It’s 8 pm on a Friday night. Your restaurant is packed, except for 2 tables with the ‘Reserved’ sign sitting on each of them. Guests come to your restaurant but you tell them you’re fully booked. They point to the empty tables and you explain they’re reserved.
Some guests may join your waitlist, while many will simply leave.
The hours pass and the 2 ‘Reserved’ tables remain empty.
You close up for the day, remove the ‘Reserved’ sign, and sigh. The reservations made a week before never came and you had to turn away guests because you were waiting for them to arrive. What you have is a case of no-show guests.
Unfortunately, restaurant no-shows are a common phenomenon in the F&B industry.
Restaurants struggle with no-shows and last-minute cancellations almost every day.
What guests don’t realize is that not showing up or canceling a booking affects a restaurant’s bottom line. It also impacts their ability to build lasting relationships with new guests.
The issue is magnified for smaller F&B concepts who rely on every filled table for their end-of-month revenue. This is also the situation for restaurants that run special dining events.
With no-show guests and last-minute cancellations, restaurants not only lose revenue, but cannot recoup that revenue with walk-ins and waitlists.
Research shows 76% of venues in the UK “were impacted by no-shows in 2023, with an average of 8% of all bookings not turning up.”
In this article, we’ll look at ways restaurants can reduce no-show guests, as well as last-minute cancellations.
A no-show is a guest who makes a booking but never shows up, resulting in an idle, unfilled table.
For restaurants that rely on in-advance bookings, this is a dilemma.
For guests, there are many reasons why they don’t call to cancel their bookings. Of course, there are situations where ‘something comes up’ and the guest or group can’t come. But that’s rarely the case.
It’s important we understand why guests don’t cancel their restaurant bookings and don’t show up.
Research shows that the top reasons guests don’t cancel restaurant reservations are
They can’t find information about cancelling bookings (45%)
“They can’t be bothered [to cancel]” (27%)
They’ve forgotten they made a booking and the restaurant didn’t send any reminders (18%)
They’ve made reservations at several restaurants and decide which one to go to when the time comes.
Reasons 1 and 3 can be easily remedied with a restaurant management system, like Servme. Reasons 2 and 4 require work on the restaurant’s part.
To reduce the number of no-shows in your restaurant, you must first address the reasons guests don’t show up or cancel their bookings. You should also take precautions to protect yourself against no-shows.
1) Send reservation reminders
We’ve mentioned that one of the top reasons guests don’t show up or cancel is because they’ve forgotten about their reservation. An easy solution is to send reminders about upcoming bookings.
Reminders help guests and restaurants alike. With reminders, guests remember their bookings and restaurants can accommodate any changes in the number of guests or preferences.
Reminders will also help you uncover potential guests who may have forgotten about their reservation and let them cancel early.
If you’re using Servme, you can send email and SMS reservation reminders directly from your dashboard. You can also use WhatsApp messaging for restaurants to send reminders.
Make sure you select the best option to remind guests and not use all options at once.
2) Educate guests about the impact of no-shows
One easy and friendly way to reduce no-show guests is to explain how not showing up affects your restaurant and business.
This helps you connect and build a relationship with your guests. It also offers guests a sneak peek into the running of a restaurant.
Explain how no-show reservations mean you lose revenue twice. Not only do you lose revenue on guests who don’t show, but also you’re unable to take walk-ins because the tables are booked.
So for guests who "can't be bothered to cancel," help them see how not cancelling negatively affects your business. If a guest fails to show up more than 2 or 3 times, use Servme's auto-tags feature to label them as frequent no-shows. This can help prioritize bookings when this guest makes another reservation in the future.
3) Create a no-show policy
One of the top ways to reduce no-shows is to create a no-show policy. Include it in your restaurant reservation widget to ensure every guest who makes an online booking is aware of it.
You can give special attention using colors, special fonts, bold, underlined,…etc.
Your no-show policy should include what happens if guests don’t show up or cancel ahead of time and how long you will keep a table booked.
4) Offer flexible reservations
Offering flexible table bookings is another way to reduce restaurant no-shows.
Flexible bookings mean guests can change their reservations, without incurring any reservation or cancellation fee, within a specific time frame.
