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Declining enrollment 'cliff' requires auxiliaries to find new revenue streams

Insights from recent CBORD study suggest automation critical for future

Chris Corum   ||   Jul 31, 2023  ||   ,

Higher ed is facing a ‘demographic cliff.’ According to data from the U.S. Census Bureau, starting in 2025 there will be a steep drop in traditional the college-age population. The reason? Between 2007 and 2020, the U.S. birthrate fell nearly 20%, this will likely translate to fewer students, more competition, and tightening revenues.

The new CBORD Insights™ Student Experience Survey collected data from hundreds of students and administrators at U.S. higher education institutions. A primary finding was that on- and off-campus dining revenue is a major concern as campuses prepare for this declining enrollment. Findings suggest that automation and analytics are key to addressing the issue.

“Most colleges and universities operate their foodservice as a standalone enterprise that is expected to turn a profit year after year,” said Dan Park chief executive officer of CBORD. “Dining services typically represent a significant revenue stream, and the disruption of that income has been a top concern for higher education leadership since 2020, when nearly all residential schools closed in response to COVID-19.”

Departmental leaders ranked exploring new revenue sources as their top initiative, while higher ups ranked it second only to labor-reducing automation.

Staffing shortages and predicted declining dining revenues, find administrators turning to automation to maintain service levels and preserve dining revenue. Initiatives to automate dining operations, create frictionless foodservice, and expand dining options are underway at half the institutions surveyed.

According to the study, half of the respondents have invested in automation in the last two years, and more than half expect to in the next two years. Departmental leaders ranked exploring new revenue sources as their top initiative, while higher ups ranked it second only to labor-reducing automation.

Potential new revenue streams cited include:

  • transaction fees from off-campus dining venues
  • on-campus franchises
  • food delivery partnerships
  • self-service kiosks.

Still, it will not be easy. Further stressing auxiliaries, respondents expect incoming students – accustomed to remote learning – to be less likely to live and dine on campus.

“COVID-19 caused us to reevaluate some major aspects of our financial model and has led to a shift in how we think about on-campus dining,” said Mike Henderson of the University of Tennessee at Knoxville. “We are seeing many opportunities to use mobile technology to collaborate with our surrounding communities to provide dining services.”

To learn more about the results of this survey and other areas covered beyond dining, click here.

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