In this article, we’ll discuss some of the unique challenges of opening and running a successful restaurant in a big city like London, Manchester, or Glasgow. But you don’t have to come from one of those places to find these tips useful. If your area has high competition and high foot-traffic from tourists, you’ll want to read on.
Life in the big city can be very different for hospitality business owners compared to their counterparts in smaller towns. That’s not to say that things are necessarily better by default, as you’ll find out, many aspects are actually made harder by being in a big city.
Whether you’re looking to open a new venue or currently operating, it’s vital to your success that you don’t fall into some of the common traps of running a restaurant in a big city.
Thankfully, ResDiary has been a part of the hospitality industry for almost 15 years and in that time, we’ve gained vital knowledge from working with successful restaurants. That’s why our very own in-house expert, Petra Blazejovska, was excited to share four key ways in which you can overcome those big city challenges.
Over to you Petra!
- Tip #1: You’ve got to work harder and smarter to keep up with the competition
- Tip #2: Maximise your online potential to increase your bookings
- Tip #3: How to handle tourists and the higher chance of no-shows
- Tip #4: Do more with your data to build a loyal fan base
Looking for more general information on running a successful restaurant?
This is not a general guide to starting and running a successful hospitality business, as we’ll really be focusing on the unique challenges involved in running a restaurant, bar, or hotel, in a big city like London, Manchester, or Glasgow.
Fear not, though! You’ll find plenty of the awesome information you’re looking for elsewhere in our resources section. We’ve got great guides on getting more restaurant bookings, choosing the right systems, and creating loyal customers. Plus, articles on running special promotions for occasions like Mother’s Day, Father’s Day, and of course, the festive season.
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Tip #1: You’ve got to work harder and smarter to keep up with the competition
Did you know that London, for example, has nearly 15,000 restaurants (74 with Michelin Star status) and 3,500 pubs? They served a captive audience of nearly 9 million London residents, plus 16 million visiting tourists in 2022 (although pre-COVID numbers were as high as 29 million visiting tourists). This is mentioned in our article on the truth about running a restaurant in London.
It may go without saying that big cities have more restaurants, bars, and hotels than small towns. Naturally, this means there will likely be a much higher concentration of competitors in your area, so you’ll have to work harder to attract your share of table bookings. But that only tells a part of the story.
Your competitors, especially if they’ve been in business for a long time, are likely to be more savvy and evolved to survive in a highly competitive environment. They’ll have a good knowledge of the market and what’s required to attract diners, and may even have their own dedicated marketing staff.
They’ll also understand the importance of using the right technology to ensure their business is always running smoothly and at maximum efficiency.
In my experience, I’ve seen the most successful restaurants rely on data and automation to remove manual processes - cutting down on wasted time and staff costs. They tend to have good knowledge of the latest trends and the best systems for things like restaurant bookings, EPOS, customer relationship management, and HR.
They know how to squeeze as much value as possible from every service. Which is achieved not just by bringing in customers, but also by ensuring they retain them, and have excellent visibility and foresight into every aspect of their service. They make data-led decisions on things like staff and inventory requirements, which can help to keep their costs as low as possible - important when everything is much more expensive.
You’ll have to be equally meticulous in driving value from every booking to ensure your restaurant is successful in a big city. Remember it’s not just about what revenue you bring in, it’s also about keeping your outgoings as low as possible.
Tip #2: Maximise your online potential to increase your bookings
How and where customers book has evolved rapidly over the past decade. We’ve seen a massive shift towards online bookings in recent years, as the majority of customers now prefer to research a venue and book online.
That may come as no surprise considering the world we live in today, but if you’re looking for restaurant success in a big city, you’re going to have to offer more than online bookings on your website alone.
While a booking widget is a great start, you’ll need to be even more present online if you're operating in a big city to stand out from the crowd.
Most people nowadays will check out a venue’s social media accounts to see pictures of their menu and learn more about the experience they can expect to find. They may also read reviews on Google first and foremost, plus third-party sites such as Time Out or SquareMeal to decide where they want to make a table booking - after all, they’ll have lots of options to choose from. In essence, you need to be available everywhere (especially Google).
Firstly, I will say that restaurants in big cities, especially high-end restaurants, put tremendous effort into making their social media profiles as alluring as possible. They will most likely hire professional photographers to shoot their menu, they post regularly, and more often than not, they have dedicated marketers on their teams.
Secondly, and this is just as important, they make it easy for customers to make a booking there and then. We know how fickle people can be, especially online where the slightest inconvenience can be the difference between you making a sale or not. So, by making it easy for customers to book whenever and wherever they are online, these restaurants increase their chances of success.
