Do Christmas no shows and last minute cancellations turn you into the Grinch? Here’s why you should enforce deposits on group bookings.
With Christmas right around the corner (less than 3 months….but who’s counting) and mince pies already stocked on shop shelves, customers are on the hunt for booking the festive season.
Trying to run a smooth restaurant service can often resemble a plate spinning circus act, of trying to get the right balance with staffing, food costs and overheads. Then add to the mix the busy festive season, the dreaded no shows and the last minute cancellations and you could be one plate smash away from a significant hit to the bottom line and turning into the Christmas grinch.
According to an article from Big Hospitality at the beginning of the year, an online booking platform found that “over a third of UK diners say they have failed to turn up for a reservation”. You may ask, is it worth enforcing deposits on larger bookings over Christmas to protect your revenue?
Costs of a No Show / Late Cancellations
So let’s look at the actual cost of a no show. If the no show was for example a Christmas party of 10 and we say your festive 2 course set menu spend is £/$/€25 per person, and your gross profit before staff and fixed costs is 70% – then this no show costs you £/$/€175 and your profit (or rather contribution to costs) would be £/$/€175 if they had turned up. That’s a big figure along with the extra cost of a few merry sherries to lose, plus the loss of 15-20 min service time to confirm if the customers are actually going to turn up.
Even if the table was to turn up but only 5 showed due to last minute drop outs, you will still be down £/$/€87.50 and the possibility of another booking of 5 that you might have earlier turned away due to no availability! So you might be thinking from crunching the numbers….if only you had taken a deposit of £10 per head to cover the basic costs for that party booking so that you wouldn’t be out of pocket.
If you are not entirely sure if deposits are right for you, we have another great post looking at the pro/cons of deposits vs. holding credit card details.
Benefits of Enforcing Deposits
So obviously the main reason for deposits is to secure and protect your valuable restaurant revenue but there are also a few other benefits.
- Reduce and possibly eradicate the number of no shows
By having clear deposit and booking T&C’s, it will deter parties that book for 3 or 4 restaurants at the same time before finalising their plans. This way you know these larger parties are 90% going to attend – 10% unforeseen circumstances.
- Efficiently budget for staff and keep team morale
By knowing you are covered financially for larger bookings, you will have a better control on staff rota and not over staff. This can boost team morale by not having to let casual staff leave early due to a quiet restaurant that wasn’t anticipated.
- Your in control of the deposit
Rather than taking full payment upfront which could discourage bookings, deposits allow you to control and decide if given certain circumstances the customers should have it returned. With simpleERB deposits, you control the booking type that require deposits along with the ability to monitor overdue payments easily with reports.
simpleERB deposits are quick and secure to set up
Deposits are easy to set up within simpleERB with Stripe integration and you can rest easy knowing customers details are safe and secure and not being left around scribbled on paper notes.
You can find below some FAQ articles with information;
- How do deposits work in simpleERB with Stripe?
- How to set up deposit booking rules
- How to monitor overdue deposits easily.
If you have any further questions about deposits or would like a copy of our payment set up guide, please get in touch via help@simpleERB.com
Image source – Pixabay