Restaurant Revenue Management

Abstract

Revenue-management tools can be used by restaurant managers to analyze the effects of process-control changes. A dinner house seeking to shift demand and to achieve greater facility utilization during busy times analyzed the factors that caused delays in the service process—and thus increased the guest queue. Although the restaurant was able to hasten the actual dining time, much of the slack was found in the processes that occurred before and after the actual dining period. Moreover, the restaurant managers were able to analyze customer-arrival and market-mix data in relation to the restaurant’s table mix. Seat occupancy was improved by matching the table arrangement to the customer mix, and table turns were increased by improving the kitchen operations so that front-of-the-house functions could be tightened up. In particular, end-of-meal steps were speeded up. As a result of its process improvements, the restaurant enjoyed revenue growth greater than that of comparable restaurants.