No-shows – when a guest makes a reservation but fails to uphold it – can cost hotels millions of dollars each year. That figure doesn’t even account for no-shows at food and beverage (F&B) venues, which happen 20% or more of the time. A strong, consistent no-show policy can prevent your hotel from these losses.
Beyond shirked room reservations, hotel no-shows also happen throughout F&B venues and amenities. Here’s a closer look at these scenarios.
Rooms: The most obvious type of hotel no-show is when a guest who booked a room fails to show up.
Food and Beverage Outlets: This no-show occurs when a diner reserves a table at your restaurant and doesn’t show up or let you know they can’t make it. These missed bookings are especially egregious during busy times, like Friday dinner service or Mother’s Day brunch.
Amenities: You ask guests to book conference rooms, fitness classes, tee time and spa services in advance. When guests fail to appear at the time of their appointment, this is considered a no-show.
How Do No-Shows Hurt Hotels?
When a guest fails to show up for a hotel reservation, the business suffers in a number of ways.
A reservation is an agreement that you will hold a spot for a guest in exchange for them eventually paying for the service. When a guest who makes a reservation fails to appear, your business doesn’t generate the revenue it expected to make.
No-shows create opportunity losses for your hotel whenever you have to turn walk-in guests away because you’re holding a spot for a guest who made a reservation. If the reservation turns into a no-show and you turn a walk-in guest away, you may not be able to recoup either party’s business.
Reservations help make the unpredictable hospitality industry a bit more predictable. Your hotel staffs up according to bookings. If half of your reservations don’t show up, your business might end up spending more on labor than generating revenue.
How to Handle a No-Show Situation in 3 Steps
Regardless of how frustrating no-shows can be, with the right approach, your hotel can turn a no-show into a loyal guest, or at least recover the business you missed out on.
1. Find Out Why the Guest Didn’t Show Up
First, get in touch with the no-show guest via the contact information you have on file and politely ask why they weren’t able to make it. Oftentimes, no-shows aren’t done on purpose, which is why it’s important to approach these conversations with empathy and understanding. Guests may have had an emergency or simply forgot to cancel the booking, so use phrases like “we missed you” and “we’re reaching out to help improve our hotel” to encourage guests to share feedback.
Pro Tip: Save time and labor costs by automating this process via email. A guest feedback solution can immediately send guests a survey when they’re marked as no-shows.
Whether the guest made a room reservation or booked a table at a restaurant, keep them on your email list and encourage them to follow you on social media to stay top of mind. Keep in touch with local guests by periodically sending them invitations to make a reservation.
3. Use Feedback to Improve
Finally, use feedback from no-show guests to improve your business. Look for patterns in why customers don’t show up. If a guest says they wanted to reschedule but didn’t have any easy way to do so, look into reservations software that better meets your guests’ needs.
Implement these best practices to curb cancellations and no-shows.
Take Reservation Deposits
Collect a deposit in order to hold a room, table or service for guests. When guests make a deposit, they’re literally invested in the booking, and are less likely to cancel or fail to show up.
For rooms, the deposit could be equivalent to one night or half of the stay.
For restaurant bookings, take a flat fee per table or person. Most restaurants charge between $15 and $50 per reservation. Reservation software makes it easy to collect payments for deposits online and automatically refund them when guests check-in.
Collect No-Show Fees
Your hotel loses money when you hold a spot for a guest that doesn’t show up. Recoup some of these losses by collecting a fee when guests fail to show up or cancel a booking on short notice. Make the fees significant enough that guests will keep their reservation, or will cancel or rebook within your cancellation period.
Place Your Hotel’s No-Show Policy Front and Center
In order to avoid calls from angry guests who were charged a no-show fee, be transparent with your hotel’s cancellation policy. Make sure it’s front and center during the booking process, so guests know what they’re getting into.
Make it Easy to Cancel or Rebook
If you plan on taking deposits and enforcing no-show fees, you have to make it easy for guests to rebook or cancel their reservations. Make reservation modifying options obvious on your reservations platform and in reminder messages.
Send Your Hotel’s Cancellation Policy Upon Booking
In addition to placing your hotel’s no-show and cancellation policy front and center during the booking process, you should reinforce it by including it in your reservation confirmation email. In case guests missed it the first time, they’ll find it here.
Automate Booking Reminders
With short staffing plaguing the hospitality industry, you need to make the most of your staff’s time. Instead of having employees manually call guests to remind them of reservations, automate confirmations and reminders. Look for a reservations solution that offers two-way SMS reminders so guests have to take action to confirm they’ll make it.
Examples of Effective Hotel No-Show Policies
Check out these examples of hotel policies that dissuade no-shows for rooms, F&B outlets and amenities.
The Cosmopolitan, a luxury resort in Las Vegas, lets guests read the details of their rates before making a booking. Their cancellation policy includes a deposit equivalent to the first night’s stay and is charged to the credit card on file. If guests fail to show up for a room they’ve booked, their deposit is non-refundable. Guests can recoup their deposits if they give 72 hours’ notice of cancellation.
Inside Nashville luxury hotel the Joseph you’ll find Yolan, an Italian restaurant from Michelin-starred chef Tony Mantuano. It can be hard to find a table at this in-demand restaurant. Yolan discourages no-shows with its cancellation policy, which it makes obvious during the booking process. This hotel restaurant’s no-show policy states that a late cancellation (less than 24 hours before the meal) or no-show will incur a $25 fee per person that’s charged to the credit card on file.
In addition to its stunning rooms, the Cosmopolitan offers guests an array of spa services. On the spa’s booking page, guests can find their late arrival and cancellation policy, which states that there’s a four-hour cancellation window. If guests fail to cancel or move their booking within this time, the full value of the service will be charged to the credit card associated with the customer’s account.
Get Ahead of No-Shows
While guest cancellations are inevitable, the best remedy for mitigating no-shows is putting consistent processes in place throughout your hotel. By making your cancellation policy clear, you’ll save your hotel’s reputation from angry reviews. And, by implementing technology that collects deposits, enforces no-show fees and reminds guests of bookings, you’ll be able to increase revenue while saving money.