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508 return on investment
menu and number of items), service style �quick
service/fast food or full service) and price.
There are various ways in which restaurants
may be categorised. The American National
Restaurant Association has developed, in conjunction
with other organisations, the idea of `concept
groups'. The quick service segment is subdivided
mainly on the basis of core product, into `concept
groups' of chicken, doughnut, Mexican, pizza and
so on. Mid-scale restaurants are made up of seven
concept groups: cafeteria, casual dining, familystyle,
hotel, steakhouse, speciality �seafood, ethnic)
and varied menu. The up-scale segment has
concepts described as casual dining, high-check
�high-priced), moderate check �moderately priced)
hotel, speciality and varied menu.
An alternative classification was also developed
in the United States in 1992. The restaurant
typology explicitly recognises the growth and
significance of multi-unit restaurant chains. It
proposes five types of restaurant, each of which
has distinctive menu characteristics and operational
features. These include quick service outlets,
offering low price, speed and consistency; mid-scale
restaurants, based around menu choice, value and
comfort; moderate up-scale, with delivery ambience,
flexibility and a `fashion statement'; up-scale
outlets which deliver an experience, style and
ambiance; and business dining, based on location,
price and value.
The restaurant sector is a significant part of the
tourism industry. The average American or
Frenchman eats out about four times a week. In
other countries such as the UK and Australia this
figure is lower, but the trend is towards a significant
increase in dining away from home. In 1995, the
US restaurant industry had sales of over $180
billion. Of great importance is the growth of
restaurant chains in all segments of the market.
Chain restaurants such as McDonalds, TGI Fridays
and Pizza Hut are becoming global brands,
with thousands of outlets and sales in excess of $1
billion. Despite this there continues to be a large
number of independently owned and operated
units serving local markets.
Further reading
Jones, P. �1996) `Restaurants', in P. Jones �ed.),
Introduction to Hospitality Operations, London: Cassell,
122±37. �Defines restaurants and outlines the
sector in the United Kingdom.)
Walker, J.R. �1996) `The restaurant business' in J.R.
Walker �ed.), Introduction to Hospitality, Engelwood
Cliffs, NJ: Prentice Hall, 154±79. �Discusses the
development and classification of US restaurants.)
return on investment
PETER JONES, UK
Return on investment is a ratio that measures the
net profit or net cash flow generated by an
investment in tourism or other businesses divided
by the average investment. It is expressed in
percentage terms. The average investment is
computed by summing the amount of the investment
at the beginning of the period measured and
the ending amount of the investment of the period
measured, and dividing it by two.
revenue forecasting
STEPHEN M. LEBRUTO, USA
Revenue forecasting is the estimating of revenues
for a future period. Qualitative forecasting
methods include market research, juries of
executive opinion, sales force estimates and the
Delphi technique. Quantitative methods of
revenue forecasting are both time series and causal.
Time series approaches are naive methods, the
application of a smoothing constant, and a
decomposition time series. Causal methods include
regression analysis and econometrics. These and
other research methods are used extensively in
recent tourism studies.
STEPHEN M. LEBRUTO, USA