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Happy Hour Revenue Calculator
Calculate net happy hour revenue by multiplying discounted prices by volume and subtracting lost full-price sales. Evaluate promotion ROI.
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hrs
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Happy Hour Revenue⧉
$1,200.00
200 items at $6.00 each
Lost Full-Price Revenue⧉
$500.00
50 sales cannibalized
Net Revenue Impact⧉
$700.00
Promotion is net positive
Discount Depth⧉
40.00%
$10.00 → $6.00
Gross Profit / Session⧉
$410.00
After $700.00 COGS + $90.00 labor
Gross Margin⧉
34.20%
Low margin — review pricing
Monthly Revenue⧉
$25,980.00
5 days/wk × 4.33 weeks
Monthly Profit⧉
$8,876.50
After COGS and labor costs
Per-Item Economics
| Item | Amount |
|---|---|
| Sale Price (discounted) | $6.00 |
| Food / Drink Cost | -$3.50 |
| Labor per Item | -$0.45 |
| Net Contribution / Item | $2.05 |
Volume Scenarios
| Volume Level | Items Sold | HH Revenue | Lost Full-Price | Gross Profit |
|---|---|---|---|---|
| 50% | 100 | $600.00 | $250.00 | $160.00 |
| 75% | 150 | $900.00 | $380.00 | $285.00 |
| 100% | 200 | $1,200.00 | $500.00 | $410.00 |
| 125% | 250 | $1,500.00 | $630.00 | $535.00 |
| 150% | 300 | $1,800.00 | $750.00 | $660.00 |
Sales Composition
150 New
50 Cannibalized
75.00% of happy hour sales are truly incremental. Revenue per hour: $400.00 (67 orders/hr).
Planning notes, formulas, and examples
About the Happy Hour Revenue Calculator
Happy hours drive traffic during slow periods, but they also discount your highest-margin products — beverages. The key question every operator must answer is: does the incremental volume from happy hour pricing more than offset the revenue lost from guests who would have paid full price anyway?
This calculator helps you evaluate the financial impact of happy hour by comparing the revenue generated at discounted prices against the full-price revenue you sacrifice. The result is your net happy hour revenue — a realistic picture of whether the promotion is helping or hurting your bottom line.
Smart happy hour programs target truly incremental guests — people who wouldn’t visit without the discount — while minimizing cannibalization of regular full-price business. Understanding the math behind this trade-off is essential for designing promotions that genuinely grow revenue.
When This Page Helps
Many restaurants run happy hours without knowing whether they actually increase profit. By calculating net revenue — discounted revenue minus lost full-price sales — you get a clear answer. This data helps you set the right discount level, choose which items to discount, and determine whether happy hour is worth continuing.
How to Use the Inputs
- Enter the discounted happy hour price per item or average.
- Enter the expected volume of items sold at the discounted price.
- Enter the regular (full) price per item.
- Enter the estimated number of items that would have been sold at full price without the promotion.
- The calculator shows net happy hour revenue after accounting for cannibalized full-price sales.
Formula used
Happy Hour Revenue = Discounted Price × Happy Hour Volume
Lost Revenue = Full Price × Cannibalized Sales
Net Revenue = Happy Hour Revenue − Lost RevenueExample Calculation
Result: $700 net revenue
Happy hour revenue: $6 × 200 = $1,200. Lost full-price revenue: $10 × 50 = $500. Net revenue: $1,200 − $500 = $700. The promotion generates $700 in net revenue, but only because 150 of the 200 happy hour sales are truly incremental.
Tips & Best Practices
- Track how many happy hour guests stay for dinner — these "converting" guests dramatically increase the promotion’s value.
- Limit happy hour to the bar area or specific menu items to protect full-price dining room revenue.
- Use a time limit (e.g., 4-6 PM) to create urgency and reduce cannibalization of dinner service.
- Discount selectively — discount well drinks and house wine, not premium spirits.
- Offer discounted food with full-price drinks or vice versa to maintain beverage margin.
- Survey happy hour guests to understand whether they are new or simply shifted from regular hours.
The Cannibalization Problem
The biggest risk with happy hour is cannibalization — guests who would have visited anyway simply shift their timing to capture the discount. If 100% of happy hour guests are cannibalized, the promotion is pure cost. The goal is to drive genuinely incremental visits. Track guest counts before and after implementing happy hour to measure incremental lift.
Happy Hour as a Marketing Tool
Beyond the direct revenue impact, happy hour serves as a low-cost marketing channel. It introduces new guests to your restaurant, builds a social atmosphere that attracts passersby, and fills an otherwise quiet period that still incurs fixed labor and overhead costs. Even break-even happy hours can be worthwhile for their marketing value.
Evolving Beyond Traditional Happy Hour
Forward-thinking restaurants are replacing blanket discounts with more targeted promotions: industry nights, loyalty member exclusives, early-bird prix fixe dinners, and reverse happy hours (late-night discounts). These formats attract specific demographics while minimizing broad cannibalization of regular-priced service.
Sources & Methodology
Last updated:
Frequently Asked Questions
Calculate net revenue as this calculator does. If net revenue is positive and the promotion brings in guests who also order food or stay for dinner, it’s likely profitable. Factor in labor costs for the additional shift hours.
Discounts of 20-40% are typical. $2-$4 off drinks or half-price appetizers are common. Avoid discounting more than 50% — deep discounts attract deal-seekers who are unlikely to become regular full-price guests.
Compare sales during the happy hour window before and after implementing the promotion. The guests who were already buying at full price during that window represent your cannibalization estimate.
Discounting food (appetizers) while keeping drink prices full can work well because guests will order more drinks at full margin. Conversely, discounting drinks attracts traffic and the food they order covers the discount.
It depends on the format. Premium happy hours in upscale settings attract professionals looking for after-work options. Deep-discount happy hours in casual settings attract price-sensitive guests. Design your promotion for the clientele you want.
No. Some states and localities prohibit or restrict happy hours. Check local alcohol laws before launching any drink discount promotion. Some jurisdictions ban variable pricing on alcohol entirely.
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