Unstable Pricing and the Operational Burdens of Bottled Water in Hospitality

Key Takeaways

• Hotel operating costs are rising four times faster than revenue, and a bottled-water program impacts several categories driving the increase.
  
• Producer prices for bottled water fluctuate month to month; even with a contract, the per-case price a hotel pays might not remain fixed.
  
• The operational cost of a bottled-water program—staff time/labor, and the logistics of shipping, storage, and waste disposal—are often not accounted for in budgets.
  
• While point-of-use filtration systems have costs of their own, they minimize the labor and logistic expenses associated with bottled-water programs while supporting economic best practices.
  

Volatile expenditures can be hard on a business. When inflation and accelerating outflows put pressure on margins, any unexpected rise in costs, let alone a series of them, can mean more operational complexity and less predictable cash flow while hurting profitability. Because a bottled-water program is more than a single line item, a complete accounting of its cost is easy to miss.

Are Hotel Operating Costs Rising Faster than Revenue? What Does Bottled Water Have to Do with It?

In its 2026 State of the Industry Report, the American Hotel & Lodging Association asserts that operating costs are rising four times faster than revenue and three main drivers are labor, property operations, and cost of goods and services.¹ This rise in expenses is a primary reason why gross operating profit per available room (GOPPAR) hasn’t returned to 2019 levels.²

While the outlook has improved since late 2025, CBRE's midyear review forecasts U.S. revenue per available room growth (RevPAR) at just 2.5% in 2026 and 2.1% in 2027, with average daily rate growth (ADR) of 1.7% in both years.³ But the margins may be narrower still, as RevPAR only measures revenue per available room and reveals nothing about actual costs associated with a guest in that room.⁴ A property could, for example, post rising RevPAR while its margins shrink, which is why Alex Coghlin of Duetto and Michael Grove of Hotstats recommend that profit metrics such as GOPPAR and cost per occupied room (CPOR) be considered along with RevPAR for “more sophisticated management discipline.”⁵

Labor, property operations (required storage, waste disposal), the price of goods: a bottled water program incurs costs in all three categories, though it might only get logged in one—as a recurring purchase.  

How Much Does the Price of Bottled Water Change during the Year?

Producer prices for bottled water—i.e., the prices sellers receive for their products—rise and fall every month, sometimes in step with inflation, other times outpacing or lagging behind it. The same can be said of the plastic used to package most bottled water, though according to recent data, these prices have only been climbing.

From March to July 2026, the Bureau of Labor Statistics producer price index (PPI) for bottled water manufacturing rose 4.8%⁶—an increase exclusive of distributor markup, freight and fuel surcharges, and taxes. In four of the five months prior to March, however, producer prices for bottled water declined. Month-to-month changes in the cost of goods can make it difficult to accurately budget for getting cases of bottled water onto a property, since they might be accompanied by additional logistics surcharges, offsetting savings or increasing expenses further. 

At the same time that the PPI for bottled water manufacturing went up 4.8%, the index for plastics bottle manufacturing—the packaging—rose 5.2%, steadily increasing every month.⁷ Producers may absorb additional costs for a time, but at some point the expense is likely to be passed on to a buyer, either midyear or when it’s time to renew.  

Can’t I Negotiate with a Distributor to Set a Case Price for the Year?

Some distributors offer fixed-price terms. It’s important to determine what a contract covers.

• Does the fixed price apply to the product alone, or does it include delivery and/or freight charges?
• Are fuel surcharges excluded? If so, how are they calculated?
• Is the fixed price subject to adjustment based on macroeconomic factors? What triggers an adjustment?
  

Even if a contract locks in an annual per-case price that includes fuel, freight and taxes, the cost of staff labor associated with a bottled-water program hasn’t been accounted for.

Should a Bottled-Water Program Be Reviewed as Part of a Hotel's Labor Budget?

Yes. A dedicated labor budget review isolates the time/payroll burden the program requires, property-wide, giving management an accurate sense of a bottled-water program’s true operational cost, and how it affects revenue. 

For illustrative purposes, let’s assume it takes housekeepers two minutes per room to tend to the maintenance of complimentary in-room bottled water (stocking and restocking, arranging, properly removing the recyclable containers). In a 250-room property operating at 80% annual occupancy rate, two minutes per room equates to approximately 2,433 hours a year. We multiply that by the hourly wage to calculate the total cost of housekeeping labor for a bottled-water program.

