New initiative highlights the profit-slashing impact when guests ghost on reservations
With its new “Show Up for Restaurants” campaign unveiled Thursday, the online reservations site OpenTable said new tools for restaurants will be launched this summer to label diners as “potential no-shows,” based on previous reservation activity. The diner will be tagged to encourage the restaurant operator to be more proactive about confirming attendance.
OpenTable will also offer a “four strikes and you’re out” policy that suspends diners who don’t show up for a reservation four times. Other tools will include email and text reminders, prepaid experiences, availability alerts, customizable cancellation policies, and credit card holds, the company said.
“When a diner doesn’t fulfill a reservation, it significantly impacts the restaurants revenue,” said Debbie Soo, OpenTable’s CEO, in a statement. “At OpenTable, we believe we have a responsibility to help build awareness of this issue and leverage our technology in every way possible to reduce no-show rates.”
OpenTable estimates that more than 80% of restaurants across the U.S. have reopened after the pandemic shutdown, and dining traffic is nearing pre-pandemic levels, according to surveys done in partnership with YouGov.
With the industry facing severe labor shortages, the impact when diners don’t show up can be severe. The average profit margin of a restaurant is between 3% and 5%, so in a 40-seat restaurant expecting three seatings a night, as few as six no-shows can cut into profits. The restaurant Blackfish in Philadelphia, for example, said if six people don’t show up for one dinner, the restaurant loses 5% of its income.
As many as 28% of diners in America say they have not shown up for a reservation in the past year, OpenTable said.
The reservation management site, which is part of Booking Holdings Inc., has long been an advocate of no-show prevention, offering guests the ability to change and cancel reservations online. In 2017, OpenTable tapped famed chef/operators to go direct to consumers to encourage them to show up on time.
Contact Lisa Jennings at [email protected]
Follow her on Twitter: @livetodineout
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