Operators across the world will tell you that restaurant 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.
Part and full pre-payments
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 shows up.
This used to only really be popular in high-demand venues where customers had to book tables months ahead. However, charging in advance is becoming more common-place for an array of venues looking to protect their revenues.
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 prepayments in the form of a restaurant ticket is useful, especially if the event is likely to sell out. Restaurants using ResDiary’s ticketing system set it up on specified days or times. The restaurant’s confirmation email can be customised to look like a ticket and used for 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, however. 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 may be unable to charge the card, leaving them out of pocket.
All this said, many venues successfully use tokenization to deter no-shows as the inputting credit card details during the booking creates a sense of obligation for most diners.
“As a business which specialises in freshly baked, handmade produce we must ensure that wastage is reduced wherever possible. 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 restaurant 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 ResDiary confirmations can be fully customised to your branding, style, and tone, helping eradicate mistakes on booking dates or times, and discouraging restaurant no shows.
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 more likely you are to re-sell their table.
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 regardless of your efforts, some people will just not turn up. If the same customer does this repeatedly, you have the option in ResDiary to block them so they can’t reserve your venue online.