Almost one in five (19%) Brits have failed to arrive for a restaurant reservation, according to research from TheFork. While missing a booking can be an honest mistake, many no-shows simply choose not to cancel a reservation that they know they won’t attend and it’s the restaurant that pays.
No-shows have tangible effects on businesses, such as lower sales (a drop in earnings of up to 15% per service), food losses, and disrupted services – not to mention the loss for staff that turn away customers only to face empty tables. French three Michelin-starred chef Guy Savoy says the issue “creates a malaise in the dining room with its guests”.
As the cost of living mounts, UK restaurants simply can’t afford to continue to accommodate no-shows. Below, we have compiled four solutions to counter this increasingly recurring and costly phenomenon for restaurateurs – to keep businesses busy and restaurants alive.
1. Communice the consequences of no-shows
Many customers don’t necessarily understand that their absence impacts restaurants in the ways listed above. So, often, it is up to restaurant owners to ensure that customers are aware of the effects. Confirmation emails and websites are some of the tools available to restaurant owners. For example, if a customer calls for a reservation, it may be appropriate to politely remind them of the restaurant’s cancellation policy and the consequences of not adhering to the procedure outlined. As a restaurateur, it is, of course, paramount to live by the time-honoured philosophy, “the customer is king”. However, it is also within the rights of the restaurant to leverage transparent communication to mitigate the significant financial and organisational consequences – and customers will respect that.
2. Consider overbooking
Just as airlines sell an excess number of tickets to cope with last-minute cancellations, restaurant owners should also consider taking more reservations than they have seats. This can be a winning strategy for those facing the issue of missed reservations, but it should be practised sparingly if no cancellations occur. As a general rule, restaurants tend to operate at a 5-10% margin on overbooking, and a simple glance at the history of cancelled reservations or “no-shows” per service can help you evaluate where within that margin you can place your business. However, there are other considerations that should be made. First, it’s worth taking into account where your restaurant is located. Depending on whether a business sits: in the centre of a city – frequented by busy commuters and high-spending tourists – or in a rural area that has less traffic and an increased number of locals, you may choose to adjust how much of a risk you take with overbooking. Second, consider the night. Earlier in the week, fewer punters will go out for dinner and those that do, may be less likely to spend as much money as they might spend later in the week. So, depending on the day of the week, you might have a little more headroom for bookings.
3. Set up automatic reminders
To help those that do simply forget about their reservations, consider implementing automated reminders via SMS or email. This can be facilitated through online reservation tools such as OpenTable or SevenRooms, allowing both customers and restaurant owners to schedule push notifications at a time of their choosing. Better yet, it is also possible to add re-confirmation or cancellation links to either prevent customers from forgetting their reservation or free the table. This can significantly reduce the number of no-shows, and by integrating an online reservation tool like OpenTable with Lightspeed’s restaurant software, business owners can also schedule the sending of these messages in bulk. By synchronising the two software programmes, reservation statuses are automatically updated.
4. Explore bank imprint or prepayment
Another solution – perhaps slightly more radical – has also become more apparent with the rise of online banking: reservation with bank imprint or prepayment. In simpler terms, it is possible to configure online reservation tools so that they ask for a credit card number at the time of reservation, which serves as a deposit in case customers don’t honour their booking. In place of a deposit, restaurateurs can also request partial payment or prepayment of the bill ahead of the reservation being fulfilled. The range of digital tools available to restaurant owners acts as a safeguard against no-shows and, better still, helps staff build a connection with those that do honour their reservations.
However, it is up to restaurateurs to implement these processes to ensure that they protect their margins and their staff as a result. Otherwise, in the current climate, we may begin to see the restaurant sector downturn to a greater extent than is necessary.
Adrian Valeriano is senior vice president and managing director for EMEA at Lightspeed.