The latest talked about metric in Hotel F&B Operations space is here…#REVPASH !!
Revenue Per Available Seat Hour: Meaning, how much did a restaurant earn by Hour, per Seat; linked to the number of seats available to offer to guests!!
Let’s start with the Positives:
A Stakeholder Metric that helps in having a “Closer” view on the Revenue Generating Capacity of a Restaurant (This can be compared against the estimates that were made when a Business decision was taken; to start the restaurant)
A leveling Metric: The Bigger Restaurants and Smaller restaurants can be brought to a leveled measurement scale. Size of the restaurant is no more a barrier when comparing restaurant that belong to the same Competitive Set!!
The Metric can come handy (when combined with Average covers occupied at any given hour) as a course correction metric: Increase the seat count/size or vice versa. “Seating Efficiency” can be a very useful Metric.
The Metric can be a practical step for any Business minded team: To Measure, Monitor and Do Something to achieve the Minimum to Survive and Adequate to Thrive!!
It helps initiate Hourly Analysis; helping the team in deciding on what Promotions/Specials can be planned for the lean hours to get the Guests into the Restaurant. Eg : a Happy Hour between 3:00-5:00 p.m. as those 2 Hrs are found to yield very low !!
The Metric can drive Teams: The Teams just need to be updated about What the Budget is !! What the current Run rate is & last and most critical: What need to be achieved, daily, for the rest of the week/ month, if they were to meet the budgets!! Even the least denominator who finds it difficult to understand #APC, #ARC can relate…
The Metric also brings visibility to the Outlet Management Team a very important measure: The Number of Operational Hrs that the Outlet is “Active”: Breakfast/Lunch/Dinner & in between. This will help them make business decisions on how many hours to be available for service. Remember: Irrespective of the number of hours you are “Open for Service” one pays the same Rent!!
Decisions relating to adding new Dishes [Economy/ Value/ Premium] offerings, Combos, Deals etc can be taken with REVPASH as a metric. Few Hr Specials can also be a Possibility !!
And may be there are few more that I missed….will add more as they come to mind…
Can’t be used to compare two hotels from a different competitive sets i.e a Fine Dining cannot be compared with a Coffee Shop cum Takeaway and so on
Fails to compare the restaurants where a Typical Meal takes different time frames Eg : A restaurant with 8 Course meal vs one with a pre-plated thali or a Buffet !!
May not work for restaurants where Takeaway Revenue forms a significant chunk!! Also not to miss, Delivery services may not be easy to Benchmark!!
From what has been discussed so far, it looks a No Brainer; To have the Metric on your Performance Dashboard is rather a MUST!! Go Grab IT!! Benefit from IT!!
Last, but not the least, RevPASH can be a critical contributor to achieving Total Revenue Management (#TRM) i.e Maximum revenue from all possible revenue sources : Rooms, F&B, SPA, Banquets, Meeting Spaces etc.