distinction becomes even more important in hotel environments where employees are inherently mobile. QR codes are tied to locations: a table, a front desk, a room card holder. NFC tags are tied to people. A valet, housekeeper, shuttle driver, bellhop, or bartender carries their tipping identity with them throughout the property. The interaction becomes personal rather than transactional.

That portability also reflects a broader shift taking place across hospitality. Increasingly, workers want ownership over their professional identity and earning potential. NFC-based systems support that evolution by allowing tipping access to move with the employee across shifts, departments, properties, and even careers. A printed QR code simply cannot offer the same flexibility.

Security is another area where the technology gap becomes impossible to ignore.

QR codes, by nature, can be copied, photographed, replaced, or redirected to fraudulent destinations. For luxury hotels and premium hospitality brands, that vulnerability introduces unnecessary risk. Guests expect secure, seamless transactions, particularly when interacting with digital payment systems.

Modern NFC infrastructure addresses those concerns directly. NFC tipping meets the same security standards consumers already trust in financial transactions. That’s why secure NFC technology paired with encrypted authentication protocols is becoming the new benchmark for hospitality tipping platforms. NTAG 424 DNA chip and its Secure Unique NFC (SUN) message feature is the gold standard in secure physical-to-digital authentication. This is what delivers banking grade security to electronic tipping.

Every interaction is trusted, seamless, and tamper-resistant in addition to being convenient.

None of this suggests QR codes are obsolete. For restaurants with fixed seating arrangements or venues operating under strict hardware budgets, QR tipping can still serve as a practical solution. In many cases, operators may even choose to offer both methods simultaneously, giving guests flexibility based on context and preference. However, the future lies with secure NFC, which can be fully managed on the cloud.

The hospitality businesses leading the industry forward are increasingly recognizing that digital tipping is no longer just about accepting payments. It’s about designing a guest experience that feels effortless while empowering the employees who create exceptional service every day.

QR codes opened the door to digital tipping. NFC is redefining what that experience can become.

As the hospitality industry continues modernizing around mobile-first guest behavior and employee-centered technology, the winners will be the brands that eliminate friction, strengthen trust, and put service professionals at the center of the experience. In that environment, NFC isn’t simply a better technology; it’s a better hospitality solution.

To read a more in-depth version of this article, click here.

About the Author

Doron Dreyer is Co-Founder and CEO of GratifID, a financial technology company building TIPMO, a digital tipping infrastructure for the hospitality industry. GratifID’s innovative payment and engagement technologies are designed to modernize how businesses recognize, reward, and connect with their workforce. Focused on hospitality and service-driven industries, the company’s solutions are built to simplify operations while improving employee experience and guest engagement. Visit www.tipmo.com

 
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Author: John Li, Technology Analyst at IDTechEx

The service robotics industry has grown quickly in recent years, spurred on by advances in robotics technology and artificial intelligence (AI), and is set to alleviate labor shortage issues across multiple industries.

Service robots, as covered in the new IDTechEx report, “”, can be used to automate several industries, including logistics and delivery, cleaning, agriculture, underwater exploration, food service, and social interaction. Although each application presents advantages, their stages of commercialization vary significantly, with some being well-developed, attracting US$ billions in annual revenue, whereas others, despite their huge potential, are still emerging and may only reach full commercialization by the end of the decade. This IDTechEx article examines the winners in the short and long term in the service robots market.

Logistics and Delivery Robots Market to Exceed US$60 Billion in Ten Years

Logistics robots perform many tasks that were initially developed for tightly controlled, standardized manufacturing environments and have since been extended to warehousing, wholesale, and e-commerce sales in the service sector. Among these, Automated (or Autonomous) Guided Vehicles (AGVs) to move cargo, such as crates and shelves, and occasionally people, were first used in the structured spaces of factories and required special flooring for motion guidance. With advances in robotics, these devices require relatively simpler signage, such as floor marking stickers.

They are increasingly able to move autonomously and avoid obstacles in less structured environments, such as airports or large floors. As technologies continue to evolve, the industry has transitioned away from AGVs ‘independent’ or ‘infrastructure-free’ autonomous mobile robots. In the future, can also be used for more complex material handling tasks, and are included in IDTechEx’s forecasts. Overall, the logistics and delivery robots are and will continue to be the largest service robots market, according to IDTechEx’s research.

Cleaning Robots Will be The Second Largest Service Robot Market

Cleaning robots refer to all the robots with the capabilities of cleaning and disinfecting their surrounding environments. The demand for automated, remote, and no-contact cleaning throughout the COVID-19 pandemic resulted in increased interest, with IDTechEx forecasting the market to exceed US$20 billion by 2036.

There are different types of cleaning robots, including robotic vacuum cleaners, deck-cleaning robots, disinfection robots, and many others. While robotic vacuum cleaners are now extremely common globally, deck-cleaning robots and pipe/tube cleaning robots are rarer, although IDTechEx forecasts deck-cleaning robots to become mainstream in the long term. These robots, along with other types of cleaning robots, are analyzed and forecasted in IDTechEx’s new report, “”.

Kitchen Robots Will Grow 20-Fold From a Much Smaller Base

Compared to cleaning and logistics robots, the technical barrier to implementing kitchen and restaurant robots is greater, providing an additional barrier to increased adoption. This has resulted in a lower demand overall for kitchen and restaurant robots, with IDTechEx estimating the market to be worth less than US$50 million, as of 2025. However, owing to a relatively small market in 2025, IDTechEx does forecast an increase in market size of 20 times for kitchen and restaurant robots over the coming decade. Kitchen and restaurant robots include robotic waiters and robotic cooking arms, to fully automated kitchen systems.

Logistics robots and cleaning robots both benefit from high market demand and relatively low technical barriers, compared to kitchen and restaurant robots or underwater robots. Source: 

IDTechEx’s new report, “”, includes emerging technologies and stages of development for each application, regulations around social robots and logistics robots, and financial impacts on the future trends. For each type of robot, potential application areas and companies are analyzed. A 10-year granular market forecast is given for each category of robot, including social robots, delivery and logistics, disinfection and cleaning, agricultural, kitchen and restaurants, underwater, search and rescue, and construction robots.

For more information on this report, including downloadable sample pages, please visit , or for the full portfolio of robotics research available from IDTechEx, see .

 

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