Ambiance and service attributes—not food quality—have the most dramatic positive impact on consumers’ willingness to pay more at restaurants, according to a new study.
The importance of ambiance and service over food quality is especially apparent at high-priced concepts, found the report, which was published in the International Journal of Revenue Management and comes from the University of Denver's Daniels College of Business.
Cuisine type also has a marked effect on how much consumers are willing to pony up at restaurants, the report shows, noting that most consumers are generally willing to pay more at a French restaurant than a Chinese or Mexican one.
“This difference is based on the assumption that French cuisine is inherently more complex and labor intensive compared to Chinese or Mexican cuisines and thus demands higher prices,” the study states.
It also points out that the relationship between restaurant attributes and price point is concave at high-priced concepts but convex at their lower-priced counterparts. In other words, high- and low-end restaurants should be managed differently in terms of food quality, service and ambiance.
The recent study examined 2,705 restaurants in the New York City area on food quality, ambiance and service, in order to analyze consumers’ willingness to pay.