Now that venues have opened up after pandemic restrictions, event and private dining spend is increasing nationwide. So, what does this mean for you and your restaurant? If you don’t already have a private dining or events program in place, you’re missing out on a revenue growth opportunity.
Along with increasing your bottom line, it’s important to note that large group and private events won’t cannibalize your existing business. Instead, you’ll be tapping into an entirely separate segment. There are three major reasons to start working to attract private events: higher spend, predictable revenue, and higher margins.
1. Higher spend
The average party size for a full-service restaurant is 3.7 guests. Depending on your average ticket, you could be raking in $50 to a couple hundred dollars per table, perhaps even higher for big spenders.
While there is a lot of variance, the average large group or private event spends around $2,500, which is 5 to 20 times the amount of revenue your average table will bring in. Tripleseat’s event management software is used to manage hundreds of thousands of events, which allows us to be able to look at statistics across a wide range of restaurants managing events.
But events don’t just translate to more people ordering more menu items. Private dining tables tend to have higher average tickets than your typical customers. These events are often celebratory — think corporate holiday parties, rehearsal dinners, and business celebrations. As a result, events tend to include higher spend on additive items like alcohol, appetizers, and dessert.
Key takeaway: Events bring in parties that are larger, have higher tickets, and spend 5 to 20 times more than your typical restaurant guests.
2. Predictable revenue
Large groups and private events are major sales opportunities for restaurants. Events provide an opportunity to actively sell. No longer will you have to rely on customers making reservations, which are typically driven by marketing. You can drive repeat business with one-on-one sales relationships.
With a sales process for large parties and relationships with returning customers, you can generate predictable revenue for your business.
Private dining revenue is also predictable because it’s booked in advance. One of the biggest values of creating a private events business is guaranteed revenue weeks, months, or even years ahead of time. The majority of private events are booked 30-60 days out from their actual date.
Not only that, but Tripleseat’s robust reporting features allow you to see your program from a bird’s eye view. Easily identify everything from lead sources to conversion rates, and better analyze goals and tweak sales strategies.
Finally, it’s standard practice to collect a deposit of 10 percent to 50 percent of the estimated total cost when private events customers book with you. Over 90 percent of the restaurants that Gather works with collect signed digital contracts. This helps partially or fully guarantee the estimated cost of the event ahead of time.
Key takeaway: Events offer more predictable revenue than dinner reservations because parties are booked ahead of time, and revenue often comes in before event dates.
3. Higher margins
This one is pretty simple. Compare typical party versus group margins in full-service restaurants:
- Typical party: 3.5 percent to 8 percent
- Groups and events: 15 percent to 25 percent
Everything is more predictable for a typical party — including food ordering and service scheduling. Plus, higher-margin items like liquor and dessert comprise a larger portion of the check.
Key takeaway: Events are typically higher-margin business due to more predictable costs and higher liquor spend
Sources: SBDC Trend Report
Use the best software to manage your private events
Every restaurant is different, so results will vary, but developing a private dining program is worth considering. Once you launch your private events program and start driving leads, use Tripleseat to help your venue manage them. If you’re not a Tripleseat customer and you’re interested in learning more about Tripleseat’s event management tools and CRM features, schedule a demo at your convenience to take a closer look.