Restaurant Capacity Effectiveness: Leaving Money on the Tables

Abstract

In fall 2005 The Center for Hospitality Research (CHR) at Cornell University released the Restaurant Table Mix Optimizer (or RTMO), which I developed. This tool identifies the best mix of tables for a restaurant, based on a variety of inputs. The tool itself is web-based, with the CHR storing users' data anonymously in a database. As of mid March 2007, a total of 1,543 people had registered to use the RTMO. However, not all of those registrants created a valid table-mix scenario. With unusable scenarios eliminated, the final study analyzed the table mixes of 68 restaurants. While eight of the restaurants had the actual optimum table mix for peak operating times, the other 60 restaurants were leaving some money on the table. That is, most restaurants could improve their table mix. On average, the restaurants in this sample could increase their peak revenue by almost 15 percent by implementing a more effective table mix. Almost one-fifth of the restaurants in this sample could improve revenue by more than 20 percent just by having the appropriate mix of right-size tables.