News and Trends
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30 Mar, 2023
No-show diners remain a perennial problem for hospitality venues. Find out how restaurants and bars are using deposits to reduce the risk of cancelled reservations and how open diners are to different methods.
Whether business is booming or not, one thing all restaurant owners and operators still seem to encounter is the thorny issue of “no-shows” – diners who have made a reservation either online or over the phone but ultimately do not follow through for one reason or another, often without cancelling beforehand.
When you work so hard to maximise table bookings and fill the valuable space in your venue, it’s not only a nuisance for a party of diners to make it to their booking or cancel on time, it’s outright expensive too!
Even though it appears this is a challenge that will likely never go away completely (much like any challenges when running a successful hospitality business), some owners and operators are taking action to minimise the number of diners who don’t show up.
Get the full report on the hospitality industry in 2024 for UK and Ireland
Looking at the latest trends on perennial problem of no-shows
The ResDiary Beyond the Booking Hospitality Industry Report for 2024 found that more than a third (36%) of diners expect to venture out more often this year, that’s after 46% already dined out more in the previous year. While more diners making bookings should clearly have a positive effect on your bottom line, those who book and then don’t turn up are still having the opposite effect, costing valuable revenue.
According to that same survey, a whopping 76% of venues were impacted by no-shows in 2023, with an average of 8% of all bookings not turning up – that’s an increase from 5% in 2022.
8% may not seem like a significant number of no-show diners to some businesses, but the reality is that they’re costing venues thousands of pounds each year - the average loss in revenue because of no-shows totalled an estimated £3,621 per venue in 2023. Clearly, when you put it in that context, this is an issue that venues need to address.
So, what are the ways in which you can work to negate no-show diners in your venue? We’ll share two key methods venues use, explaining the key differences between them. Also here’s how some of the UK’s top restaurants tried to tackle no-shows in the past year.
Deposit first, then dine
Many restaurateurs have taken to introducing reservation deposits to ensure diners follow through with their plans and to cover their costs from lost revenue when a table is left empty.
While deposits have been in practice for a while, there was a slight drop in the number of owners and operators requesting a deposit for every reservation, perhaps fine-tuning their booking experience for when and how deposits need to apply. Our research shows that while 60% of restaurants surveyed required a deposit in 2023, that number is down 2% from the year before.
For instance, more than half (51%) of those restaurants required a deposit only when the reservation consisted of a certain number of covers – the average minimum number required to trigger a deposit requirement was nine covers. Only 9% of venues said they require a deposit at all times, a figure that’s down from 14% in 2022.
Details instead of deposits up front?
For owners and operators, the good news is that the majority of diners (62%) appear to be happy with booking deposits, as far as handing over their card details in order to secure a booking - then a charge is applied only if they don’t turn or or fail to cancel in time..
Many venues choose to take this approach and it’s similar to how hotels require a card on arrival to cover any unexpected costs, which can be more normal and less daunting for diners!
As you can see, this seems to strike a good balance between protecting your revenue, and of course, maintaining (perhaps even improving) your customer experience. It could be argued that the rise of online bookings and the utilisation of technology to automate the deposit process has helped to foster this change in attitude from diners - with COVID perhaps accelerating their adoption. Restaurant reservation systems can also add to this experience with booking reminders and easier cancellations now readily available.
These all help to make the booking experience more seamless, and the rules regarding cancellations and deposits more transparent. Diners appear to be accepting this practice as just another part of making a reservation, much like finding a menu online and planning what you might order before you arrive.
While the safety of payment details remains a concern for many diners (47%) it’s worth noting that ResDiary allows you to securely store credit card details, apply no-show charges, accept a deposit, or take full payment up-front for offers or set-menus via Stripe.
What makes a fair cancellation policy?
Tackling no-shows is an issue that most venues (76%) struggle with, and the evidence would suggest that nobody has the perfect solution, but there has been an obvious refinement of methods like taking deposits (or at least card details) and sending booking reminders.
Tools like restaurant booking systems can help you reduce no-shows. With a system such as ResDiary, for example, you can send automated reminders to those that have booked a table ahead of time. They can also help you by providing a link to your cancellation policy. For those who can’t make it to the table, a gentle reminder to do the courteous thing and cancel will make a positive difference, as you’ll then have time to re-sell their table.
Of course, setting a clear policy on cancellations is also essential for managing deposits and no-show diners. For example, 33% of customers believe that up to 24 hours is a fair window for cancelling without losing a deposit, while less than 20% feel that 12 hours’ notice is fair. Whatever window you choose needs to suit your business and your customers.
As you’ve seen above a well-managed reservation and cancellation policy will be a substantial saver for business in 2024. Set your rules for cancellations and make them clear to users whenever and wherever they book. Then, utilise tools like ResDiary to handle cancellations and deposit payments for you.
