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Small Queuing Restaurant Sustainable Revenue Management

Author

Listed:
  • Kwangji Kim

    (Business Research Center (Global Maritime Tourism Research Center), Pukyong National University, Busan 48513, Korea)

  • Mi-Jung Kim

    (Institute of Economy Business Strategy, Dong-Eui University, Busan 47340, Korea)

  • Jae-Kyoon Jun

    (Department of Business Administration, Pukyong National University, Busan 48513, Korea)

Abstract

When competitive small restaurants have queues in peak periods, they lack strategies to cope. However, few studies have examined small restaurants’ revenue management strategies at peak times. This research examines how such small restaurants in South Korea can improve their profitability by adapting their price increases, table mix, and the equilibrium points of the utilization rates, and reports the following findings based on the analysis of two studies. In Study 1, improving profitability by increasing prices should carefully consider the magnitude and timing. In Study 2, when implementing the table mix strategy, seat occupancy and profit also increase, and we further find the equilibrium points of the utilization rates. Under a queuing system, the utilization rate and average waiting time are also identified as having a trade-off relationship. The results provide insights into how managers of small restaurants with queues can develop efficient revenue management strategies to manage peak hours.

Suggested Citation

  • Kwangji Kim & Mi-Jung Kim & Jae-Kyoon Jun, 2020. "Small Queuing Restaurant Sustainable Revenue Management," Sustainability, MDPI, vol. 12(8), pages 1-14, April.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:8:p:3477-:d:349848
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    References listed on IDEAS

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    Cited by:

    1. Mohit Tyagi & Nomesh B. Bolia, 2022. "Approaches for restaurant revenue management," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(1), pages 17-35, February.

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