No-shows are on the rise again. The number of customers not turning up for bookings has doubled from 6% in September 2022 to 12% in 2023, costing the industry an estimated £17.59bn per year. With the Christmas season just around the corner, operators need to be looking at how to minimise the risk of no-shows during this key trading period.
Here are 5 approaches operators can take to encourage guests to show up for their reservations:
- Send reminders
Staying in touch with customers once they have booked is an effective way to prevent no-shows – previous research in partnership with CGA by NIQ, uncovered that among consumers who haven’t fulfilled a booking because they forgot about it, more than a third (36%) said they would be more likely to show up if the venue reminded them.
Key to this approach is timing, with just over a quarter of people saying they’d like to be reminded on the day, while 38% prefer a few days in advance and 11% a week ahead. This needn’t become a hugely onerous task, technology can be employed to send automated responses and reminders.
- Deposits
There is no doubt that a large number of operators remain nervous about asking customers for deposits, but as over half (51%) of consumers say they would be willing to pay to secure their booking, it’s worth at least considering the policy for certain trading periods.
Used sparingly, for busy nights and key occasions – two thirds of people said they would be happy to pay a deposit for a special occasion (65%) or a special day (63%), for example – deposits can act as a powerful incentive. Blanket application, however would be damaging as some groups (notably 18 to 24-year-olds, according to the research) would not welcome them, nor are most people happy to pay a deposit for a more casual night out (only 41%, in fact).
High days and holidays only then, but think beyond the more obvious Christmas and Mother’s Day opportunities to include busy Saturday nights and/or particularly coveted areas, such as booths or snugs.
- Make it easy to cancel
The old school telephone remains important when it comes to customers wanting to cancel a booking, however, the demand for digital communication is increasing with 60% of people saying they prefer to be reminded about a booking via digital channels and 51% preferring to cancel using digital methods which could be via text, email, app or website.
In the fight against no-shows, then, offering choice is important. It also stands to reason that the more hassle cancelling is, the less people are likely to do it, so whichever method they choose, optimising technology to make it as simple as possible will reap rewards.
- Adopt an over-booking policy
While standard practice in some industries, such as airlines, it is not in common use in hospitality – but is it time for a rethink?
Like the use of deposits, generally, operators are wary of this idea but there are ways by which risk can be mitigated. By using data and insights from tech systems, for example, businesses can work out exactly how much they might be able to over-book without damaging business.
Combining this with a system in which some tables are always kept free for walk-ins and training for staff in how to handle such a situation will help minimise the risk, as it makes sense to take additional bookings in order to compensate for those that are lost.
- Take a targeted approach
In 2021, research revealed that of those who failed to show up for bookings young people and parents were the worst offenders – which is bad news as these are two of the most valuable groups to the trade.
When resources are tight then, targeting these groups with follow-up messages and making it as easy as possible for them to cancel could reap rewards. Similarly, if you have a bumper booking of young people or parents one evening, perhaps then is the time to consider overbooking or to implement deposits.
Four Cs to reducing no-shows:
- Communicate – your booking policy, so customers know what to expect on their journey from making a reservation to arriving in venue
- Consider – taking a deposit. Over half (55%) of consumers say they would be willing to pay a no-show fee if they didn’t turn up to their reservation.
- Confirm – stay in touch with customers after they have booked. Our research showed that among consumers who haven’t fulfilled a booking because they forgot about it, more than a third (36%) said they would be more likely to show up if the venue reminded them
- Connect – building loyalty is essential, especially among younger customers. Make the most of technology to build and reward loyalty and stay in contact with personalised communications to enhance that relationship.
Join the conversation and help us make no-shows a thing of the past
No-shows cost the hospitality industry an estimated £17.59 billion in lost sales every year. Join our group of passionate industry supporters to help spread the message far and wide and encourage customers to #ShowUpForHospitality.
