How Restaurants Can Deal With No-Show Diners

Though they're a problem for restaurants everywhere, no-shows are especially troublesome in fine dining. Wylie Dufresne's New York City restaurant wd~50 has had nights where 25 covers were no-shows. Restaurant Gordon Ramsay in London deals with no-shows nearly every day. Albert Adrià's Tickets was putting up with 10-15 no-shows a day just months after opening in Barcelona.

Alinea in Chicago was no different, a restaurant where just two canceled tables could mean a 100 percent loss of profit. "It was kind of an eye-opener to me as to how much of an impact no-shows had at relatively small restaurants," says Alinea co-owner Nick Kokonas. "And also how many people had dead grandmothers."

When Los Angeles restaurant Red Medicine took to Twitter last month to publicly shame diners who hadn't shown up for their reservations, it kicked up a discussion that has simmered in restaurants for ages: what can be done about no-show customers. While there might not be one solution for everyone, here's a look at the various ways restaurants handle the no-show dilemma and how effective they are.

1. Not Taking Reservations (or Limiting Them)

Obviously the most effective of the options, a restaurant that doesn't take reservations at all can ensure that it won't be stood up by diners. This is a system that works out just great for insanely busy restaurants like Barley Swine in Austin, TX. The 42-seat restaurant is a local favorite and general manager Jason James says that they started out without reservations because they didn't need to take reservations. Barley Swine was busy all the time.

In recent months, however, the restaurant has moved over to a limited reservation system. James explains that while the restaurant was slammed for most of the evening, things ran a little slower at 6 p.m. and at 9 p.m. And so Barley Swine very recently signed on with OpenTable to do limited reservations during off hours in hopes to fill up the dining room around the clock. In that time, James has already noticed no-shows creeping in. But it's not something that really bothers him. "A no-show [later in the evening] is a gift to those that are waiting," he says. "The no-shows in the beginning, they're annoying, but they're not make-it-or-break-it for us."

Barley Swine [Photo: Foursquare]

So, clearly, a red-hot, smallish restaurant that turns over tables multiple times in an evening can easily get away with abolishing reservations. But, as Wylie Dufresne puts it, not taking reservations "is only effective if you're the flavor of the month." The average restaurant is not going to have that kind of devoted clientele that is willing to wait for an hour or more for a table. And Kokonas says that he has found at the reservation-less Aviary that "essentially it drives away some customers that don't want to wait in line." That phenomenon, he says, results in some odd nights when there's no wait at The Aviary because would-be customers assume there is a wait and are put off by it.

Geography is another potential drawback for doing away with reservations. Krissy Lefebvre, a partner in the newly opened Ludo Lefebvre/Jon Shook/Vinny Dotolo collaboration Trois Mec, explains that relying on that kind of walk-in traffic just isn't practical in a city like Los Angeles. "In cities like New York or Chicago where people can walk around the city and have back-up dining choices within a couple of blocks, it is a great system, but in LA, its simply just not possible," she says via email. "People won't drive an hour just to hope they get a table."

People just don't suddenly decide to go and eat in a three-star restaurant that day.

And what about fine dining, Michelin-level restaurants? Well, while walk-ins might save Barley Swine when no-shows start racking up, fine dining restaurants tend to not have that kind of foot traffic. These are dining destinations that people pick for special occasions. Though they might have extensive waitlists, it's a difficult task to pull someone in from the waitlist for a same-day reservation. And as Restaurant Gordon Ramsay chef-patron Clare Smyth says, "People just don't suddenly decide to go and eat in a three-star restaurant that day."

Conclusion: Abandoning or limiting reservations is EFFECTIVE for small, newer, buzzy restaurants. INEFFECTIVE for fine dining, and SOMEWHAT INEFFECTIVE for neighborhood staples.

2. Overbooking

All restaurants have a choice between overbooking their dining rooms or booking them to capacity. Overbooking is the airline philosophy of doing things: Allow two passengers to book the same seat and cross your fingers that one of them doesn't show up. It's an economic win for the airline, which makes double the profit off of the same seat, but a pain in the ass for their customers. It's the same idea for restaurants. When you book two groups for a 7 p.m. reservation and one of them doesn't show up, you're still covered.