When you’re choosing a restaurant booking system, make sure it offers the integrations you need to take bookings anywhere online. For example, ResDiary comes fully-integrated with many of the major channels such as Google, Facebook, Instagram, and Dish Cult. Plus, third-party sites like Time Out, SquareMeal, and First Table. The best bit is that all bookings that come through these channels will automatically be fed straight into your ResDiary system.
The bottom line is you need to be available to take bookings anytime and anywhere your customers might be looking online. Not only that, you’ll need to look your very best to seriously stand out, which is why we recommend you hire professional help with your marketing.
What about OpenTable?
I get this question a lot so I don’t mind answering it here. While OpenTable has a large audience online, it’s worth bearing in mind that they won’t just be promoting your restaurant to their users. In fact, there’s a good chance they’ll be promoting your competition too.
It’s also worth mentioning that you’ll pay a commission fee for every booking that comes through OpenTable, even if the customer cancels. We’ve seen restaurants come from OpenTable who were spending thousands of pounds per month on commission fees alone. You could add more talented members to your team with that money!
Tip #3: How to handle tourists and the higher chance of no-shows
No-shows can be a costly problem for any restaurant and that trouble is only compounded in a big city.
Pretty much everything about running a business is more expensive in a big city. It’s worth noting also that the value of every customer is usually higher too, as many restaurants will charge more to cover their costs.
Unfortunately, this creates a double blow of bad news when a booking doesn’t show up in a big city restaurant. Where the value of every booking is higher (because it has to be), the cost of that lost booking is amplified when they don’t show.
This is especially true if you’re in an area with a high tourist population, like London, Manchester, or Glasgow.
We’ve seen a trend where, quite often, tourists will make multiple bookings at once, then make a final decision later on - maybe based on which part of the city they end up in or simply what they fancy eating. Unfortunately, this also often leads to them forgetting to cancel as well.
To add to that, we hear that tourists often make bookings for larger groups of six or more people. Let’s imagine your average revenue for dinner is around £100 per head, which is realistic for many London restaurants. If one group of six ends up being a no-show, that’s £600 lost in revenue right off the bat. I’ve seen cases where it’s common for restaurants to have multiple, sometimes as many as 25, no-shows in a night!
Now that I’ve sufficiently scared you with some brutal reality, let’s look at how you can stop this from happening to protect precious revenue for your restaurant.
Start taking deposits and prepayments for set menus
The simple place to start is by taking card details and charging a deposit fee if customers do not arrive to their booking. While this has been the most popular option for ResDiary users, we have seen cases (usually in big cities) where people will just cancel their card to prevent being charged.
The next step we’ve seen restaurants take is to ask for booking deposits up front, which are then taken off their bill at the end. In London especially, some high-end restaurants are asking for the full set menu price in advance, and actually, people have been open to that for the right experience, like a taster menu for example.
While there are a number of ways you can use deposits to protect your bookings and your revenue, there are three fundamental things that they all require:
- A clear and transparent cancellation policy that customers can read when they book
- An an easy way to cancel their booking within the accepted time-frame
- A safe way to store card details or make payments in advance.
If you’re using a restaurant booking system like ResDiary, you’ll be able to create and manage your cancellation policy and deposits all in one place. This also allows processes such as taking card details, payments, or even pre-orders, to slip seamlessly into the booking journey.
Tip #4: Do more with your data to build a loyal fan base
We said the most successful restaurants in big cities are tech savvy, using data to help them run smoothly and efficiently. There’s more you can do with your data to drive up diner loyalty too, which is vitally important in an area where customers have so many options.
When you take an online reservation, you aren’t just capturing that table booking, you’re inviting someone into your world to experience everything your brand has to offer, and learning more about them too.
With this vital data to hand, you should create enticing offers to attract repeat business by bringing customers back again and again. Whether that’s through special offers, gift vouchers, events, or even just announcing your latest menu offering, you’ll have a direct channel to communicate with them once they’re opted in - a channel that your competitors can’t touch!
ResDiary integrates with a wide range of hospitality systems to help you capture information about your customers, plus it has its own feature for creating and managing promotions. Our big city restaurants love this, as it helps them to create a lasting connection with their customers and provide a unique experience the next time they come in. Over time, you can create even more targeted campaigns with the more information you acquire, which can help you turn first-time customers into dedicated diners.
As you now know, the stakes for restaurant success are certainly higher in big cities. With higher costs, every pound you spend must have a positive impact and every pound saved can have tremendous value.
The most successful big city restaurants work both harder and smarter, relying on data and automation to help them run as smoothly and efficiently as possible. They also put more effort into increasing their online presence, knowing full well the need for customers to be able to book any time and anywhere they look online.
If you’d like to learn more about setting your restaurant up for success, then be sure to book a free consultation with our team at ResDiary.