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How to guarantee ROI on your outdoor dining space

As the pandemic progresses, the notion of outdoor dining spaces driving is more important than ever. One blogger shares everything he knows about customers' needs when it comes to dining al fresco.

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August 13, 2020 by Steve Starr — Chief, starrdesign

Before COVID-19 shook the industry, we had started researching how to quantify the return on our clients' investment for outdoor dining spaces. Many of our clients were investing significantly in their outdoor dining spaces, while others were pulling back on the size and complexity of their patios and sidewalk cafes. We were constantly asked what the right amount of investment (real estate, number of tables, type of space, complexity of enclosure etc.) is for a specific concept.

Being an outright restaurant nerd, I tasked my team with gathering data and examples of restaurant concepts that had received substantial returns for their outdoor dining spaces. Our research initiative and the data collected thus far was placed on hold as we, along with the rest of the world, watched businesses and restaurants close. As the pandemic progressed and restaurants started to reopen, the notion of outdoor dining spaces driving sales became even more important, however, which is why I'm sharing what we found out about customers' needs when it comes to dining al fresco.

Below are several things to consider when developing an outdoor dining space.

1. What is the purpose?
When considering the purpose of your outdoor dining space, you should ask yourself the following questions.

Are you looking to add seating / table capacity in appropriate weather?
Are you trying to provide an alternative experience to your indoor dining rooms?
Are you seeking an opportunity to host private / semi-private parties?
Are you thinking of the outdoor space(s) as an extension of your bar experience?
Are you expecting to use this space four, six, nine or 12 months of the year?

All of these, and more, are valid uses for outdoor dining spaces. The key to defining the purpose, however, is that one space can rarely meet all these objectives. If your outdoor dining space can meet all these objectives, it likely requires an unusually high investment.

2. What can the kitchen and waitstaff realistically support?
Years ago, we designed a beautiful outdoor courtyard dining space for iconic gourmet food and wine purveyor. It had all the elements of a lively outdoor dining environment: attractive, moderately low maintenance, appropriate furniture, a mixture of shade and sun, one or two specialty seating types that act as focal elements, beautiful plants/greenery along the perimeter and intermixed with the seating, and a small stage area for live entertainment.

With this level of investment, most people expected it would garner a large ROI and add to the concept's bottom line, but it, unfortunately, closed after one spring-fall cycle. The problem was not the design or even the amount of the investment; the downfall was the location and operation. The courtyard was three storefronts away from the Wine Room and even further to the market/cafe. The result was great food, great wine but terrible service. The patio was just too far for the staff to work efficiently, and when the outdoor dining area was full, both the small kitchen and the servers got bogged down. Even with state-of-the-art technology (for that time), it just could not meet the guests' expectations.

The key takeaway was that although outdoor space can increase seating capacity (and revenue), its success is critically linked to the operation and service. Increased revenue is good, but not at the expense of a positive guest experience. Many guests are now willing to sacrifice a perfect experience given the pandemic and its effects, but they will not sacrifice reasonably good service.

3. What makes a great outdoor dining environment?
There are three:

Varied experiences, which can come from different types of seating (i.e. picnic tables, hi-top tables, lounge furniture, etc.), a variety of areas where one is covered and one is not, gaming areas vs. seating areas, or simply areas focused around different elements (i.e. street view, fire pit, TVs, etc.).
Good scenery; nobody wants to eat or drink while staring at a sea of parked cars or a busy four-lane expressway. People seek an outdoor dining EXPERIENCE. The visual and audible surroundings drastically impact the experience. Strong views of nature, people-watching along pedestrian boulevards, or focused views towards live entertainment, TVs, landscaping, or other focal elements give the dining environment unique character.
Weather control, which may not seem very profound, but outdoor dining often has an inherent draw simply because it's not inside. While the average person spends the majority of their day indoors, often staring at a computer screen, the outdoors open-up the beauty and splendor of all that mother nature has to offer, which is sometimes poor weather.

An obvious but crucial key to a successful outdoor dining environment is mitigating the unpredictability of the weather factors. The difficult task for restaurateurs is balancing how much you want to try to control the weather and how much you want to embrace it. We have clients that span the entire spectrum from creating completely enclosed, air-conditioned spaces that can be 75% opened up to the outdoors on those few days during the year when the weather is perfect, to clients with 10 tables under an awning along the front or side of the building. There is no singular right or wrong answer because one solution does not fit all, and going back to consideration No. 1 — What's the purpose behind the outdoor dining spaces?

Once you have defined and outlined the answers to these questions, we can begin moving on more deeply with the next phase, and part two of our series: outdoor design. It will cover how to mitigate weather extremes, simple design elements to create peaceful and inviting outdoor spaces, and how much of each element is just right. By following these simple steps, and the recommendations outlined in article two, you can learn how to quantify a true ROI on your outdoor dining spaces.