The Role of Technology in Restaurant Revenue Management

Technology systems can support restaurant managers\u27 efforts to improve sales and profits through revenue management. By subdividing a meal into its component sections, a manager can determine which systems to apply at a particular stage for the purpose of providing the greatest revenue benefit for a particular restaurant. In adopting technology, managers must first conduct a financial analysis to determine whether the technology\u27s cost will be more than offset by revenue improvements. If that financial calculation is favorable, management must then consider benefits to both employees and customers and must also take into account employees\u27 and customers\u27 perceptions of the technology\u27s utility and ease of use. Without those elements in place, the technology faces dim prospects no matter what its prospective financial benefit

Pricing and Revenue Management

The focus of this chapter is on the strategic role of price in revenue management (RM). In order to successfully use price as a strategic weapon, firms must address two questions: what prices to charge and how’ to determine which customers or market segments should be offered those prices. In addition, companies must study and understand both customer and competitive reaction to their use of RM pricing. In this chapter, I address these questions through a review of the relevant literature and of current practice

Revenue Management: Advanced Strategies and Tools to Enhance Firm Profitability

Much of the past research on revenue management (RM) has focused on forecasting and optimization models and, more recently, on adaptation of RM to the specific needs in various industries, such as restaurants, car rental, transport and even health care services. Surprisingly, although many industries have become increasingly customer-focused, the customer seems to have been relatively forgotten in this stream of research. Our intent in this monograph is to help explore the role of marketing in RM in more depth

A Retrospective Commentary on “Discounting in the Hotel Industry: A New Approach”

The hotel industry is gradually catching on to this revenue-enhancing technique

Perceived Fairness of Yield Management

Applying yield-management principles to rate structures is complicated by what consumers perceive as unfair practices

The Future of Hotel Revenue Management

What insight do professional revenue management (RM) have about the future? A survey of 487 professionals found the future was going to be much more strategic in nature and will be more strongly driven by technology in which function space will be the new frontier. As technology evolves analytical pricing models and social networking/mobile technology are going to have a major impact on the future. Survey respondents think that the organization of the RM function is going to become more centralized, and that the skills required for a successful revenue manager are going to be a combination of analytical and communication abilities. As a consequence, performance measurement will move to total revenue or gross operating profit rather than by Revenue per available room

The Future of Hotel Revenue Management

A survey of some 400 revenue management (RM) professionals finds that the application of hotel RM has gradually become more strategic and more centralized, but changes in RM practices have come more slowly than expected in the past six years. In particular, an earlier prediction that RM would be applied to all hotel revenue streams remains a work in progress, as does the use of mobile technology and social media as distribution channels. In addition, it is now more common for hotels to establish separate RM departments, as projected. Poll participants in the current research project suggested that, going forward, RM practices will be more fully integrated into all hotel operations, including function space (although these ideas have yet to gain much traction in the industry). These findings represent an update of a similar study on emerging trends in RM conducted by the author in 2010

Customer Attitudes towards Restaurant Reservations Policies

Reservations give restaurants the capability to select the most profitable mix of customers and help them better control their time. Reservations are not without problems because of the uncertainty associated with customers honoring their reservation and with the uncertainty associated with the length of time that customers will use the service. Many restaurants have developed policies to handle these uncertainties; the question is how customers react to such policies. An online survey on customer attitudes towards restaurant reservation policies was conducted in the United States. Respondents considered table-holding policies and credit card guarantees to be the most acceptable and fairest of the five policies considered. Entire party seating policies were viewed in a mostly neutral manner, while respondents had a mixed view of maximum duration policies. Short-show policies were considered to be the least understandable and acceptable. In all cases, customers who were more familiar with a policy were more likely to consider that policy to be acceptable and fair

Revenue Management on the Links: Applying Yield Management to the Golf-course Industry

To maximize golf-course revenue, operators should think of the course’s tee times as finite perishable commodities and golfers as representing highly variable (yet movable) demand

Restaurant Revenue Management

Research in revenue management has traditionally addressed the theoretical and practical strategic problems facing airlines and hotels, among other industries, but it has given little consideration to the restaurant industry. The restaurant business is similar enough to hotel and airline operations that restaurants should be able to apply revenue-management-type practices in a strategic fashion, but the applications have so far been mostly tactical. A broad theory of revenue management would permit restaurant operators to gain the benefits of strategic revenue management that they currently lack