Guests make reservations for a number of reasons: to prevent a large group from waiting, guarantee a table for a special occasion, or impress a client or business associate. Sometimes, having a reservation just makes dinner (and the diner) feel a little more special. As a restaurant owner, how you take reservations can impact your business’s profitability and the success of day-to-day operations. Rather than relying solely on phoned-in reservations, many restaurants are partnering with mobile and online reservation services, installing non-refundable ticket systems, or doing away with reservations completely. These three methods for handling reservations are aimed at preventing losses caused by no-shows and last-minute cancellations, issues that can cost a restaurant tens of thousands of dollars each year in labor, resources, and lost profits.
OpenTable, founded in 1998, has long been the most popular choice for taking and managing online reservations, but other companies and startups have been trying for years to rival its success. Online and mobile services like Eveve, URESERV, Resy, and Reservation Genie have found this to be a difficult task because the leading reservation app is both popular and profitable. In 2013, faced with a growing threat from Urbanspoon’s Rezbook, OpenTable actually acquired it instead of continuing to compete against it. That same year, Yelp, despite a partnership with OpenTable, acquired SeatMe and turned it into Yelp Reservations, a venture that undoubtedly led to the partners parting ways in 2015.
Despite its benefits, OpenTable’s competitors can capitalize on restaurants that don’t want to pay for its associated fees. For example, the first URESERV feature listed on its website is its “affordability” and $60-a-month flat fee. Resy offers pricing as low as $89 a month, and Reservation Genie offers plans ranging from $49-99 a month. UK-based Eveve also offers a flat fee and has been competing against OpenTable since its American debut in 2011.
Some of the companies implementing similar services at a lower cost to the restaurant, like Resy, and a few up-and-coming apps like New York’s Killer Rezzy charge diners for premium reservations. Another app called Nowait allows users to see how long a wait will be and figuratively jump in line prior to arriving at a restaurant, which can feel like making a last-minute reservation.
The Ticketing Trend
Although online reservations are a common way for restaurants to manage reservations, some restaurants have turned to an efficient ticketing system to ensure profits. These restaurant tickets are non-refundable, priced per person, and must be purchased in advance, and they’re growing in popularity. Chicago-based booking software Tock was released in 2015 and grew from Nick Kokonas’s desire to have a better reservation system for his own restaurants.
Tock also presents its pricing in comparison to reservation juggernaut OpenTable and notes that hardware licensing and installation are free. It offers an introductory plan for $99 a month and an unlimited plan for $695 a month. The introductory plan charges a $0.99 cover fee for reservations, while the more expensive plan comes has no cover fee and includes a free month. Both plans include usability with an unlimited amount of users and devices, reporting and insights, and extensive management tools.
Some might decry restaurant tickets for making dinner more complicated, but the system’s popularity is proven by Tock’s presence in hundreds of restaurants in dozens of cities across the globe after only a year of availability.
Preventing the Disappearing Act
Selling non-refundable tickets for a table may not cut it in restaurants outside of the fine-dining realm, but it may be one of the only fool-proof ways to prevent profit losses caused by no-shows. The other, of course, is for restaurants to implement a no-reservations policy, a luxury that restaurants that have trouble filling seats may not have. Not accepting reservations can scare off potential diners or groups of diners who don’t want to wait in line, but popular restaurants will find that diners craving what they have to offer won’t mind.
Restaurants that want to offer reservations, even through an online management system, will have to find ways to lower no-show rates that go beyond the typical day-of confirmation call. Some restaurants have resorted to embarrassing no-shows, which can be controversial and can damage your reputation or relationship with other diners. Taking a credit card number with each reservation and charging a no-show fee can make the reservation feel more like a commitment, but actually charging a fee without the guest’s consent might skirt the lines of legality and be contested by the cardholder; requiring a deposit that is later applied to the final bill may be a more feasible solution.