How Much Should Hotels Expect to Pay for Good Quality Tea?

Tea can look like a very small line on a hotel’s purchasing spreadsheet. But the cheapest tea is not necessarily the lowest-cost option — and the most expensive tea is not automatically the best.

For hotels, the useful figure is cost per serving.

A difference of a few pence per cup can significantly improve the quality of tea being served while still leaving a very healthy margin.

What affects the price of hotel tea?

Several things influence what a hotel pays for tea:

·       the quality and origin of the tea

·       whether it is loose leaf or bagged

·       the quantity of tea inside each bag

·       whether tea bags are individually wrapped

·       packaging materials

·       order volumes

·       whether the supplier provides training or menu support

·       whether bespoke blends or private-label products are required

This means comparing two suppliers purely on the price of a box can be misleading.

One tea bag may contain considerably more tea than another, for example, or one product may be designed specifically to brew a full hotel teapot rather than a single mug.

Think about cost per guest

The simplest comparison is:

Price paid ÷ number of servings = cost per serving

Imagine two teas.

Tea A costs 14p per serving. Tea B costs 22p per serving.

At first glance, Tea B is more than 50% more expensive. But if the hotel sells the finished pot of tea for £3.50–£5.00, the difference to the hotel is only 8p.

That extra 8p may provide better-quality tea, better presentation and a noticeably better experience for the guest. For most hospitality businesses, that is the calculation that matters.

Why is hospitality tea often more expensive than supermarket tea?

Tea designed for hospitality is not necessarily the same product you will find on a supermarket shelf.

Hotels may require:

·       individually wrapped tea bags for bedrooms

·       larger bags designed for teapots

·       foodservice-sized packs

·       consistent supply throughout the year

·       specialist blends

·       plastic free tea bags

·       staff training material

·       tea menus and guest information

·       commercial account support

The product itself is therefore only one part of the cost.

Tea bags or loose leaf: which costs more?

It depends.

Loose leaf can offer very good value because you are buying tea without the additional cost of individual bags and wrappers. However, hotels also need to consider the operational cost.

Loose leaf requires:

·       accurate portioning

·       suitable infusers or teapots

·       more staff knowledge

·       additional cleaning

·       slightly more preparation time

For afternoon tea or a specialist tea service, these additional steps may be completely worthwhile. For a busy breakfast service, a high-quality tea bag may provide better consistency and speed.

There is no universally better option. The right format depends on where and how the tea is being served.

Don't overlook the quantity of tea in the bag

This is one of the easiest things to miss when comparing suppliers.

Two tea bags may look almost identical but contain different quantities of tea. That becomes particularly important when tea is served in a pot.

A tea bag designed for a mug may struggle to produce enough flavour in a 400–500ml teapot. Staff then compensate by adding a second bag. Suddenly the supposedly cheaper option costs twice as much.

When comparing tea suppliers, ask: How much tea is actually contained in each bag, and what volume of water is it designed to brew?

Bedrooms are different from restaurants

Tea in a hotel bedroom has different requirements from tea served in the restaurant.

Individually wrapped tea bags make sense in bedrooms because they protect the tea, are easy to replenish, provide clear identification, reduce handling and keep the hospitality tray tidy.

In a restaurant or breakfast room, individual wrapping may not be necessary. Using different formats in different areas of the hotel can therefore make more sense than insisting on one format everywhere.

How much margin is there in tea?

Tea generally has a relatively low ingredient cost compared with the price charged to the guest. That means there is often room to improve the quality of the tea without materially affecting the profitability of the drink.

If moving to a better tea adds 5p or 10p to the ingredient cost of a pot, that increase is small compared with the overall selling price.

The bigger question is therefore: Does saving a few pence on the tea justify compromising the guest experience?

In some operations the answer may be yes — particularly where price is the main consideration. In premium hospitality, it often isn’t.

The hidden cost of poor tea

Hotels naturally monitor purchasing costs. But poor tea can create costs that are much harder to see on a spreadsheet.

Guests may:

·       leave tea unfinished

·       order less frequently

·       choose coffee instead

·       comment negatively on breakfast

·       question why a premium hotel is serving an ordinary supermarket-style product

Tea is a relatively inexpensive part of the overall guest experience, but it is something many guests consume every day. That makes it disproportionately visible.

What should hotels compare when choosing tea?

Rather than simply asking for the cheapest price, compare:

·       cost per serving

·       quantity of tea per bag

·       recommended brewing volume

·       tea quality

·       range available

·       packaging format

·       minimum order quantities

·       delivery costs

·       staff training

·       menu support

·       sustainability credentials

·       reliability of supply

A slightly more expensive product can sometimes prove better value once all of these factors are considered.

So how much should a hotel spend?

There isn't one correct figure.

A budget hotel providing complimentary bedroom tea has very different requirements from a five-star property offering afternoon tea.

The objective should be to find a tea that fits the quality of the overall guest experience while still providing an appropriate commercial margin.

For many hotels, increasing tea quality costs surprisingly little when measured per guest.

The important thing is to stop comparing tea by box price and start comparing it by cost per serving and quality of experience.

Need help working out your current tea cost?

At Shibui Tea, we work with hotels, restaurants and hospitality businesses to build tea ranges around the way they actually serve tea.

If you’re reviewing your tea supplier, send us details of your current range, pack sizes and prices and we can help you compare the real cost per serving.

No complicated spreadsheet required.