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Revenue Management for Restaurants

Quite often, a hotel restaurant can contribute anything up to 30% of the overall revenue for a hotel, especially if there is more than one outlet.  Whilst we know, understand and apply revenue management practices to influence accommodation revenue, how can we translate those practices in order to positively improve our revenue contribution from our restaurants?  An area that perhaps may be overlooked.

Restaurants can improve revenues in two ways; increase the number of customers served, and/or increase the amount of money each customer spends.  The challenge in a restaurant environment is that the tools and data required may not be as readily available to us, as they are for other areas of the business.  Whilst we may have ‘tested’ the market with a new menu or a price change, the results may not have been measured to any extent to identify the impact on key performance indicators to evaluate the success, if any. 

How do we decide which customers to accept?
Identifying a simple demand pattern, based on the nature and style of the outlet, is a key step in applying restaurant revenue management practices.  From here products can be created and priced in line with demand.  Introducing key performance indicators (KPI’s) into the restaurant space is a step forward in measuring whether your restaurant revenue management techniques are working towards your overall revenue objectives.

Menu Pricing
As well as demand for your restaurant, the price of your menu must also consider two areas; profitability, in terms of food cost, and value for money in line with the service delivery. 

Using techniques such as menu engineering, will assist you in identifying both popular and profitable menu items, all of which will assist you in applying revenue management strategies within the restaurant space.

If you would like to learn more, Octopus Revenue offers a half day workshop focusing on revenue management for restaurants, where you will learn how to effectively manage restaurant revenue by using techniques such as key performance indicators, process efficiencies and menu engineering.  Leave with key takeaways to enable you to apply food & beverage strategies to optimise profitability within the restaurant space.  For more information, please contact us or visit the web-site.

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