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Restaurateurs Are Leaving Money on the Table.
Cornell Center for Hospitality Research
Tuesday, 1st May 2007
 
Restaurant operators are overlooking a relatively inexpensive way to increase revenue -

A recent analysis found that a surprising number of restaurant operators could boost their revenue at peak periods, just by matching their table mix to their guest mix.

"I examined 68 restaurants, and found that 40 percent of those operations could improve their revenues by 10 percent, 20 percent, or more," Gary Thompson, a professor at the Cornell University School of Hotel Administration said. He explained that the idea makes sense: the number of tables of different sizes should match the number of parties of different sizes.

Thus, if a restaurant mostly serves parties of two, that restaurant should have mostly deuces on the floor. Not only will this improve revenue but it will improve service because guests will not have to wait as long for the right-size table.

The problem is that even though the idea is straightforward, the mathematics of figuring out the best table mix are complicated. Consequently, Thompson created the Restaurant Table-Mix Optimizer tool. This is also free for use on the Center's website, www.hotelschool.cornell.edu/chr/research/tools.html. He analyzed the anonymous data from this tool to determine whether restaurants were attaining their optimum revenue.

"Right now, a surprising number of restaurant operators are leaving money on the table at peak periods, just because they don't have the right size tables for their customer mix," Thompson concluded. "I invite more restaurant operators to use this tool."

The report, "Restaurant Capacity Effectiveness: Leaving Money on the Tables," is available at no charge from the Center, at www.hotelschool.cornell.edu/chr/research/centerreports.html

About The Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the Center's 55 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The Center also publishes the award-winning hospitality journal, the Cornell Hotel and Restaurant Administration Quarterly. To learn more about CHR and its projects, visit
www.chr.cornell.edu.
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