Guests not showing up despite reservations - are a growing, costly problem. But to claim that this is the end of the dinner culture is going too far. Because the problem is also homemade.
We show how to avoid no-shows and secure revenues in restaurant business.
The Problem: More reservations – more no-shows
In recent years, online reservations have greatly increased. In the UK they’ve grown 30 Percent from 2017 to 2019. Guests no longer want to simply go out to eat, they want to go to a very specific restaurant - and often enough, they don't want to decide which one until that evening. So they make reservations for dinner at the same time in several establishments, which inevitably leads to several last-minute cancellations or no-shows. And according to Michel Peclard, that doesn't happen all that rarely. The innovative Swiss restaurateur therefore manages the guest data of his 14 restaurants with the reservation software aleno in order to be able to recognize and cancel multiple bookings.
Restaurateurs don't want to leave everything to chance. They want to plan and use goods and staff efficiently. Reservations are therefore desirable, and in some places even mandatory, for and most when it comes to groups of guests. Where there are more reservations, there are more no-shows, on average 20% of reservations are no-shows.
The Mechanism: Reservations are easy – but what about cancelations?
Reservations via online booking systems are a time saver for restaurateurs and guests. Constantly ringing phones is a stressful delay on service and restricted opening hours and busy phone lines are a nuisance for guests. The easier the booking system, the more reservations.
And that goes for cancellations, too, or they just won't happen. Guests should be reminded of reservations via e-mail or text, combined with the option to make a change or cancellation independently, via a link in the SMS or email.
Totally inappropriate or just fair: Reservations and no-show fees
Should reservations with "unexcused absences" cost something? A few years ago, the answer was a resounding "no." The assumption: Fees scare off guests. But since then not only have no-shows increased, but so has awareness of the horrendous losses. Billy Wagner of Nobelhart & Schmutzig in Berlin or Bobby Bräuer of Esszimmer in Munich cite about 6,000 euros in lost sales per month - if they do nothing about it. That's why they charge no-show fees or sell the menu in advance, thus lowering the no-show rate to 0%.
Whatever you offer, from a 10-course Michelin Star menu to a temporary pop-up, you can provide your menu ahead of time and allow guests to pick their meal and pay while making the reservation. This is comparable to buying tickets for the cinema or a concert. Anyone who has purchased a “dinner ticket” will not cancel as easily and they certainly won’t just not show up.
Another variant is the no-show fees, on which more and more renowned restaurants such as The Restaurant of the Dolder Grand, Equitable in Zurich, the Vitznauerhof in Vitznau rely. When making a reservation, the guest must not only confirm the business conditions including the agreement (examples here) on no-show fees, but also provide his credit card. If not cancelled in time, the guest will therefore incur charges.
Prudence and goodwill are key to accepting no-show fees. Guests should receive automatic reminders prior to the appointment with a link to reconfirm, change, or cancel.
Restaurateurs should and may (here are the legal principles) only charge no-show fees anyway if the table cannot be given to someone else. By the way, it is usually sufficient to announce no-show fees in order to avoid no-shows.
Overbooking: Count on no-shows
For large restaurants like the Kronenhalle in Zurich, there is another solution: over-booking. This means that no-shows are not sanctioned at all, but are added to the number of possible reservations. With a no-show rate of 10%, reservations for 220 seats are accepted instead of the existing 200.
The advantages are obvious. Nothing is expected from the guest, no advance payment, no prudence, no further action. The disadvantage, however, is that it doesn't always work out - and it takes very good service to sweeten the waiting time for excess guests or a lot of spontaneous creativity to find a quick solution in case of overbooking. But if it works, it's usually a plus and goes down well with the guests!
How No-Shows will be avoided in the future
There are other strategies for the future - predictions based on guest data. People have behavior patterns. Past behavior can therefore be used to predict future behavior, which also applies to last-minute cancellations and no-shows. The better guest data is collected and maintained by restaurateurs, the better possible no-shows can be predicted.
Of course, it is not possible to check each individual guest manually to see whether he or she has already canceled at short notice or failed to show up.
Researchers are already considering prediction models based on guest data for the future. The machine learning method is particularly promising. Forecasts are automatically compared with reality and adjusted, making them increasingly accurate. The restaurateurs only have to maintain the guest data, i.e., manually or automatically record whether guests have made or canceled their reservations or not shown up. In return, they then receive suggestions on where to ask again or how high the overbooking should be in a shift.