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Ticket to reducing no-shows are pre-paid guarantees

Last minute cancellations and no-shows place a significant burden on the profit margins of any venue.

Many have used the 'no booking' policy to tackle the issue but another way has gained in popularity recently ... ticketing or pre-paid payment solutions that offer a guarantee that the diner will show up for their booking.

Two US restaurants owned by renowned chef Thomas Keller have experimented with the pre-paid system and will implement it fully in the new year. Melbourne's Prix Fixe, the first to adopt such a system in Australia, has embraced the concept very successfully.

"The notion of paying for something in advance or providing security against a booking or reservation makes a lot of sense and it's certainly not new," says Stevan Premutico, CEO of online restaurant reservation company Dimmi.  "I think Australians and consumers in general around the world have become conditioned to paying for flights in advance, paying for concert tickets in advance and I think naturally, it makes sense that at some point, people will also do the same with restaurant reservations."

At present the current system, in Premutico's eyes, is flawed as it enables diners to make a booking without a financial commitment and, as such, if they don't show up then there is no harm done. He contends that this type of non-committal system is crippling the hospitality industry.

Pre-paid guarantees are the ticket to reducing no-shows: Dimmi

He contends that there are two ways to approach this; through ticketing and guarantees.

With the ticketing option, it is very similar to going to the cinemas. If you are paying for meals at a restaurant, you would say pay $150 upfront for the food, then any additional balance and the beverages would then be paid for on the night.

The guarantee option would involve the restaurant taking the diner's credit card details which secures their booking and is effectively a commitment from the diner to attend the reservation. The reservation may be cancelled in advance but if it is cancelled at the last minute or don't show at all then the restaurant has an opportunity to charge a no-show or cancellation fee.

 

Hospitality Magazine  :  Hospitality Magazine, 11 December 2014