The Impact of Customer’s Party Size on Restaurant Revenue

Abstract

Restaurant managers seeking to maximize revenue should look carefully at how long their tables are occupied and how much the average diner spends. This study examined the effect of the customer's party size on restaurant revenue. The dining periods were divided into 2 types (lunch vs. dinner/weekdays vs. weekends), which were combined to show the average spending per minute (SPM), to determine if the dining periods have measurable effects on the dining duration and average bill. The results show that the dining duration for dinner was much longer than that for lunch and there was no significant difference in dining duration between weekdays and weekends. On the other hand, customers in larger parties at lunch time had a higher SPM than those in smaller parties. A larger customer party size was associated with a longer dining duration for dinner and on weekdays. During all operating periods (lunch, dinner, weekdays, weekends), the party size had a significantly positive effect on the mean spending per minute. For restaurant managers, these findings suggest opportunities to increase revenue and adopt revenue management strategies.