Edited by: Joseph Klee, Qinghaiyan He, Victoria Mackay, Yiwei Lian, Zhongzhe Liu. MMH 16’
A lively discussion on reservations kicked off the 2015 Revenue Management Roundtable. It was widely agreed that the industry is expanding the idea of what a reservation is. It no longer needs to be simply a first-come-first-served process for restaurants to reserve tables with the risk of no-shows continuing to be a significant cost to restaurants.
In the casual dining scene in particular, more notice is being taken of blended reservation models with waitlists (ring as you leave for the restaurant and in return and in return, expedite the walk-in queue), ticketing and taking deposits all becoming more mainstream in an effort to drive down no-shows. It was generally felt that not many restaurants could get away with charging customers upfront, although consumers are appearing to accept this approach. Outside of the US, this is a more standard method, in particular in South East Asia.
A number of times it was noted that consumers today do not want to wait. The time between making a reservation and dining is shortening and decisions on dining out are being delayed. The concept of creating incentives to encourage reservations to be earlier was discussed and the idea of paying for reservations was discussed at length. Scalping (a restaurant putting a price on their own reservations) seemed much more palatable with consumers and the success of this approach would rest on the execution of premium pricing and the increased value of the experience.
Differential pricings was also a significant topic of discussion and a numbers of ideas were put forward on the premise that all times are not created equal. Some restaurants are communicating discount rates at lunch/off peak times, rather than premium rates at peak times, and in general it was felt that the industry is slower to adopt to this concept than consumers.
Finally, a number of points of views were put to the roundtable on the gathering of customer data and how it can be actioned. Thanks to loyalty programmes and reservations data, customer profiles are being built with the aim to create a better hospitality experience (and to made aware of “difficult” guests) but this process is still in its infancy and is an area to watch going forward.
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