How to Increase Your Bar’s Profits with Reduced Capacity

21 August 2020
Bar Management
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Empty bar tables

The good news is that the hospitality industry is beginning to see the light at the end of the COVID-19 tunnel as bars and restaurants reopen across the United States, however cautiously. But it’s going to take more than positive thinking to operate profitably while observing physical distancing mandates and other public health protocols—which in many cases means opening at reduced capacity.

As of August 1, most establishments across the country that have been able to open are allowed to operate at 50% capacity. With a maximum of no more than half the patrons typically admitted, revenue is bound to take a deep dive. Bars and restaurants need to adapt quickly and become extremely creative to survive this transition from limited capacity/revenue to “business as usual.”

To increase your bar’s profits during this period of reduced capacity, start by doing the math: if your bar was 100% full on busy nights, but only 35% full most of the time, you need to do all you can to be 50% full all of the time. It’s up to you to come up with strategies and promotions to fill up at least half your seats during traditionally slower times so you can stabilize your revenue and keep your profitability on the rails:

To catch the shark in the movie Jaws, Roy Scheider’s character Brody famously said, “We’re going to need a bigger boat.” To keep making money while operating at reduced capacity during these turbulent times, bar owners could just as easily have another catchphrase: “we’re going to need a happier happy hour!” Here are a few ideas to pump up this universally popular time of day for clients and customers:

Introduce Rolling Happy Hours.

Late summer and the beautiful days of early fall are a great time to introduce a rolling Happy Hour special—especially if you offer outdoor seating! Why not offer the best Happy Hour discount to patrons between 2 and 3 PM? Keep the party rolling between 3 and 4 PM with a slightly lower discount, reducing it even more between 4 and 5 PM. Once you hit 5 PM, roll into your regular Happy Hour pricing, which can take you right into the busy dinner rush.

Offer a “whole bar” Happy Hour.
Putting all your alcohol on sale makes many customers look up to the top shelf for indulgence at a value. Focusing on “profit per drink” instead of your pour cost (PC) can make you more money. Think about it: most people will only have 2-3 drinks. Even with a PC of 35–60%, you will still make more money if your customer asks for those drinks to be made with a higher grade of spirits. A personable, friendly bar staff who are skilled at upselling are invaluable in promoting these top-shelf options. If you offer top-shelf at a good price, customers may likely choose one of them—increasing your profit overall. 

Here for Happy Hour? This way to the Dining Room…
One of the worst sights you can see as a bar owner, especially now, is Happy Hour customers leaving because they can’t find a seat in the bar. If you have a dining room, this is when you can really get creative. If reservations typically peak at 7 PM or later, why not convert those unused tables between 5 and 7 PM into additional Happy Hour seating? You will want to instruct your staff to monitor the crowd so that customers who come in for Happy Hour later in that window can be told that their table will be needed five minutes before a reservation to allow the table to be cleaned and reset for the dining party. 

We’ll have more strategies and promotional ideas to keep your bar profitable while operating at reduced capacity in next month’s blog.

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