By Silvie Cohen, David Israel
As restaurants emerge from the COVID-19 pandemic, operators remain challenged by nationwide labor shortages, the rising cost of wages, and the increasing cost of goods. To mitigate these bottom-line issues, just like hotels and airlines deploy revenue management techniques to push sales, there are strategies F&B teams can deploy to optimize their top line as well. This article takes you through F&B revenue management tips to help restauranteurs improve profitability.
Top 10 F&B Revenue Management Tips for Hotel Restaurants:
– Prix-Fixe Menus: Explore offering a fixed three-course menu for a set price, which will help drive average check. This is a popular option for weekday lunch as well as weekend brunch (bottomless brunch) or family/holiday meals.
– Dynamic Pricing: Evaluate “surge” pricing based on demand levels or meal period to drive incremental revenue (weekday versus weekend, lunch versus dinner). Given the increased use of digital/mobile menus (e.g. utilizing QR codes), this strategy can be implemented with minimal cost.
– Entrée Additions: Highlight certain additions to entrees on the menu. For example, provide the option to get bacon added to a burger, a fourth taco (if the dish serves three), or egg white substitutions, amongst other combinations for an additional up-charge. If it is highlighted on the menu, guests are likely to order it.
– Time Management: Consider the length of time customers sit at their table to maximize the amount of turns during service. Set table limits or provide express meal options (e.g., one-hour power lunch) to optimize the number of covers the restaurant does during certain meal periods. Offer additional points or incentives via reservation systems (OpenTable, Resy, etc.) to motivate guests to book at “off-peak hours”. Allow guests to pay via mobile QR code to expedite the “check out” process.
– Hotel Cross-Collaboration:
Destination Fees: If the hotel has a destination fee, include F&B offerings within the fee to encourage guests to come to the restaurant. Data suggests a modest discount or free drink/appetizer generates substantial incremental revenue from hotel guests when offered.
Prioritize Hotel Guests: Offer guests priority seating and reservation access to drive covers.
– Competitive Price Shop: Complete a quarterly shop of comparable food, beverage, and event prices within the competitive set. Be sure to evaluate if menu prices are too low or too high and adjust, as necessary.
– Find Menus “Stars”: Evaluate product mix (PMIX) and menu costing to understand which menu items are highly profitable and sell (e.g. French Fries). Train servers to understand which items they should be selling in real-time based on inventory and pricing (e.g. avoid guacamole if there is an avocado shortage). Eliminate loss-leaders during high demand, periods and eliminate menu items that take a long time to cook or require additional culinary/front of house resources to execute.
– Lucrative Happy Hours: Provide enticing happy hour offerings to increase foot traffic in the early hours, post work. Another creative option includes offering a “reverse happy hour” which is reduced pricing during later evening hours (starting at 9PM versus 4PM). Utilize limited menus with enticing offers ($1 oysters, half-off cocktails, etc.).
– Ancillary Spend: Give guests the option to purchase their favorite restaurant items to take home (e.g. homemade cookies, make it yourself pasta kits, Bloody Mary mix, etc.).
– Flexible Seating: Evaluate flexible seating options to ensure four-tops can be turned into two-tops to mitigate lost revenue due to differences between party size and available seating.