Overbooking has long been an easy financial fix for restaurants. In 2008, Frank Bruni wrote for the New York Times that the economic downturn had brought with it an increase in overbooking at New York City restaurants. Donatella Arpaia told Bruni at the time that Mia Dona was accepting more reservations between 7 and 9 p.m. rather than lose potential guests completely. As Bruni wrote, "Even if this means lengthening diners' waits for reserved tables, she, like other restaurateurs, wants to make sure that no-shows don't cost the restaurant money."

[Photo: Bikeworldtravel / Shutterstock.com]

That sentence reveals both the explanation for and argument against overbooking. Sure, a restaurant can get away with overbooking when one of their guests ends up being a no-show. But most people do show up for their reservations. And those people don't wait to be kept waiting for tables that had been promised to them at a certain time. They might leave; they might complain; they might never return.

And for fine dining restaurants especially, overbooking flies in the face of hospitality. Located in Virginia's Old Town Alexandria, Restaurant Eve is a place where people celebrate special occasions. Dinner in the 34-seat Tasting Room takes some time and people tend to linger. Co-owner Meshelle Armstrong explains via email, "If we are lucky and we can count on our average dining time, maybe we will turn the table — twice." Restaurant Eve, she adds, doesn't want to ruin someone's anniversary by kicking them out early to turn over the table. That's not hospitality.

Conclusion: Overbooking is EFFECTIVE BUT KIND OF JERKY.

3. Requiring Credit Cards and Contracts

One somewhat common method of mitigating no-shows, particularly among higher-end restaurants, is asking customers for a credit card number to hold a reservation. Walt Disney World's restaurants charge $10 if given less than 24 hours notice. Restaurant Eve charges $25 per person and includes a reservation agreement if the party is larger than six people. Massimo Bottura's three-Michelin-star Italian restaurant Osteria Francescana cannot actually charge cancellation fees, but general manager Giuseppe Palmieri says he has had some success by bluffing. He'll ask for a credit card if a diner appears to be wavering on a reservation.

Diners seem to take making reservations more seriously if faced with serious charges.

For Coi owner Daniel Patterson, the higher the charge number, the more effective the policy. Patterson told the Wall Street Journal last year that he initially started with a $25 cancellation fee, then bumped it up to $50, but it "wasn't until he upped the amount to $100 that the [no-show] rate dropped from 20% to 10%." In the same WSJ article, Eleven Madison Park's Will Guidara says that the New York restaurant only has to charge its $75 fee a couple times a week, down from eight to 10 no-shows a night. So while it doesn't cut out no-shows entirely, diners seem to take making reservations more seriously if faced with serious charges.

Restaurant Gordon Ramsay [Photo: Official]

Speaking of serious charges, London's three Michelin star Restaurant Gordon Ramsay charges $225 per person for a cancellation within 48 hours of a reservation. "We have 41 members of staff to pay. We always have a full team and the produce is bought. It's a business to run at the end of the day," explains head chef-patron Clare Smyth. "As I say, if we didn't have a cancellation policy, we would find that people wouldn't show up or people would book months out just in case, just to make sure they got a table and then they've got no need to turn up. They've got nothing to honor that."

Still, Smyth admits that the policy only works "to a degree." To evade the charges, she explains, diners will sometimes just cancel their credit cards. Other times, those cards might not have sufficient funds on them. This is a problem that both Dufresne and Kokonas have encountered as well. Kokonas points out that Alinea once also had a cancellation fee of $100 per person within 24 hours of the reservation. But, he says, the same diners who would neglect to cancel in time — and he's quick to add that this is only the extreme minority of all diners — would also place stops on their credit cards to prevent the cancellation fee from being paid.

And, of course, credit card companies tend to take the side of their customers rather than the vendors in disputes like this. Dufresne cites this as one of the advantages of reserving through OpenTable. At wd~50, he can make future diners sign an agreement that allows OpenTable to charge them for a canceled reservation. That said, Dufresne says that he'd "much rather have a deal with Visa where I could charge you through Visa. But to the best of my knowledge, Visa doesn't support that." Dufresne points out that while other industries — airlines, dentists and even the spa — have legal recourse to recoup no-show losses, the restaurant industry has very little legal recourse.

Conclusion: Taking credit card information is SOMEWHAT EFFECTIVE as a preventative measure, especially as the charges increase. It is SOMEWHAT INEFFECTIVE for actually recouping losses due to no-shows.

