Is overbooking in restaurants a good idea? Quite simply, it depends on the type of restaurant.
There are ups and downs, positives and negatives to this story that all restaurants should consider. We let you know the best course of action for your venue to make sure your staff stay on top of their reservations.
What is Overbooking in Restaurants?
This is a common strategy in the industry reservation restaurants use to increase the chance of filling all their tables.
Overbooking means intentionally taking more bookings than tables available. Restaurants take overbookings when they expect no-shows for the night ahead.
Overbooking works best for restaurants with flexible cover capacities. A restaurant with a high number of covers and a flexible table policy — that half accepts reservations, half accepts walk-ins — could effectively use overbookings.
On the other hand, a small restaurant with few tables to spare should stay clear from overbooking strategies.
For overbookings to work, restaurant operators need to keep an eye on variables such as time of day (e.g., lunch or dinner), weather, and party size. Not to mention a restaurant’s rate of no-shows — arguably the most important factor in this discussion.
Types of Overbooking in Other Industries
There are other types of overbooking. The hospitality industry is not alone when it comes to these methods. In fact, it was the airline industry that pioneered overbooking techniques. These are still in popular use today.
Airlines around the world regularly oversell flights for the same reasons as restaurants: to limit losses. Ideally, airline companies want to keep their aeroplanes full. The best way to ensure this is also the crudest — to sell more tickets than they have seats.
Occasionally this has led to poor customer experiences as airlines have riskily gambled on whether they could overbook a flight or not. Unlike restaurants, however, airlines cannot easily work around a customer’s demands.
In the past, restaurants made the decision to overbook their tables around the 1970s and 1980s. As such, many restaurants have honed overbooking into a highly sophisticated technique. The best restaurateurs know the complete ins-and-outs of how many guests will (likely) show up in honour of their reservations.
This way table reservations become a game of chance, depending on the customer’s final decision. Like all games, there are wins and losses. Let’s explore them.
The 3 Pros and Cons
In every area of life, we tend to weigh up decisions — and restaurant reservations are no exception. Restaurants need to carefully consider both the advantages and disadvantages to use overbookings successfully.
All restaurants know that an empty table is money lost. While sacrificing guaranteed customer satisfaction, restaurants that overbook indeed make sure they fill all their tables.
“The best time to overbook”, said one restaurant manager, “is the tricky shoulder periods, when cancellations are likely”. For instance, if you have a city restaurant with bookings on a rainy day, overbooking up to ten per cent might be a good idea to ensure steady business.
Smart overbooking is all about assessing the situation on a step-by-step basis. Your restaurant will begin to know key information to tackle empty tables — e.g., peak hours, guests who frequently cancel, no-show trends, etc. As such, with an overbooking plan in place, restaurants now have an excellent way to deal with no-shows.
Not to mention that digital tools are available to enhance this process. Using a pen-and-paper system, variables are a lot of information to grapple on your own. However, they are well worth the effort. Today a digital system can do all the arduous work for you, offering up accurate analytics to predict overbooking trends.
One restaurant’s difficulty is another restaurant’s opportunity. Have two parties appear for the same table at the same time and some restaurants may view this situation as a challenge to overcome. Restaurants can devise strategies (i.e., offer sample food) to please both double-booked parties, if they appear.
This way restaurants sustain an overbooked guest’s interest in the interim during their wait for another table. Some restaurateurs have devised a twenty-minute rule that has worked in many instances. The rule is this: if the guest waits over twenty minutes for a reserved table, always send free sample food. The object is to ensure that the guest forgets that they are waiting.
Choosing to overbook can cause problems very quickly, particularly on a busy night. On a Friday evening a restaurant may book every table in advance. However one small slip can make operations difficult — a late arrival, for instance, or a group that decides to overstay.
In these instances overbooked parties will arrive, only to have the restaurant tell them they must wait for a table they reserved. As such the downfall is this: the restaurant risks losing customers on the spot. They have promised a customer a table, but sidestepped their part in the agreement.
Blind overbooking can do more harm than good to a restaurant. If your venue blindly takes in more bookings without any analysis of the variables, this can quickly result in problems. Calamity can ensue for instance when X amount of diners cancel for various unknown reasons, when your restaurant never expected them.
This puts a restaurant in the same spot it started from, creating more uncertainty about who and who will not show up.
In any case, your restaurant will need to train staff to manage and handle unforeseen circumstances. This means knowing how to manage guests as they arrive. Say both parties arrive for the same double-booked slot. You will have to tell one party to wait, causing potential disappointment, depending on the person.
The instability of this method could be dangerous for restaurants that are unprepared. Lose a party due to inadequate staff in the face of overbookings and you give them a very good reason for never returning.
Overhaul Restaurant Overbooking Problems
Blindly walking into this advanced technique is a strain on a venue’s energy and resources. The challenge creates unnecessary demands for restaurant staff, filling up a pool of uncertainty for guests and staff. Granted, a partial reservation policy with tables available for walk-ins could carry overbooked parties to the restaurant seat — but on busy nights there is no guarantee.
It’s far easier to automate data collection and use restaurant analytics. Both features of Carbonara App, a restaurant reservation system helps restaurants secure their hold over overbookings.
Even better: eliminate the need for overbookings altogether. Restaurants can now efficiently gather customer bookings via online reservations, using automated reminders to keep guests up to date on their reservations — a method that cuts down on no-shows.
Still wondering what is overbooking in restaurants? Or simply don’t believe us? Contact us today to learn more about how your restaurant can improve its reservation procedures.