Abstract
The field of restaurant revenue management (RRM) combines elements of demand management with concepts of supply management to provide both a theoretical base and an operational plan to maximize the revenue a restaurant can make. This chapter focuses on the demand side of RRM. RRM aims to increase top-line revenues generated by an operation and has traditionally focused primarily on front-of-house concerns. The demand management side of RRM combines traditionally different operations management (e.g., forecasting) and marketing (e.g., pricing) methods and techniques to influence demand in a way that maximizes revenue per available seat hour. For most RRM analyses, determining the overall average party size distribution is sufficient, although atypical or demand-stimulating events (e.g., a children-eat-free promotion or 2-for-1 coupons) should be analyzed separately. The time horizon of the forecast is a basic consideration in evaluating a forecast for RRM purposes. The demand side of RRM is concerned with the number, type, and profitability of customers that frequent a restaurant.
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