The future of distribution management in the restaurant industry

Abstract

Restaurants that take reservations have traditionally had complete control over their distribution and have relied on customers calling the restaurant to make reservations. Restaurant distribution is rapidly changing as third-party reservation sites such as OpenTable.com and http://UrbanspoonRez.com have entered the market and restaurants offer online reservations through their own websites. The emergence and popularity of these sites offers the possibility for true distribution and revenue management to evolve in the restaurant industry. In the future, the use of mobile reservations applications and third-party sites will continue to grow as restaurant IT systems begin to become more integrated. This trend has considerable implications for the way in which restaurants will manage their distressed inventory through both allocations and coupon promotions and in how they manage their revenue. The challenge for Revenue Management researchers and practitioners is to understand how best to apply the lessons learned in other industries to the emerging distribution and revenue management issues in the restaurant industry.