Recognise this problem? At peak times there aren’t enough chairs or staff to seat all the potential customers – it’s heart-breaking to watch people walk away because you can’t seat them. And at off-peak times, you have a half-empty empty venue that should be earning money – either way, you’re missing sales income! Capacity management for restaurants to the rescue!
If we learn from airlines and large hotels, we can find ways to seat more people in busy and quiet times. We can also find ways to avoid unnecessary discounting, and this can all flow through to a nice increase in total sales. It’s all about ‘capacity management’ and something called RevPASH – Revenue Per Available Seat Hour.
Observe your busy times – how many people are turned away? Now let’s look at the 3 levers available to increase seating and total sales during peak times:
Adjust table sizes – check the average party size you seat – are they mainly pirates of 1, 2, 3, 4 or more? This is lever #1 in capacity management for restaurants.
Do you have enough 2-seater tables to seat small parties, or are the two occupying larger 4-seater tables? You don’t want to be turning away groups because the tables are occupied by one or two person groups.
Is it time to cut down tables, or replace the large tables with smaller ones? That would also mean you can fit more tables in the same space, (not just more chairs) and fill the space more intensively.
Vary the pricing – variable pricing that offers higher prices for popular times is still controversial for many venues, but it’s worth experimenting. One way to do it is to have a different menu for peak times, to avoid comparisons. This is lever #2 in capacity management for restaurants.
Happy Hour pricing can also be used for off-peak times if it increases the total number of customers – some tourist areas do this with special family meals before 6pm.
Fixed price or minimum-spend menus the only option for special occasions like Mother’s Day.
Improve service efficiency – how quickly do you take orders, deliver food & drinks, and then bring the account to the table at the end? And this is not about rushing people! This is lever #3 in capacity management for restaurants.
In a 90 minute dinner, a customer may be spending 10-15 minutes waiting for service or completion – by reducing that you create more table space because they can leave sooner, maybe in 70-80 minutes.
When you add QR code ordering so customers can order more quickly, and reorder when they’re ready.
This is where RevPASH is calculated – if you have 50 seats and you’re serving for 4 hours, that’s 200 seat-hours. You want to have as many of these 200 hours with people in the seats paying money.
More customers can be seated, and fewer will be disappointed because they can’t get in – we’ve all had that experience! More revenue for you from maximising revenue per seat per hour also leads to better word-of-mouth promotion.
It’s time for action…
Adjust your table size and maybe buy some more chairs!
Introduce new menu options to increase prices when it’s busy, and reduce prices when it’s quiet.
Count the cash from increased revenue from the extra people you seat!
Want to get some 1 on 1 help? Talk to one of our coaches
Want the Action Sheet ? Click Here
Recognise this problem? At peak times there aren’t enough chairs or staff to seat all the potential customers – it’s heart-breaking to watch people walk away because you can’t seat them. And at off-peak times, you have a half-empty empty venue that should be earning money – either way, you’re missing sales income! Capacity management for restaurants to the rescue!
If we learn from airlines and large hotels, we can find ways to seat more people in busy and quiet times. We can also find ways to avoid unnecessary discounting, and this can all flow through to a nice increase in total sales. It’s all about ‘capacity management’ and something called RevPASH – Revenue Per Available Seat Hour.
Observe your busy times – how many people are turned away? Now let’s look at the 3 levers available to increase seating and total sales during peak times:
Adjust table sizes – check the average party size you seat – are they mainly pirates of 1, 2, 3, 4 or more? This is lever #1 in capacity management for restaurants.
Do you have enough 2-seater tables to seat small parties, or are the two occupying larger 4-seater tables? You don’t want to be turning away groups because the tables are occupied by one or two person groups.
Is it time to cut down tables, or replace the large tables with smaller ones? That would also mean you can fit more tables in the same space, (not just more chairs) and fill the space more intensively.
Vary the pricing – variable pricing that offers higher prices for popular times is still controversial for many venues, but it’s worth experimenting. One way to do it is to have a different menu for peak times, to avoid comparisons. This is lever #2 in capacity management for restaurants.
Happy Hour pricing can also be used for off-peak times if it increases the total number of customers – some tourist areas do this with special family meals before 6pm.
Fixed price or minimum-spend menus the only option for special occasions like Mother’s Day.
Improve service efficiency – how quickly do you take orders, deliver food & drinks, and then bring the account to the table at the end? And this is not about rushing people! This is lever #3 in capacity management for restaurants.
In a 90 minute dinner, a customer may be spending 10-15 minutes waiting for service or completion – by reducing that you create more table space because they can leave sooner, maybe in 70-80 minutes.
When you add QR code ordering so customers can order more quickly, and reorder when they’re ready.
This is where RevPASH is calculated – if you have 50 seats and you’re serving for 4 hours, that’s 200 seat-hours. You want to have as many of these 200 hours with people in the seats paying money.
More customers can be seated, and fewer will be disappointed because they can’t get in – we’ve all had that experience! More revenue for you from maximising revenue per seat per hour also leads to better word-of-mouth promotion.
It’s time for action…
Adjust your table size and maybe buy some more chairs!
Introduce new menu options to increase prices when it’s busy, and reduce prices when it’s quiet.
Count the cash from increased revenue from the extra people you seat!
Want to get some 1 on 1 help? Talk to one of our coaches
Check the other useful blog posts on the Foodie Coaches website…