The Capacity Myth: Why RevPASH Matters More Than a Full Dining Room

A packed dining room feels like success. The energy is high, the floor is moving and the team is working hard. But here’s the uncomfortable truth many restaurant operators learn the hard way: busy doesn’t always mean profitable.

As revenue management expert and Emeritus Professor of Operations Management at Cornell University, Sherri Kimes, puts it, “What if you were fully booked and everyone just ordered one cup of tea? You’d be full and losing money.”

This is the capacity myth: the belief that maximizing seating capacity automatically maximizes restaurant revenue. In reality, true performance comes from how well you use your seats over time, not just how many are filled at once during peak hours.

In this guide, Sherri is breaking down why “full” can be misleading, how the RevPASH metric reframes the problem and what restaurants can do to maximize revenue without sacrificing the dining experience.

Why “full” became the wrong success metric

Occupancy is visible. It’s emotional. It feels good to see every seat filled and a line at the door. For teams, busy nights feel like wins.

But occupancy only tells you how many seats are taken, not how well those seats are performing as a revenue management key performance indicator (KPI).

Sherri has seen this mindset play out across decades of work in the hospitality industry, from hotels to restaurants. “In the hotel industry, it’s the same thing,” she explains. “Oh, my hotel’s completely full. Well, yeah, I could sell your whole hotel if I charge $5 a night.”

The same logic applies to restaurants. You can fill every seat at the wrong price, with the wrong guests, for the wrong length of time and quietly erode revenue generation in the process.

The hidden inefficiencies behind a packed dining room

A full dining room can hide more than it reveals. Behind the buzz are often structural issues operators don’t see in real time across the dining area:

Sherri has seen how these issues surface when occupancy rises without balancing the entire operation. In one restaurant she worked with, the dining room went from about 60% to nearly 80% full. In a 200-seat dining room, that meant jumping from roughly 120 guests to 160 guests in the same dining window.

The kitchen couldn’t keep up with the increased volume. Orders backed up, ticket times stretched and pressure spilled back onto the floor. This is when service starts to break down: food quality suffers, mistakes happen, servers rush, items get forgotten and the guest experience deteriorates.

That’s the risk of chasing “full” without balance. Operationally busy doesn’t always mean operationally efficient.

Introducing RevPASH: the metric that changes how you see your dining room

RevPASH, a metric coined by Professor Sherri Kimes, stands for Revenue Per Available Seat Hour. It measures how effectively your restaurant turns seat capacity into revenue over time.

Instead of asking, How many seats are filled? RevPASH asks the more important question:

How much revenue is each seat actually generating per hour during operating hours?

As Sherri explains, “RevPASH, like RevPAR in hotels, is a way to measure how well you’re using your inventory to generate revenue. Being full matters, but only if the seats are working.”

RevPASH in action

RevPASH combines two things operators already track: how full the dining room is and how much guests spend.

RevPASH = Seat Occupancy % × Average Spend per Cover ÷ Dining Duration (hours)

For simplicity, this example looks at a one-hour peak dining window.

Imagine two similar restaurants. Same peak hour. Same number of seats.

Restaurant A

Restaurant B

On the surface, Restaurant A looks more successful. More people. More motion. More noise. But when you look at the restaurant RevPASH, Restaurant B is actually generating more value from its dining room, even though it’s less full.

That’s why RevPASH matters. It shows when a full dining room is masking lower revenue efficiency.

What does a “good” RevPASH look like?

There isn’t a single “good” RevPASH number that applies to every restaurant. Instead, RevPASH is best used as a diagnostic tool.

As Sherri Kimes explains, “In an ideal world, RevPASH would equal the average spend per cover. That would mean every seat was filled for the entire hour.”

That scenario represents a theoretical ceiling, not a realistic daily target.

In practice, the gap between your average spend per cover and your RevPASH represents revenue you didn’t capture during that dining window — the dollars left on the table due to empty seats, slow turns or table mismatches. A higher RevPASH indicates stronger revenue productivity in a given dining window.

What RevPASH reveals that occupancy hides

When operators start looking at RevPASH data, patterns emerge quickly:

A bar Sherri worked with learned this firsthand. When it was packed wall-to-wall, bartenders couldn’t keep up and guests stopped reordering. After limiting capacity, service improved and increased revenue followed.

More people doesn’t always mean more money. Better flow does.

5 Tips for maximizing RevPASH without rushing guests

Optimizing RevPASH isn’t about turning tables aggressively or nickel-and-diming diners. It’s about designing smarter systems that support dine-in service and long-term performance.

Here’s where operators see the biggest gains:

1. Train your host like a revenue manager

“If there’s one place to start,” Sherri says, “train your host.”

Hosts control table mix, party placement, pacing and priority seating. Small decisions, like seating a two-top at a four-top, compound quickly on busy nights. Clear rules and training protect revenue without hurting hospitality.

SevenRooms’ table management software helps automate those decisions at the host stand. From a single tablet, teams can manage reservations, walk-ins, guest lists and table statuses while tracking real-time pacing across the floor. Predictive waitlists reduce friction and support streamlining front-of-house operations.