We can then work through a similar calculation for the labor a bottled-water program requires in event spaces, meeting rooms, and banquet halls (setting up, collecting and disposing of empties). Finally, we run the calculation a third time for staff involved in procurement and logistics—ordering and receiving shipments, monitoring inventory, distributing stock to sub-storage locations.

Adding the totals from the three calculations together, we get a property’s total expenditure on labor tied to a bottled-water program.

Does Switching to Point-of-Use Water-Filtration Stations Lower a Hotel's Operating Costs?

The exact savings afforded by a point-of-use program, if any, depend on a property's current bottled-water spend, occupancy, and how many point-of-use systems are installed. A hotel going through a few cases per week will see a different result than a 300-room property regularly hosting conferences. Local water and sewer rates are also a factor to consider with point-of-use stations. 

What water-filtration systems lower are the costs specific to a bottle program—staff time/labor, shipping, storage, and waste disposal. If a hotel’s overall outlay is thousands per year, every year, transitioning to customized point-of-use stations in lobbies, event spaces, meeting rooms, fitness centers, and other common areas may justify the capital expenditure to get them up and running just by cutting down on labor costs alone.

→ Explore AquaTru Pro.

FAQs

Does reducing bottled water mean eliminating it entirely?

No. Some properties keep bottled water for specific uses, such as select in-room service or catered events. Hoteliers can choose how much of a program they want to replace with point-of-use hydration stations.

Where does a bottled-water program belong in a hotel budget?

Whether or not a program is part of an F&B budget, it should be broken into three categories to best understand its full cost: labor, the price of goods, and “other” or “general operations.” The initial purchase of the bottled water is then added in “cost of goods,” while the time that staff spend reordering, monitoring inventory, and restocking guest-facing areas gets logged under “labor,” and the storage and disposal of single-use plastic falls into the “other” or “general operations” category.

When in the budget cycle should a bottled-water program be reviewed?

During expense planning, alongside the labor model review. HVS calls this “active asset management,” which “preserves profitability when topline growth turns flat,” enabling businesses to work toward “a sustainable cost structure that protects NOI [net operating income] without compromising guest experience.”⁸

I Want a Customized Drinking-Water Program for My Hotel or Portfolio. Where Do I Start?

AquaTru Pro designs drinking-water programs for single properties and multi-flag portfolios. Whether your goal is to incorporate a standout amenity with a clear, sustainable cost structure to help preserve profitability, or you simply want to use less plastic in your operations, AquaTru Pro’s Multi-Stage Ultra Reverse Osmosis® purifiers and on-wall filtration systems can help make it happen.

Citations

1. American Hotel & Lodging Association, 2026 State of the Industry: From Resilience to Opportunity, January 27, 2026. https://www.ahla.com/sites/default/files/State-of-the-Industry_2026_One-Pager.pdf
   
2. American Hotel & Lodging Association, "2026 State of the Industry," key findings. https://www.ahla.com/resource/2026-state-industry
   
3. CBRE, U.S. Real Estate Market Outlook 2026 Midyear Review: Hotels. https://www.cbre.com/insights/books/us-real-estate-market-outlook-midyear-review-2026/hotels
   
4. Zoghlin, A. and Grove, M., "Why the hotel industry has been optimizing the wrong metric," Hospitality Net, June 18, 2026. https://www.hospitalitynet.org/opinion/4133075/why-e-hotel-industry-has-been-optimizing-the-wrong-metric
   
5.  Ibid.
6. U.S. Bureau of Labor Statistics, Producer Price Index by Industry: Bottled Water Manufacturing: Bottled Water [PCU3121123121120], retrieved from FRED, Federal Reserve Bank of St. Louis, August 31, 2026. https://fred.stlouisfed.org/series/PCU3121123121120
   
7. U.S. Bureau of Labor Statistics, Producer Price Index by Industry: Plastics Bottle Manufacturing: Plastics Bottles [PCU3261603261600], retrieved from FRED, Federal Reserve Bank of St. Louis, August 31, 2026. https://fred.stlouisfed.org/series/PCU3261603261600
   

8. HVS, "Hotel Profitability in Transition: Cost Pressures and Budgeting Priorities for 2026," December 2025. https://www.hvs.com/article/10345-hotel-profitability-in-transition-cost-pressures-and-budgeting-priorities-for-2026