Is Your Restaurant Table Turnover Rate Boosting Revenue?
Heard of the magic of the restaurant table turnover rate?
It is one of the most powerful analysis tools to boost revenue in a restaurant.
And restaurant profit margin too.
How is that you ask?
Well, this Recipe 1 of the Ultimate Hotel Finance Training Cookbook is all about restaurant table turnover rate.
And how managing that boosts restaurant revenue.
Click to know more about Ultimate Hotel Finance Training Cookbook.
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This recipe will show in a simple way why restaurant table turnover rate is so powerful.
Still not convinced.
Let’s dive in right away.
Watch Video
Begin by Watching this 2 minute slideshow video
Click to play
This Recipe will cover:
Seats Available and Table Turnover Rate
Let’s begin with Taste Buds Restaurant.
A 40 seat restaurant serving burgers, soup and salads.
Seats Available in a restaurant are the asset that works with Table Turnover Rate.
Seat Capacity and Restaurant Table Turnover Rate
Restaurants may have different meal periods.
However, the seats available remain the same.
We will look at three scenarios of use of the seats available.
Restaurant Table Turnover Rate and Covers Served
Covers Served are the business volume a restaurant generates.
Table Turnover Rate is closely linked to the covers served.
Covers are one of the two major contributors to restaurant revenue (the other is price).
You could call covers served as the utilization of the asset (seats available) in a restaurant.
See below:
Restaurant Table Turnover Rate & Covers Served
Relationship between Seats Available and Covers Served
Table Turnover Rate is related to:
- seats available and
- covers served.
Higher the covers served versus seats available, higher the table turnover rate.
And when the table turnover is higher, we will see the magic happen!
What magic is that, you ask?
That magic results in higher restaurant revenue.
How to Calculate Restaurant Table Turnover Rate
So, how is Table Turnover Rate calculated.
See the slide below on the calculation.
How to Calculate Restaurant Table Turnover Rate
How to Increase Restaurant Revenue
How do we use table turnover rate to increase restaurant revenue?
This is through a process of targeting to serve more covers every day than the seats available.
Higher Revenue through Higher Restaurant Table Turnover Rate
Of course, this targeting has to be followed up with action.
Action begins with setting up a daily covers to be served target.
See Chef’s Take below on some specific strategies to achieve an increase in restaurant revenue.
Chef’s Take - specific strategies to boost restaurant revenue
Types of Restaurants and Meal Periods
Different restaurant types have different table turnover rates.
For example, an All Day Dining restaurant tends to have a higher table turnover rate than a fine dining restaurant.
Why is this?
This is because fine dining meals are longer in duration as they are accompanied by wine or other spirits.
At the same time, table turnover rate is also different for different meal periods.
Breakfast tends to to have the highest table turnover rate.
This is often because a breakfast buffet is laid out.
Meal period duration for a buffet breakfast is shorter than that of an a la carte one.
Dinner meal period table turnover rate tends to be the lowest as the meal is often accompanied by wine or other spirits.
Of course a dinner buffet might make the table turnaround relatively faster.
Table Turnover different for restaurant types & meal periods
How to Increase Restaurant Table Turnover Rate
Here are some strategies to adopt.
Carefully analyze the customers that come to your restaurant.
Are they in groups of 1-2, 3-5 or even higher numbers?
Tabulate how many covers were served for these groups.
Are your table sizes in sync with the group sizes that come to your restaurant?
For example, say, your restaurant covers were achieved more with bigger groups.
If you have more tables of 1-2, then that is a mismatch.
You are clearly leaving money on the table (pun intended!).
Arrange table sizes and take bookings keeping in view a higher table turnover rate.
Bookings are another avenue.
If the restaurant is popular and regularly busy, try and book bigger table sizes.
You can even offer a bigger discount for groups of 5 or more.
Traps to Avoid
Increasing Table Turnover Rate is closely linked to customer patronage.
Merely filling up the restaurant seats is not enough.
Unfortunately, many restaurants fall into this trap.
And then they have difficult maintaining growth in restaurant revenue.
To sustain higher revenue, you have to bump up covers served
This can be achieved through bigger group sizes.
In a way, you are increasing number of customers per table.
This is one way of increasing restaurant table turnover rates.
Other ways are to:
- encourage customers to return
- Provide loyalty discounts
- Create a loyalty card with benefits
- have regular promotional offers
A higher table turnover rate can make up for even a lower price in contribution to restaurant revenue.
What is the Magic of the Restaurant Table Turnover Rate?
Restaurant Table Turnover Rate Magic
- Serving more covers than the seating capacity
- Turning over tables more than once of each seat available
- Using same asset (seats available) multiple times in a meal period
Download PDF of this Recipe for Easy Reference
Ultimate Hotel Finance Training Cookbook Recipe Download
Next Recipe Coming Up
Managing Inventories for a Better Bottom Line
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