Comparation and contrast with hotels and airlines

[pic 1][pic 2][pic 3][pic 4][pic 5]

Contents

Introduction        

Issue 1        

1.1Revenue management        

1.2Techniques in a fine dining restaurant.        

RevPASH        

Breakeven        

Issue 2        

Comparation and contrast with hotels and airlines        

Reduced sales        

Issue 3        

Special promotional        

Customer References        

Promotions and discounts        

Food festivals        

Networks        

Marketing        

Incentives        

Social media        

Issue 4        

Opportunities        

-The Restaurant is located just 5 minutes from the shopping Centre Broadway        

-Presence of a variety of suppliers according to the requirements of restaurant        

-It has a garden in the rear of the property        

-The property is in an area where there are several bilingual schools        

Threats        

1. Some restaurants competitors are lowering their prices        

Lack of parking        

Issues 5        

Skimming pricing        

Distribution channels        

Telephone application        

Online        

Reasons        

Introduction

        The purpose of the game was to analyze the restaurant "Viva Mexico" in which it is located on Glebe Point Road 163 with a time of 3 pm to 12 pm in which in the last 18 months have decreased their sales and it was requested hiring an expert in the management of revenues which was commissioned to do a market study and find out the reasons why sales are down.

To help the reader will be given a general concept of revenue management and how it could be applied to the restaurants as it has been mostly focused for the management of hotels and airlines, some recommendations, sales strategies and marketing offered to the restaurant viva Mexico with the aim to increase sales.

Issue 1

1.-Describe revenue management and explore the application of revenue management techniques in a fine dining restaurant.

        1.1Revenue management

        The revenue management is a technique of obtaining historical data regarding the activity of the hotel, by analyzing them, interpret trends, calculate forecast etc., and this information is used to implement strategies that lead us to sell more hotel units in the most profitable possible ways appropriate distribution channel and improved efficiency of committees and establish appropriate pricing policies and the improved efficiency of committees and establish appropriate pricing policies depending on demand, and customer segment.

The revenue management for restaurants could be defined as selling the hold, to the right customer at the right price at the right length of time.

        1.2Techniques in a fine dining restaurant.

        RevPASH

The goal or objective of revenue management in restaurants is to maximize revenue per seat available, properly managing the price and duration of the meal. This process is called RevPASH, which comes from the acronym "Seat Revenue PerAvailable Hour" (Kimes & Thompson 2004)

        The following it will show an example:

        [pic 6]

Taking as an example the graph breaks down the results

-How we can observe the hours of 7-8 pm our gross profit is 0 in which indicates that 150 places was available but no client was attended.

-But in the next hour 7-8 pm the restaurant presented 100 clients in which each spending $ 10 representing a total sale $ 1,000 but the cost of food and drinks was $ 300 and our net profit was $ 700.

-In The hours 9-10 pm the restaurant had an occupancy rate of 100% where the total was 150 clients at a cost of $ 10 per customer. The restaurant presented a net profit of $ 1.650 but the cost of food and drinks was $ 495 and as net income was $ 1.155.

-As we can see the seating efficiency of 56% is very low since we have 750 seats available at this time but we had only 420 customers. To reach this result we had to divided "cover served / seats". Besides our revenue per seat hour it is only $ 6. To reach this result we had to divide "total sales / Seats".

[pic 7]

We were able to take decisions which need to form strategies according to the times where you need to increase sales in order to have more profit. As can be seen strategies were taken in the hours 7-8 pm in which sales either by a new marketing strategy as they are considerably increased promotions, happy hour etc. (David & Alisha 2011)

 Other strategies were taken in 11-12 hours pm which is known as the closing time where the main strategy was to offer a complimentary drink and others. The efficiency was 73.3% seating which an increase of 18% was recorded.

Breakeven

The issue concerning to breakeven (Kimes 2011) is of great importance since it serves two purposes: it helps to understand the behavior of costs and expenses and indicates what should be the level of sales in a business so that it will not miss earn money, where it serves as an indicator that also serves to meet the minimum size of a restaurant before it is built. The balance point is the level of sales in which revenues are equal to expenditures.

Issue 2

2. How does the restaurant industry compare/contrast with airlines and hotels in terms of capacity and price management? Explore the issues and challenges of this restaurant and explain why this restaurant is experiencing a significant decline in profits over the last eighteen months.

Comparation and contrast with hotels and airlines

Many of the problems presented by hotels or airlines restaurants can be booked from customers in advance, low-cost competition and a large study of supply and demand must be appropriate for the company, either for a hotel, restaurant to get airline or increase profits in the business. And certainly that more contrast is the use of the distribution channels used to sell seats available or able to sell the rooms they have available to offer clients in this case the hotels. (SMrestaurating 2015)

In definitive restaurants they have to manage rates and prices have in their businesses as happens in airlines. So they will have to study the same issues in both cases:

1. - Seats / Rooms

2. The time is to sell the seat or room available

3. The call for competitors for the same seat / room

Therefore we can find interesting pricing used by airlines to be carried out within the policy of the restaurants, which will impact positively on the quest to maximize revenue is what really matters to the business restaurants.

Differences:

Customers know beforehand the changing and fluctuating prices that occur within the airline sector, they know and choose your best options. The idea is that restaurants can use these techniques and get better opportunities.

     Algorithms. The airlines make use of sophisticated algorithms to calculate the price of their empty seats, a practice that not knowing how to make the restaurants.

     Room Prices based on what the market will bear. The airlines have a price positioning system that is not based on rigidity so in most cases they will not have the problem that there are hotels where many often remain unoccupied rooms. It would be interesting to learn in this regard to achieve the best results.

...