3. INTERNATIONAL
WHAT IS “REVENUE MANAGEMENT”?
• Tracking information and applying knowledge to
allocate the right capacity to the right customer
at the right price at the right time
• RIGHT means maximizing potential for the
operator and maximizing value to the customer
4. INTERNATIONAL
THE LEVERS OF GOOD REVENUE MANAGEMENT
REVENUE
MANAGEMENT
MANAGING
DEMAND
MANAGING
PRICE
WAITLIST
MANAGEMENT
DURATION
MANAGEMENT
DISCOUNTING
MENU
ENGINEERING
10. INTERNATIONAL
PERISHABLE INVENTORY
• It’s not just the food – the seat!
– An unfilled seat is revenue lost forever
• Inventory measured in “available seat
hours” (ASH)
• Sample calculation: 110 seat
restaurant, open from 5:00 pm to
12:00 pm Tuesday through Sunday
ASH = 110 x 7 hours x 6 days = 4,620 ASH
per week
11. INTERNATIONAL
IN RESTAURANTS, THE GOAL IS TO
MAXIMIZE REVENUE PER AVAILABLE SEAT HOUR
• Low RevPASH (“Cold” hours):
– Increase demand
– Increase average check through upselling
• High RevPASH (“Hot” hours):
– Increase seat utilization
– Increase price where feasible