Cancelled restaurant reservations may not be optimal, but some restaurants are able to overcome the loss in revenue with walk-ins. But what about no-shows?
No-show guests hurt restaurants’ revenues and profit margins badly.
Data shows that on average 20% of guests don’t show up for the reservations they made (and don’t cancel either). Moreover, UK restaurants lose over GBP 17 billion in annual revenues because of no-shows!
There are many ways to reduce the number of no-show guests. But before you do that, you should inform your guests of your cancellation or no-show policy.
If your restaurant or chain has a reservation or cancellation fee or a no-show fee, then your guests should be aware before making a booking.
In this article, we’ll highlight the difference between reservation, cancellation, and no-show fees. We’ll also share with you easy-to-use templates to highlight your reservation, cancellation, and no-show policies.
A no-show policy is a statement where a restaurant or chain may impose a fee when guests make a booking but don’t show up. If guests fail to cancel ahead of time, this also makes them a no-show.
There are many reasons why restaurants create no-show policies. From limited seating to special events like New Year’s Eve to simply having restaurant rules.
Restaurants create and implement no-show policies to save their profit margins, reduce food waste, among other reasons.
It’s important you explain to your guests the differences between reservation fees, cancellation fees, and no-show fees.
Reservation fees: Guests may pay a fee to book a table. This usually comes in the form of a deposit or down payment to indicate commitment on the guest’s part.
Restaurants usually deduct the reservation fee from the total bill.
Cancellation fee: Restaurants may impose a cancellation fee if guests cancel their reservation without giving the restaurant enough time to make up for the lost booking.
Often, restaurants will charge the cancellation fee to the guest’s registered credit or debit card.
Many restaurants allow free cancellation within a specific time frame. This allows them to make up for the lost reservation without charging the guest for the cancellation.
No-show fees: A no-show fee is what a restaurant charges a guest if they neither cancel nor show up for their reservation. Like the cancellation fee, the no-show fee is charged to the customer’s registered payment method.
To maintain a good relationship with your guests, it’s important you explain your restaurant’s policies. These include reservation and cancellation fee policies as well as your no-show policy.
In this section, we’ll highlight the must-have points in any of your policies, along with a template you can use.
Restaurant reservation policy
Your restaurant’s reservation policy must answer the following questions:
How long before a planned lunch/dinner should the guest make the reservation?
Does the guest need to pay to make a reservation?
Does the reservation fee count as a deposit or is it a non-refundable fee?
Does this restaurant require a prepaid non-refundable reservation fee? (If the answer is no, then you don’t need to mention this)
Restaurant reservation policy template
Thank you for choosing [Your restaurant name]!
To make a reservation, please use the widget and select the date of your reservation, time, and expected number of attendees.
[Your restaurant name] has a reservation fee of [add value, ex: AED 50] per person.
[OR]
[Your restaurant name] has a reservation fee of [add value, ex: AED 200] per booked table.
Please add your credit card details to pay the reservation fee. This fee will be deducted from your final check on the date of your reservation.
You may cancel your reservation for free up to [2] days before your reservation date.
Restaurant cancellation policy
Your cancellation policy should answer the following questions:
– How long before my reservation is due can I cancel for free?
– Will I be charged for cancelling my reservation?
Restaurant cancellation policy template
Thank you for choosing [Your restaurant name]!
If you’ve made a reservation and wish to cancel, you may cancel for free [2] days before your reservation date.
After the reservation date, you will be charged a cancellation fee of [add value, ex: AED 50 per guest or AED 200 per table].
[OPTIONAL]
For special events like Christmas, New Year’s Eve, Mother’s Day…etc.
Should you cancel your booking on the same day, the cancellation fee may be subject to increase. Canceling your booking on the same day amounts to [add value, ex: AED 100 per guest, or AED 500 per table.]
The cancellation fee will be charged to your credit card once you confirm cancellation.
Restaurant no-show policy
Your restaurant’s no-show policy should answer the following questions:
How much will I pay if I don’t come on my reservation date?
How will I be charged for not coming after making a reservation?
Is the no-show fee per table or per number of guests at the table?
Restaurant no-show policy template
In the event that you’re unable to make it on your reservation date, we highly encourage you to give us a call or cancel your booking online.
You may cancel your reservation for free up to [24] hours before your reservation date.
If you don’t come on your reservation date and do not cancel your reservation, you will be charged a no-show fee of [add value, ex: AED 50 per person or AED 200 per table].
The no-show fee will be charged to your credit card.
Grab all three templates for restaurant reservation, cancellation, and no-show policies and edit them to suit your needs.
Improve reservation management with SerVme
Although having a no-show fee may not cover the entire cost of the cancelled meal, it reduces your restaurant’s losses.
It’s also a great way to reduce the number of no-shows.
Using a restaurant reservation management system like SerVme allows you to easily implement reservation, cancellation, and no-show fees.
With SerVme you can
Decide how much you want to charge per reservation, cancellation, and no-show
Decide if you want to charge a fee per table or per person
Decide when the no-show fee is deducted from the guest
Communicate your reservation, cancellation, and no-show policies clearly
Make it easier for guests to make reservations via your website, mobile app, and social media platforms like Instagram.
Gather guest details like phone number, email, and credit card information and log them into guest profiles
Arrange tables and seating based on the number of guests per reservation
And much more!
SerVme’s restaurant management system comes with many essential features. SerVme also helps you improve guest experiences using guest experience management software and measuring restaurant guest analytics.
Wrapping it up
Guests don’t want to pay for an event or outing they didn’t go to. And as a restaurant, you want to keep your guests happy so they keep coming back.
At the same time, you want to protect yourself against lost revenues from no-shows.
It’s a tricky situation with pros and cons on each side.
That’s why it’s essential you explain how reservations, cancellation, and no-show policies work to maintain a relationship with your guests.
There are many benefits to using restaurant table management and reservation software like SerVme. Not only does it help you forecast your monthly revenues, but also lets you collect reservation, cancellation, and no-show fees.
Book a free demo to learn more about SerVme’s restaurant management and reservation software. (Don’t worry, we don’t have any cancellation or no-show fees!) 😉
Mohammed Rafy
Operations
