The True Cost Of No-Shows To Your Business

If you’re managing a restaurant, pub, hotel, or even café, you’re no stranger to a booking system and have likely seen the system from both sides – as a customer, and as a hospitality professional.

While bookings have yet to return to pre-pandemic levels, there has been a notable shift towards online reservations becoming the dining norm, with a sharp decline in ‘walk-ins’ as attitudes change. For example, in June 2021, bookings were 42% higher than they were in the same month pre-pandemic in June 2019, and this trend only looks likely to continue.

Robust booking management systems are crucial to the smooth operation of any food business but, what happens when reservations fall through, and you’re left with empty tables? According to a recent study, 20%, or one out of every five customers fail to show up for the online reservations they’ve made, costing the UK restaurant industry a staggering £17.6 billion a year in lost sales. For smaller businesses, who only have limited seating – a potential 20% decrease can throw their profit margin right out the window.

So, how can you reduce the risk and cost for your business?

1. Start by employing a smart booking system to ensure that any unwanted tables are automatically released after a ’no show’ so that they can be rebooked by another customer. The industry standard wait time is 15 minutes after the initial booking time before declaring a ‘no show’ but, this is dependent on your experience and restaurant type. A late cancellation is a last-minute opportunity for another customer.
2. Consider taking deposits at booking to reduce liability. Research has shown that over half of consumers (55%) would be willing to pay a no-show fee if they didn’t attend their booked venue, while 51% would be happy to pay a deposit to secure a booking. 
   
   Originally only required for Christmas, New Year, and Mother’s Day, the busiest days in the calendar, 42% of restaurants are now taking pre-paid deposits to limit their risk of lost tables. Restaurants in the US are taking it one step further by requesting full payment to completely eliminate the financial impact of no-shows. Going down this route does have its issues so, you need to be sure that your business is robust and in high enough demand, or you risk a potential backlash.
3. Ensure you’re sending reminder emails, texts, and app notifications to all reservations ahead of service. This can be on the day of, or even, in the week of the booking depending on when the reservation was made. We’re all human, and sometimes life can get away from us so, a gentle prompt may be all that’s needed. 36% of consumers have said they’d be more likely to show up if the venue sent them a reminder.