For example, you can let guests change their bookings over the phone or your reservation widget, free of charge, 48 hours or 24 hours before their booking.
Let guests know about your flexible reservation policy and how it works in your restaurant policies.
5) Make it easy to cancel reservations
To reduce no-shows, make it easy for guests to cancel their reservations.
For example, restaurants using Servme, can have guests cancel their bookings
Through the reservation widget
By calling the restaurant directly
By replying to the email/SMS reminder
By clicking on the cancel reservation button in the email/SMS
6) Create a cancellation policy
Besides enabling flexible reservations and making it easy to cancel bookings, it’s also important to explain your restaurant cancellation policy.
Like the no-show policy, create a late-cancellation policy to ensure guests don’t cancel at the last minute.
Your cancellation policy helps you reduce cancellations, no-shows, and the impact of lost revenue.
Your cancellation policy should include
How long before a booking guests can cancel for free or without incurring a charge
What the cancellation fee is and when is it implemented
How much a guest will incur if they cancel 24 or 48 hours before their upcoming booking
If they pay a full in-advance booking for a dining event or special menu, how much of that fee do they get back?
Further reading: 15 Reasons to Use Restaurant Event Management Software
7) Use reservation fees
One of the top ways to increase your restaurant revenues and reduce no-shows is to collect reservation fees and deposits.
Guests who pay a pre-booking fee are more serious than those who don’t. They intend to come.
Reservation fees and deposits tend to be per person. So, if it’s a large group, they’re more likely to call in-advance to reduce the size of their booking, if needed.
In addition, collecting booking fees ensures you secure a portion of your revenue in-advance.
8) Keep track of regular no-shows
Prioritize who can book a table at your restaurant. This isn’t applicable to first-time guests, but to people who have visited and made reservations in the past.
If you’re using Servme, you can use the auto-tagging feature to create tags for VIP guests, regulars, and regular no-shows.
When you see a profile for a guest who is a regular no-show, you can send them an email to let them know that their booking isn’t confirmed. If they’d like to confirm the booking, they have to pay a reservation fee, which will be deducted from their meal when they arrive.
9) Use reservation management software
Use a reservation management system, like Servme, that’s easy to use for restaurants and guests alike. For example, with the Servme’s reservation widget, guests can make, change, or cancel their bookings easily–depending on your reservation and cancellation policies and settings.
By now you have a few ideas to try out to reduce no-shows at your restaurant. However, it may seem daunting to apply some of these strategies.
For example, how do you collect pre-payments and deposits online? How do you enable payments on your website? What if a guest pays a deposit and cancels their reservation within the time frame of your flexible reservation policy? How do you return the money to their credit or debit card?
The easiest way to manage online and on-premise bookings along with payments is to use a restaurant reservation management system.
Servme’s reservation management software not only helps you accept online bookings using a reservation widget, but also helps you
Apply cancellation and no-show fees
Manage seating and table arrangements with floor planning software
Create, build, and improve guest experiences with a restaurant CRM
Build retention, personalize marketing, and boost sales with templates for SMS and email marketing campaigns
Create and manage online and offline waitlists, which you can turn to when guests don’t show up or cancel at the last minute
Manage multi-location restaurants and F&B groups
Track your source of bookings and get a clearer understanding of your guests with restaurant analytics
Increase restaurant reservations through various marketing integrations, such as direct bookings via Facebook, Instagram, Reserve with Google, Tripadvisor, and others.
Wrapping it up
Failing to take steps to reduce no-shows in your restaurant or chain means losing revenue on almost a daily and weekly basis.
In today’s trillion-dollar restaurant industry, it’s imperative restaurants protect themselves against no-shows and last-minute cancellations.
Use the above tips to reduce the number of no-show guests and build awareness about the negative impact of no-shows.
It’s worth mentioning that with no-show and cancellation fees, you may lose guests. However, having clear policies about restaurant fees can go a long way in maintaining customer retention and building awareness.
It will also contribute to increasing your restaurant’s revenues and sales on both the short and long term and growing your restaurant business.
Want to see how Servme’s reservation management system lets you collect payments, manage bookings, and reduce no-shows? Book a quick demo to find out.
Nada Sobhi
Marketing
