Without reservation: how to combat no-shows

04 May 2019 by

No-shows are estimated to cost the hospitality sector about £16b a year. They have been linked to the explosion of third-party booking platforms, which allow diners to book a table at the click of a button, with no meaningful engagement with the restaurant itself. No-shows are one of the biggest challenges facing hospitality businesses today. If a table goes unsold, that's it; the revenue cannot be recouped the next day.

While there's no real way to stop diners from reserving under different email addresses or to prevent multiple parties making bookings for different restaurants, there are many ways the very technology that's often cited to have caused the sharp rise in no-shows can help minimise the revenue loss associated with them.

It starts with engaging with the guest before their visit. "Booking reminders are a great way to keep contact going between diner and restaurant, but also helps to reduce no-shows - we've seen them drop 15% by implementing the reminder email, which is obviously a win for our restaurants," says Michel Cassius, chief executive of Bookatable.

According to Zonal's commercial director David Charlton, automated SMS reminders are even more effective. "Research shows that 82% of guests will open an SMS as they are short and to the point, which appeals to consumers. In comparison, emails only have an 18% open rate and often end up in the spam filter, so are easily missed," he says.

At OpenTable, as well as sending diners notifications ahead of their reservation, which allow them to easily change or cancel in advance, people are prohibited from booking multiple reservations during the same period and from making further reservations on the platform if they no-show four times in 12 months.

Online reservation system ResDiary has similar systems in place - including branded booking widgets designed to build a relationship between the diner and the restaurant from the very beginning of the process, personalised, venue-branded emails and SMS reminders - which can all be tracked through the system.

Yet, if restaurants are serious about stopping no-shows, says ResDiary's co-chief executive Richard McCandless, they need to take some form of monetary deterrent too. "The only other way is to stop taking bookings," he says. "And for most places, expecting to fill a venue via walk-ins isn't viable because diners just don't want it."

Options include tokenisation - storing customer card details to charge them if they don't show up - or taking deposits or full payments in advance. Bookatable, for example, has recently acquired EasyPreOrders (EPO), a platform dedicated to pre-payment, which offers restaurants the flexibility to take full pre-payment against a fixed menu or partial pre-payment or deposits to provide peace of mind while holding large tables during busy periods.

Recent research by Zonal and CGA has found that while being asked to pay a deposit for a booking is a source of irritation for customers, with 21% citing it as a major annoyance, it does become more acceptable for larger groups. Consumers in a group of fewer than eight say they are willing to pay an average of £4.55 per head for a midweek restaurant table, but those in larger groups will pay £6.04.

Of course, no-shows will still happen, and in those scenarios online booking systems are able - once a diner cancels or a restaurant lets them know about a no-show - to make that table available for new diners to book in real time.

It's far from failsafe, says Charlton, but it does give the added bonus of appealing to diners' desire to make spontaneous online reservations. "We live in a 24/7 society, where flexible working is the way of the world and consumers are no longer bound by the 9-to-5 workday routine. By deploying an online booking system that shows real-time availability, restaurants can meet the expectations of customers."

Optimising yield

Different systems have different strengths; while the likes of OpenTable and Bookatable, which have huge marketing engines behind them, are great for bringing in diners at the last minute or at traditionally quieter times, ResDiary hangs its hat on its table management system's ability to help restaurants optimise revenue from the covers they have.

"The best way booking tools can help venues maximise their revenue is ensuring their yield management, or pacing, is set up to optimise the covers they take," McCandless says. "It's something that hotels have been experts at for years, but restaurants are just catching up. This means they can turn tables easily, ensure the kitchen doesn't hit a 19.30 bottleneck, and minimise lulls where there are no arrivals."

In a similar vein, OpenTable has recently introduced a new tool, which opens up non-traditional seating, such as outdoor, bar and counter seats for reservations, allowing restaurants to use their space at maximum potential.

Meanwhile, technology like Access Collins' smart space finder can help multisite businesses redirect diners to another of their venues if the one they want to reserve is fully booked. Access Collins can also manage enquires from websites, social channels and phone, take deposits online and streamline the pre-order process by sending digitised menus that a group organiser can share, complete with allergen information.

Getting granular

As online booking tools collect data about every reservation a restaurant takes, the reporting aspect of these systems is also proving useful to operators.

For example, detailed data reports within Access Collins mean restaurants can analyse performance at either individual site or group level, figure out what is driving enquiries and bookings and make changes based on this data right away.

Similarly, ResDiary is looking into using data to predict the likelihood of certain types of bookings no-showing and has seen a huge increase in operators using the data they already have access to on the system to get really granular.

