Cancellations and No-Shows Are Putting Strain on Restaurant Owners. They Should Invest in Data Solutions and Improved Customer Experience.

 

Cancellations and no-shows are revenue killers for restaurants. An empty table reserved for diners who don’t show up means a double loss—the original booking and potentially other customers who could have occupied that table.

The hospitality industry is grappling with this growing trend of last-minute cancellations and no-shows, causing nearly a fifth of restaurant, pub, and bar owners to contemplate permanent closure. According to data from Barclaycard Payments, these cancellations are costing restaurants in the U.K. an average of £89 per customer, exacerbating concerns over summer profits.

Despite these challenges, the appetite for dining out remains robust, particularly among younger demographics, with over a quarter of 18 to 26-year-olds planning to dine out more frequently than in the past six months. A growing number of businesses are considering cancellation fees to mitigate the financial impact, with a third of diners admitting they would be less likely to cancel if a deposit was required.

In addition to implementing such policies, what other technology and strategies can restaurants deploy to combat cancellations and no-shows and increase revenue?

Larry Yu, Ph.D. and Professor of Hospitality Management at George Washington University weighed in on the situation, and he believes there are some effective strategies restaurants can take to curtail the amount of cancellations and no-shows.

Larry’s Thoughts

“To mitigate the potential financial losses due to no-shows, the restaurant managers should consider a positive, customer experience-focused solution. No-shows and last-minute cancellations are the main problems for restaurant operations, as they directly affect the revenues and profitability of the restaurant. The general understanding in the U.S. restaurant industry is that about one out of five customers often do not show up for restaurant reservations. At the industry level, local restaurant trade groups and national restaurant associations should launch effective public communications to raise consumers’ awareness of the serious financial consequences due to no-shows.

At the enterprise level, restaurant managers need to communicate a clear cancellation policy, which should be prominently shown on the website or clearly communicated by employees who take phone reservations. Particularly about deadline for cancellation, grace period for notifying the restaurant for running late, and at what time the restaurant cannot honor reservations. Lastly, if resources are available, managers should explore revenue management strategy by overbooking based on reliable data on no-shows from past operations.”

Article by James Kent

Follow us on social media for the latest updates in B2B!

Image

Latest

kraken machines
Superior, Wisconsin Company Launches KRAKEN Machines
November 7, 2024

Superior, WI—BARKO Hydraulics, a Superior, Wisconsin-based company focused on the production of heavy equipment for forestry and logging professionals since 1963, today announced the introduction of a new equipment brand targeting a variety of non-forestry industries, including general construction, scrap/recycling and disaster mitigation, including wildfire prevention and clean-up. President, Justin Rupar, expressed enthusiasm about the…

Read More
unified data
Breaking Down Silos with Unified Data: Enhancing IT-OT Collaboration and Workplace Security
November 7, 2024

As organizations navigate the complexities of hybrid work models, the integration of Information Technology (IT) and Operational Technology (OT) has become pivotal. Eptura’s 2024 Workplace Index Report highlights that businesses are increasingly investing in data analytics, integrated workplace solutions, and collaboration software to enhance operational efficiency and employee experience. This trend underscores the critical…

Read More
Cutting-edge tracking tech
Lamar IoT’s Cutting-Edge Tracking Tech Prevents Drugs & High-End Food Products from Perishing
November 7, 2024

As global supply chains grow more complex, the need for precise tracking and quality control is critical. Traditional tracking systems often fall short, merely pinpointing the location without monitoring essential conditions like temperature or humidity. But for industries moving sensitive items—like high-value medicines and perishable foods—real-time insights into the condition of goods are essential…

Read More
immersive
Cosm’s Visionary Approach to Evolving Entertainment Through Immersive Experiences
November 7, 2024

The entertainment landscape is undergoing a significant transformation, with immersive experiences leading the charge. Advancements in technology and evolving audience expectations are reshaping how people engage with content, as venues strive to deliver deeper, more interactive encounters. This episode of Pro AV Today, hosted by Ben Thomas, features Rachael Stockham, VP of Sales and Strategic Partnerships…

Read More