{"id":2363,"date":"2021-06-17T07:30:51","date_gmt":"2021-06-17T05:30:51","guid":{"rendered":"https:\/\/www.revenueacrobats.com\/?p=2363"},"modified":"2021-06-17T07:30:51","modified_gmt":"2021-06-17T05:30:51","slug":"revpash-cant-see-the-wood-for-the-trees","status":"publish","type":"post","link":"https:\/\/www.revenueacrobats.com\/en\/revpash-cant-see-the-wood-for-the-trees\/","title":{"rendered":"REVPASH…CAN’T SEE THE WOOD FOR THE TREES"},"content":{"rendered":"

This is part 2 of a 4-handed post written with Roberto Bernardi<\/a>, Co-founder\u00a0Restratego<\/a><\/em>, Senior Revenue Manager expert with 20 years of experience in the international chains, and since 2016 focused on F&B and S&C Revenue Management application. Read part 1 here.<\/a><\/em><\/p>\n

<\/h2>\n

Why only looking at RevPASH doesn\u2019t allow you to see the big picture?<\/span><\/h2>\n

Because <\/span>RevPASH is the result of the optimal balance between Average Check and Occupancy.\u00a0<\/i><\/b><\/p>\n

 <\/p>\n

The goal of restaurant revenue management (RRM) is to maximize revenue per available seat hour <\/span>(RevPASH) by manipulating the price and meal duration.*<\/span><\/em><\/span><\/p>\n

 <\/p>\n

*(Sheryl E. Kimes, Richard B. Chase, Sunmee Choi, Philip Y. Lee, and Elizabeth N. Ngonzi, “Restaurant Revenue Management: Applying Yield Management to the Restaurant Industry,” Cornell Hotel and Restaurant Administration Quarterly, Vol. 39, No. 3 (June 1998), pp. 32-39.)<\/span><\/p>\n

 <\/p>\n

The <\/span>meal duration<\/span><\/i> tells us how long a meal takes to be consumed, it is calculated as the time between the moment when the guests left the table – the time when the guests placed the first order for their meal.\u00a0<\/span><\/p>\n

Several strategies can be put in place to control the meal duration for the best revenue return: the first step is to understand the level of demand by day of the week, and by the hour, with the scope to determine the <\/span>hot (high demand) or cold (low demand) periods<\/span><\/i>. (for further insights please refer to part 1 of the series here<\/a>).<\/span><\/p>\n

During the cold periods of demand, we have more time to spend with the customer and our focus should be on increasing the average check using techniques like upselling (e.g. offering wine pairing) or suggestive selling (sales techniques to persuade the customer to consume more e.g. storytelling of the dish).\u00a0<\/span><\/p>\n

During the hot periods of demand, our need is to increase the table-turning, hence the time spent with the customer at the table must be limited. Consequently, we usually avoid any suggestive selling and we implement a shorter menu with a different dish selection and pricing.\u00a0<\/span><\/p>\n

For instance, a restaurant that is usually busy at lunchtime might want to increase the turnover and accommodate more guests. So it will offer a limited or \u201cdaily menu\u201d that allows to speed the service and decrease the meal duration. At dinner on the other hand (cold period), the restaurant will offer a full menu, a la carte options, and the restaurant team will engage more with the customer to increase the average check and improve the overall dining experience.\u00a0<\/span><\/p>\n

Maintaining experience and service quality is paramount <\/b>in both cases (high and low demand).<\/span><\/p>\n

How to make sure you don\u2019t compromise on service quality:<\/span><\/p>\n