Diversification of restaurant ¶revenue today
Before the Covid-19 pandemic, restaurants relied primarily on the direct sales of food and beverages for revenue, but since the pandemic, many have had to diversify their revenue streams to survive. EHL Assistant Professor, Guy Llewellyn writes that restaurants have used traditional methods such as selling branded merchandise and gift cards, but also modern methods such as investing in a food truck as a mobile second location or using vending...
Prior to 2020, most restaurants had a simple business plan: bring people into the outlet, sell food and beverages, manage costs, and maintain good reviews. While profit margins were meager and survival was far from guaranteed, whether from a counter, serving team or take-away window, restaurant business plans were relatively straightforward. Bar and Restaurant reported that pre-Covid, 90% of restaurants operating in America captured 90% of their revenue from this primary channel.
Post-Covid, many restaurants materially have had to change their operations to diversify revenue streams, and despite the eased restrictions, restaurateurs remain risk managers keen to maintain diversity in their revenue streams, no longer comfortable relying on 90% of the sales coming from the direct sales of food and beverage. Diversifying restaurant revenue is nothing new. The sale of branded merchandise, cookbooks, or loyalty and gift cards have been traditional ways of diversifying revenue streams. Today, however, there are other more modern ways of diversifying.
The Hotel Yearbook 2023 - Annual Edition
As we have embarked on 2023, it is evident that the hotel industry has made a robust recovery from the
pandemic.
Occupancy and pricing have returned to their pre-pandemic levels. However, the future of our
industry is contingent
on how nimble the hospitality sector can be in adapting to ongoing innovation, changing market
conditions, evolving
consumer preferences, new staffing challenges, and sustainability realities. These uncertainties are
the new normal
in an unpredictable world.