From 2018 to 2019, users increased the amount of time they spent using the reporting dashboard by 59%, mainly to drill down into how popular they are at certain times and vary covers and offers across the platforms on which they feature.

Data can also be used to judge staffing levels, says HOSPA chief executive Jane Pendlebury. "Keeping track of how many covers are required enables restaurateurs to staff adequately, ensuring requirements are met," she explains, adding that booking tools also free up staff members' time.

"With the facility to book online, staff aren't required to answer the phone as often, which has the knock-on effect of allowing them to focus on the guests already in the restaurant, enabling them to deliver a better guest experience, enhancing your reputation."

Personalising marketing and the customer experience

Some online booking systems can create guest profiles and integrate with EPoS systems, which means operators can use the data gathered by the system to interact with guests in a personalised way post-booking, enhancing the effectiveness of their marketing.

As Anselm Molloy, managing director for hospitality software company Hoist Group Ireland, explains: "Restaurants can now be very specific about exactly who receives relevant email or SMS messages, with tailored messages to different customers based on historic behaviour and booking patterns. Messages to each channel can be highly personalised to include names, images, videos and call-to-action buttons. It is the ultimate tool for spreading the word about your restaurant."

"You can also use the data collated during the booking to follow up to encourage reviews, either automated or individually - provided you have their agreement, of course," Pendlebury adds. Then, when diners do return to the restaurant, staff can use the information in their booking system to improve the experience for them. In fact, for David Moore, owner of Michelin-starred Pied Á Terre, it was this feature of restaurant reservation system SevenRooms that encouraged him to recently make the switch: "It's a joined-up front-of-house tool that connects the customer to the ticket at the table," he explains. "For instance, if you come in today and dine and come back next week, it will flag up your last week's tickets. If you came in and had two glasses of Champagne on arrival and a sparkling water, we can say when you return: 'Sparkling water with a glass of Champagne?'. We haven't had that before."

Exciting advances

For Pendlebury, one of the most exciting advances in booking tools over the last 12 months is the facility to log special requests and dietary requirements.

"Booking tools reduce the risk of human error - meaning allergies can be flagged appropriately and with a greater degree of certainty," she explains. "Of course, you can't account for human error in the kitchen - but removing the need for staff to manually record an allergy adds an additional layer of safety."

In the coming months, integration with mobile platforms is set to become an expectation. OpenTable has announced an integration with Instagram, whereby restaurants can include a 'reserve' link on their profile page, enabling diners to make a reservation direct from the platform; and Zonal is seeing more requests from customers to include online bookings as a feature of their order and pay app. As Pendlebury concludes, the restaurant experience will always be enhanced by human interaction. "Despite a trend to the contrary, restaurateurs must not hide behind technology and should always remember they are in the hospitality business; it's up to them to offer the guests their ultimate experience," she says.

Is AI the future of restaurant booking?

In the same way as Amazon and Netflix can recommend products or films, artificial intelligence is already being used by companies like Bookatable to learn about diners and help them find dining experiences that match their preferences and context.

But AI could be set to make an even bigger impact during the booking process itself. "Elegantly triaging the guests' needs, and even preempting them is the opportunity here," says Cassius. "Think AI-powered, natural language-processing chatbots."

Conversational AI is a technology that's being investigated by restaurant call centre TableBookMe, too, although co-founder Simon Davey says that the first version of a TableBookMe chat agent would be a hybrid version of human and AI.

"The AI would pick up the more everyday jobs and the human would deal with the more complex, qualitative questions," he explains. "From the user's perspective, it would be seamless; they might not even know."

The key for Moore will be to make sure it doesn't feel too robotic, but he does believe things are inevitably heading in that direction because of the cost savings.

Concludes Charlton: "The question is not how but when AI will move from the 'in home' to 'out of home' leisure experience. That is down to the industry and how quickly it is prepared to adopt AI."

Real time reservations

Sheffield-based Butcher & Catch has built revenue by investing in an online booking system.

Founders Adam Pierce and Liam Ridge decided to adopt Zonal's EPoS-integrated booking platform liveRES because they wanted to offer real-time reservations, which could be booked from any device and through any channel.

"Our restaurant is not located on a highly trafficked road, it's a destination restaurant, so immediacy and live availability to a reservations diary was key," Pierce says. Through the liveRES programme, staff can also analyse booking data and identify trends, customer table preferences can be accommodated without fuss and it's easy to keep track of meal stages and in-session diners, avoiding potential bottlenecks.

Says Pierce: "Through analytics we have been able to analyse data for busy times - such as Friday and Saturday nights - and identify when most customers were requesting a table. By tweaking available booking times, we are now able to fit in an extra sitting, significantly increasing the yield and revenue.

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