Wasted millions: Revenue management in Dutch culinary restaurants

Abstract

The concept of revenue management is widely adopted in various industries including the hospitality industry. Yet, its application to the restaurant industry has been limited. Especially culinary restaurants appear to be a somewhat unexplored area of study, thus indicating a gap in the literature for restaurant revenue management. No previous research in the Netherlands has included culinary restaurants as a separate category in studies on restaurant revenue management. The research method is a case study approach leading to explanatory interviews, in addition to the experience of two of the authors themselves with over a total of 25 years of experience in the culinary restaurant business in the Netherlands. Eleven key stakeholders representing the Dutch hospitality and restaurant industry were interviewed. The interviews were then analysed and conclusions drawn. Dutch culinary restaurants do not consciously practice revenue management and thus do not have a strategy for it. This means that if culinary restaurants in the Netherlands could achieve the 2–5% revenue improvement that is typically associated with the application of revenue management, overall revenues could be increased by eight million Euros annually, almost all directly added to the bottom-line of these businesses.

Keywords: financial management, restaurant management, Dutch fine-dining restaurants, increased profits