Familiar? Your table of six booked for seven thirty…a no show. Those three tables booked for eight o’clock…all no shows. These scenes have long played out for hospitality, but in the age of COVID it’s not just soul destroying but financially damaging as well.
No shows are more than empty tables. They have a substantial impact on overheads. Firstly there’s operational costs such as fresh produce ordered, preparation time, extra staff rostered and turning away of walk-ins. Secondly in 2021, no shows pummel a business that has suffered months of closure, and reopened to reduced capacity and extremely tight margins.
The international dining scene show worrying ‘no-shows’ trends. OpenTable research indicated almost 10 per cent of Canadians and a staggering 28 per cent of Americans say they’ve not shown up for a reservation in the past year. A campaign in the UK called #ShowUpForHospitality is also gaining attention, for all the wrong reasons. Since British dining reopened, 1 in 7 people have not turned up to their reservation, and 1 in 8 say they are more likely to ‘no show’ than before the pandemic. At the time of writing this article the #ShowUpForHospitality live tally calculated that since ‘normal service’ resumed on 19 July 2021, no-shows cost the UK hospitality industry £3, 788, 212, 791. Each second the tally rises about £1,000.
Some say that COVID dining hesitancy is to blame for no shows. However, the worst offenders are 18 to 34-year-olds, which may indicate a shift in culture and complacency towards dining out. This generation’s current habit is to book several venues for a night out, then decide on the given night what they are in the mood for.
Many in the industry believe they are at a point where they must act. Guided by other services that require prepayment – the arts, sport and recreation – the ‘socially unacceptable’ culture for restaurants to do so is changing. According to Zonal in their 2021 UK report, more than half (55 per cent) of consumers are willing to pay a ‘no show’ fee and the same number (51 per cent) would be happy to pay a deposit to secure a booking. Booking reminders were popular, with 36 per cent saying they would be more likely to show up if the restaurant reminded them by phone, SMS, email or app.
How can restaurants reduce no-shows?
No-show fee / late cancellation fee
This is a popular approach, especially in high-end restaurants, with a $ per head at booking charged if there is a late cancellation or ‘no show’. This puts the onus on the diner to honour their reservation, with understanding that the venue has taken a credit card authorisation. Unfortunately this can help mitigate, but not eliminate, the no-show $ sting.
Flexibility is also required when applying no show or cancellation rules. Venues generally take into account illnesses, although many say a quick phone call, if possible, would be appreciated. And if, for example, one couple turns up for a booked table of four the venue may be reluctant to charge them for the missing two.
Many restaurants and booking systems treat deposits differently than a credit card pre-authorisation. A deposit is generally a set amount pre-charged to a credit card which goes towards the meal, i.e. deducted at off the bill. With seats at a premium because of restrictions, many venues are starting to ask for a deposit for aset-course menu. Refundable on certain conditions.
Some diners find deposits restrictive if they eat or drink less than planned and have a credit remaining on their bill, which may mean taking away items. Deposits can be also be unpopular depending on the charge per head (up to 100 per cent of a set menu in many venues) and calibre of venue, so choosing the right amount to match diner expectation is important.
Some fine-dining restaurants offer degustation or fixed event menus tickets, much like a theatre ticket. If the customer has to cancel, the restaurant may be able to re-sell the ticket, but there’s no guarantee. This has gained popularity in the USA but appears to be less palatable to the Australian consumer.
Clear communication of your cancellation policy on your website and/or booking system is the first step. Some venues make a courtesy phone call to the customer the day before, but this style of reminder has pretty much been superseded by email or SMS. These techniques have been shown to help significantly reduce your restaurant’s no-show rate.
It is expected there will be a significant increase in venues operating on bookings only, especially with restricted seating (COVID). Venues may then offer a limited length of time for dining periods and/or earlier sittings. These restrictions may have a negative impact on the personal dining experience but it can make it easier to predict staffing and produce requirements.
Make it easy to cancel
Some customers state the reason they didn’t cancel is because it was too difficult to do. A way around this is to use a booking system where cancellation is one step. If you use direct bookings make sure diners can reach you quickly via phone, social media platform, or WhatsApp. The easier it is to cancel the more likely diners will cancel rather than no show.
Ban or list repeat offenders
Restaurants can keep a record of repeat offenders through various online booking platforms. DIY is much more difficult and time consuming. No show guests who then
cross a nominated threshold (number) of no-shows can be banned or listed.
Open Table manages no-shows by advising if a user accumulates four no show reservations within a twelve-month period their account will automatically be deactivated. TheFork, formerly Dimmi, published figures from its 2017 No Show Report, stating that partner restaurants blacklisted 38,000 diners. Given the upward trajectory in no show figures, the current blacklist number is probably eyewatering.
Name and Shame
A last-ditch effort by venues is the trend of naming, shaming (on social media) customers who no show. Restaurants around the world have been known to resort to this tactic.
Whilst this may feel good in the moment, this approach generally does not create change and has the effect of undermining customer confidence.