Restaurateurs across the world will tell you that no shows are the scourge of their business’ existence. The restaurant industry can have margins as low as 3-5% so an empty table is a big issue. In large cities, some venues report that almost 20% of tables don’t turn up for bookings. With margins so tight, this can have a huge effect on the bottom line.
However, the advent of online bookings and the technology it brings gives restaurants much more revenue protection:
Full or part pre-payment
This is the most secure way of protecting your revenue.
Restaurants using ResDiary can take full or part payments at the time of the reservation, online and internally. Operators then know that they have some money in the bank, regardless of whether a table no shows.
This is a particularly popular in in high-demand venues where customers have to book tables months ahead. Restaurateurs aren’t disappointing potential diners by turning them away only to have empty tables on the night.
Restaurateurs can set up different amounts to be taken depending on the day, time or the menu using ResDiary. As a result, they can be saved a lot of time-consuming admin work.
“Since starting the ResDiary full payment system, 100% of our guests have honoured their booking with us.
It means we know how many guaranteed bookings we have. We can purchase and prepare the correct amount of food to minimise food waste.
It has allowed us to cut down time previously spent organising and rearranging bookings so we can spend more time improving the food and the dining experience at The Table.”
Sean Clark, Chef Patron – The Table
Some venues don’t feel comfortable taking payments for everyday bookings, or their business levels don’t demand it.
However, lots of venues run tasting evenings or special events that cost a lot to organise. This is where pre-payments in the form of a ticket is necessary, especially if the event will sell out. Restaurants using ResDiary can set this up on specified days or times. The restaurant’s confirmation email can be customised to act as a ticket, acting as entry to the event, similar to a traditional ticket.
Using ResDiary’s partnership with payment-provider Stripe, restaurants can store customer card details, charging a set amount if the customer no shows. Storing card details is free and a (small) fee is taken only if the card is charged.
There are issues with this method though. Stripe checks funds when the card details are entered but there is no way to know if they’ll still be available on the reservation day. Businesses can be unable to charge the card and are still left out of pocket.
For many venues, tokenization is a way of deterring no shows and creating an obligation, rather than gaining back revenue.
“As a business which specialises in freshly baked, hand made produce we must ensure that wastage is reduced wherever possible to ensure we can. This means we continue to offer high quality food at an affordable price.
Therefore, the ability to capture customer’s card details using ResDiary and Stripe has been a great help to us.
Since enabling ResDiary Guarantees for our online bookings, we have seen the number of ’no show’ bookings drop significantly to almost zero.”
Ben Howell, General Manager – Cup Glasgow
All of these methods have proved successful for operators in curbing the trend of no shows. However, no matter how advanced your reservation system or payment policy, it’s always good to get the basics right:
Be clear about your cancellation policy
A clear cancellation policy is essential. Let the customer know clearly their cancellation window – and the penalties incurred (if any) for a late arrival or cancellation.
Make it part of your service to give a clear, prompt confirmation email to your customer Your automated ResDairy confirmations can be fully customised to your branding, style, and tone, helping eradicate mistakes on booking dates or times.
Call to confirm
While not always possible, a call to confirm a reservation is generally appreciated. As an added benefit you can log this in your ResDiary account as a telephone confirmation, or an attempt to contact the guest.
Make it easy to cancel
While this sounds counter-productive, the more notice about a cancellation you can achieve, the better.
Your online reservations page can be set up to allow customers to cancel or edit their reservation. The customer will receive an updated confirmation or cancellation notice, and you’ll know in advance of a free table for the evening.
Sometimes though, people will just not turn up, not matter what you do. If the same customer does this repeatedly, you have the option in ResDiary to block them so they can’t reserve your venue online.