4. Tracking Prior Offenders

When you cancel a reservation at wd~50, an employee notes this in the restaurant's database. When you've racked up numerous no-shows, Dufresne says, eventually the restaurant will no longer accept your reservations. There are many such people in wd~50's database. Kokonas said Alinea also kept track of repeat cancellations before it transitioned over to tickets. Back then, he says, there were some people who had dined at Alinea once, but canceled on it 14 times. "Do you want to take that booking then?" he asks. "Does it even mean anything if they book? Of course not."

And these fine dining establishments are far from the only restaurants tracking no-shows. Believe it or not, any restaurant that uses OpenTable is essentially doing the same. Ann Shepherd, senior vice president of marketing for OpenTable, explains that the reservation system notes when a diner does not show up for a reservation and will deactivate a user's account if four no-shows are recorded within a 12-month period.

Beyond that, she says, OpenTable's entire system seeks to minimize the problem by sending users email confirmations, reminders about their reservations, and reminders to cancel future reservations should they no-show.

Tracking no-shows is probably a great catharsis for restauranteurs who will no longer be duped 14 times by the same flaky diner. But it won't get no-show numbers down to zero. Dufresne points out that "there's a work-around that any halfway intelligent person can figure out: We don't have your picture." So even if one recurring no-show's name is banned in the system, that person can (and will) use the name of a husband, wife, sister, brother or just about any fake name they can dream up. Deactivated OpenTable users can surely just start up a new fake account in the Wild West that is the Internet.

Conclusion: Tracking no-shows is SOMEWHAT INEFFECTIVE BUT AWESOME.

5. Pre-Paid Ticketing Systems

No-show frustrations are what prompted Kokonas to develop a whole new restaurant reservation system when he and Grant Achatz opened Chicago's ever-changing concept that is Next. He says it was driving him "fairly nuts" to see so many cancellations and know that overbooking wasn't an option and that charging credit cards might not work. So, he says, he dreamed up the restaurant's ticketing system.

In this system, those who wish to dine at Next can see all the tables that are available and choose between a lower-priced off-hour table or a more expensive primetime table. This is a transparency of inventory that Kokonas believes has a positive psychological effect on diners who know they're not being lied to about availability. Kokonas also points out that the variable pricing scheme equals out in the end, adding "Your check average would be the same, but you'd even out the demand across all your days and times and you'd eliminate no-shows." And even if someone does no-show, the restaurant already has their money. Diners looking to cancel can sell their tickets online.

Ticketing worked so well for Next that Kokonas and his team launched it at Alinea as well. Kokonas says Next alone can sell $3 million worth of season tickets within just a couple of hours, and altogether the restaurants have sold more than $20 million worth of tickets. And, of course, no-shows are non-existent. Kokonas argues that even the complaints against the system might actually be strengths in this regard, explaining, "There have been some people that have said to me, 'I'll never come to your restaurant because I have to buy a ticket.' And I go, 'Awesome.' Because the person basically just told me, 'I could never make a commitment to going a certain night and I cancel all the time.' So I've just eliminated exactly the person I want to eliminate."

That said, other restaurateurs remain skeptical. Dufresne and Smyth each agreed that Kokonas' system is a great idea, but that they aren't sure they can see it working in either New York City or the UK, respectively. "I think it's a different ballgame in Chicago versus New York, and I'm not so sure that New Yorkers would settle for being forced to pay in advance," Dufresne says. "I think you'd get a lot of people saying, 'Oh really? There's 20,000 restaurants for me to choose from. Thanks, but I'll go somewhere else.' Unless we all agree to do it, it's just going to be tough."

Meanwhile, Restaurant Eve's Meshelle Armstrong also says she understands why other people might take this route, but that ticketing isn't for her, writing, "I guess I am old school. As far as 'tickets' I myself do not like the system or even the name of it ? the romance is taken away from dining. But that's me. I like to still talk to people and hear a voice ? when you have someone on the phone, you really get to know who's coming to dinner. People show you who they are just by how they make a reservation. Then you know what to expect from them and you can perform to suit who is dining. Once you sell them a ticket to dinner, you lose that personal touch."

