Restaurant RM

RESAURANT REVENUE MANAGEMENT

Historically, table games departments have been one of the hearts of a casino, especially in Asia. In places like Macau, Singapore, and the Philippines, the table games/slot ratio is closer to 80/20, so table games are huge revenue generators in Asia.

Since the highest-betting gamblers are estimated to be worth up to 50 times more than their lower-betting counterparts, casinos want to ensure that these high-rollers always have a seat at the table, even if that freezes out some lower-betting players. With so much money at stake, it is surprising that any casino bases its table game minimums on the judgment of human floor managers.

Although the principles are similar, restaurant RM requires a somewhat different approach than that applied by airlines. The restaurant approach involves implementing the following five-step process:

(1)     Establish the restaurant’s baseline performance.

(2)     Understand the causes for this performance.

(3)     Formulate strategies that will drive revenue to these restaurants.

(4)     When facing the challenging task of implementation, this implementation involves strategies that fall into three categories:

a.       All-purpose strategies.

b.       Strategies to use when your restaurant is busy or “hot”.

c.        Strategies to use when your restaurant is not busy or “cold”.

(5)     Measure whether the strategies were successful or not.

Five key metrics need to be measured -- table occupancy, seat occupancy, average check per person, meal duration, and RevPASH (revenue per available seat-hour, which we define below). All metrics should be calculated by day of week and time of day.

One or more of these three categories -- all purpose, hot strategies, and cold strategies -- can be implemented to improve restaurant operations. Three all-purpose strategies can help restaurants generate incremental revenue regardless of how busy they are. The strategies are (1)

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