RevPASH Calculator

RevPASH (Revenue Per Available Seat Hour) - is an important measure that helps restaurant operators understand how well each seat in a restaurant generates revenue. This RevPASH app is a great tool that provides an operator with a quick way to input a few relevant numbers and calculate RevPASH.

The application allows the user to edit the various variables that are used in calculating RevPASH and see the resulting change. There are two methods of calculating RevPASH,

The application has the ability to compare RevPASH over different times and different days, weeks, and months. This allows a restaurateur to fine-tune operations by using appropriate techniques to best manage the restaurant when busy and better fill the restaurant when slow.

Restaurant operators will be able to quickly understand the efficiency of the seats in their restaurant, therefore helping operators determine areas of their operations that can be altered in ways that maximize revenues. The application enables restaurateurs to use data to help make educated decisions in many areas, such as when to expedite service delivery, change price, modify function space, and institute marketing strategies.

Important Features

• All variables aside from RevPASH can be edited, thus allowing for both methods of calculating RevPASH
• Live calculation method - Anytime a variable is edited, other variables are updated as necessary.
• Tooltips above each variable show the effects of editing a particular variable.
• The ability to add or remove rows (which act as hours, days, weeks, or months).
• The ability to "flow" data between consecutive tabs (Hourly → Daily, Daily → Weekly, or Weekly → Monthly).
• The ability to export the data in the tables to .CSV (comma separated values) files.
• Page caches data in tables even when you close the browser.
• Addition of charts, which show RevPASH as a function of time.

Locking Mechanism

In order for the user to understand the relationship between different variables, the RevPASH application allows you to lock various fields. The locking mechanism enables you to pick which variables are affected by a change in the data input.

Basic Scenarios

Let's say we manage a 100-seat restaurant. The following information for Day 1 (Daily calculation) has been collected. The revenue generated for the entire day was $6,000. The restaurant was open for 8 hours. Assume that 400 customers dined in the restaurant and the average amount each guest spent was $15. The percentage of available seats occupied over the day was 50%.

1. Calculating RevPASH

   According to the first formula, as specified below, RevPASH is $7.50 that is 6,000 / (100 Seats x 8 Hours Open). Alternatively, by applying the second formula, the same figure can be arrived by multiplying 0.50 x 15.

   
   
   

   Method 1: RevPASH = Revenue/(Seats available x Hours Open)

   
   
   

   Method 2: RevPASH = Average Check x Seat Occupancy %

   

2. Editing Revenue

   Consider that we would like to understand how a change in Revenue ($7,000) will impact other variables.

   
   
   

3. Editing the number of Customers

   Consider that we would like to understand how a change in the number of Customers (500) will impact other variables.

   

4. Editing the amount of Average Check

   Consider that we would like to understand how a change in the Average Check amount ($20) will impact other variables.

   

Author Bios

Dr. Peter Szende

Dr. Peter Szende is a full time faculty member at Boston University School's of Hospitality Administration. He earned a doctorate in business administration with an emphasis in hotel marketing.

He has gained over 25 years of management experience in the hospitality industry both in Europe and North America. Peter joined BU as an assistant professor in 2003 and was promoted to Associate Professor of the Practice in 2010. Since his arrival he has taught five different courses including Introduction to Hospitality Management & Marketing, Human Resources and Food & Beverage Management. Dr. Szende has written two books, "Hospitality Marketing" and "Case Scenarios in Hospitality Supervision". In 2011 he developed a new educational concept serving as the lead author and Series Editor of "Hospitality Management Learning Modules", published by Pearson Prentice Hall.

Dr. Kristin V. Rohlfs

Kristin V. Rohlfs is an independent consultant and researcher based in Rochester, New York. She holds a Ph.D. in Service Operations Management and an M.M.H. from the School of Hotel Administration at Cornell University, as well as a B.B.A. from The University of Texas at Austin. Her research interests focus on small-business application of operations management and revenue management and customer reactions to revenue management practices. Authored works include a dissertation, The Role of Space in Revenue Management (2009), and an article, "Best Available Rate Pricing," published in the Cornell Quarterly (2005). A 2011 article coauthored with Breffni Noone and Kelly McGuire, "Social Media Meets Hotel Revenue Management: Opportunities, Issues, and Unanswered Questions, can be found in the Journal of Revenue and Pricing Management.

Roy Madhok

Roy Madhok graduated from Boston University's School of Hospitality Administration. He has co-authored two chapters in Pearson Prentice Hall's Hospitality Learning Modules: "An introduction to Menu Performance Analysis" and "Crafting a Restaurant Business Plan". Roy is currently a Director of Revenue Management with Highgate Hotels.

Any questions/concerns?

Send an email to RevPASHhelp@gmail.com

Version: 1.0 (Updated on: August 11th, 2013)
© Peter Szende, Kristin Rohlfs, Roy Madhok
Developed by Robert Fera and Andrew Bauer, of the Boston University IS&T Web Team