So the Next/Alinea ticketing system remains somewhat untested outside of Chicago. But it seems to be gaining some ground among high-end restaurants. The Chefs Table at New York's Brooklyn Fare has been successful with a prepaid prix-fixe, and Kokonas points out that the Eleven Madison Park guys used his system at The NoMad rooftop last summer. And Austin's Paul Qui has said that he wants to use an Alinea-style ticketing system for the tasting room at his forthcoming Qui.

Kokonas says he's gotten a lot of interest in commercializing the ticketing system. Among these would be Trois Mec, the new Los Angeles restaurant from Ludo Lefebvre, Jon Shook and Vinny Dotolo. Last week, the LA Times reported Trois Mec is going to be using Alinea's ticketing system. Krissy Lefebvre explains to Eater that while the team learned a lot from the reservation lottery system they had for the LudoBites pop-up series, maintaing that seemed like too much to manage for a permanent restaurant space. And they'd had enough experience with no-shows to know that no-shows are a reality of the restaurant business. Lefebvre writes, "The last few LudoBites we fortunately did not feel much of an impact, but in a restaurant with 4 tables and 8 seats at the chef's counter, having one table decide not to come at the last minute would ultimately put us out of business if it happened every night."

The Aviary [Photo: Facebook]

So, she explains further, they knew that Trois Mec would need to do something to deal with no-shows, writing, "We looked at many options including building our own ticketing in system, which ended up making zero sense from a cost perspective. Vinny knows Grant, so we asked him to make the call if they would be willing to share their system. The rest is now history."

Beyond Trois Mec, Kokonas says unnamed restaurants in Canada and Europe are expected to roll out the ticketing system sometime soon. "As we slowly get more and more restaurants on, I think it's just so clear it's going to work for everybody," Kokonas says.

Kokonas even believes ticketing could work at casual, a la carte restaurants. In the coming months, The Aviary will move over to a similar system in which drinkers and diners can prepay $25 for a ticket and then have that amount credited to their bill. The system would even potential offering a discount on off hours with diners paying $10 to get a $20 credit. That experiment will be one to watch.

Conclusion: Ticketing systems are HIGHLY EFFECTIVE in eliminating no-shows, but their general success remains inconclusive due to small sample size.

6. Public Shaming

Another method of dealing with no-show diners is actually one that's a little more about restaurateurs venting their frustrations: shaming. Just as LA's Red Medicine garnered national headlines for naming its no-shows on Twitter, the Noma staff in Copenhagen got some attention months back when they posted — and later deleted — a photo on Twitter giving the finger to diners who had stood up the world's top-ranked restaurant.

And sometimes the shaming is done more privately. Dufresne says his restaurateur father Dewey Dufresne "has been known to call people late at night who haven't shown up hours after their reservation — and well after they closed — say, "Hey, we're still holding a table for you. Should we let it go?'" New York City chef André Soltner famously did the same as chef at Lutece. According to the New York Times, it was something Soltner never regretted.

While shaming customers might feel great, it's obviously not a very effective way of stemming the no-show problem. Kokonas says he understands how restaurateurs can reach a boiling point where calling out no-shows seems like a good option. But, he says, "I don't know that's what you want to do because you might instill some fear in your good customers. As I said, 5 percent of the people cause the problems for everybody else. What you really want to do is just eliminate those people."

Conclusion: As good as it may feel, shaming no-shows is INEFFECTIVE AND POSSIBLY DETRIMENTAL.

Conclusion

One final way to handle no-shows is simple: Make sure diners know that they are potentially hurting someone when they flake out on a reservation. The people who place reservations at multiple restaurants on the same night and pick one at the last minute might not realize how detrimental that is. Dufresne says he's "not interested in some sort of jihad against people who don't show up." But he does just want people to be aware of the issue. "It's okay that you can't make it. I can live with that," Dufresne says. "Life happens. But in this day and age to tell me that you couldn't get to the phone and call and tell me you're sorry you can't make it? I call foul."

Dufresne also argues that the media could do more to explain to diners that what might seem like no big deal is actually a serious hit to a restaurant's bottom line. Even if they're charging $100 a head, these restaurants are still just small businesses with slim profit margins. "It's something I think is shameful. People should really feel bad when they fail to call and they don't show up," he says. "Just call. That's all I'm saying. Just call. You're affecting people in a negative way that are just trying to scrape by to begin with."

[Illustration: Eric Lebofsky]

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