The White Lion Pub in Covent Garden, UK.
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With lands no longer locked, pub and restaurant owners have a simple plea for punters: honor your bookings.
It has been estimated that drinkers and guests who do not cancel before canceling a reservation will cost the UK hospitality industry £ 16 billion ($ 22.2 billion) in 2019. Now, after more than a year of diminished trade, what was once a social sin might turn out to be a poison pill.
Pubs whose appeal is to provide a license to let go are uniquely vulnerable to Covid-19 restrictions. The UK lost more than 2,700 of them in January and February alone, on top of about 12,000 that research consultancy CGA had to shut down forever last year. This is more than a pub that goes broke every hour.
In America the situation is just as dire. The National Restaurant Association estimates that by December 2020, 110,000 places to eat and drink were closed long-term, if not permanently, as the industry lost nearly a quarter of a million dollars.
Of these restaurants and bars, bars and tavernas were hardest hit, while those that stayed open saw sales fall 65% year over year.
Even if President Joe Biden’s vaccine and infrastructure plans lay the groundwork for a miracle rebound, the association says this year’s gains are “not nearly enough” to offset the sector’s Covid-19 losses.
The data compiled by the reservation company OpenTable reveal the damage caused. “Even more than ever when restaurants reopen,” said Lucy Taylor, vice president of EMEA, in a statement. “It’s important that we are all aware of the impact no-shows can have.”
Unless customers warn a pub or restaurant that they won’t make a booking, the venue remains in their hands. According to Foursquare Group, an independent business agency based in the UK, “Restaurants use their booking information to plan staff and ensure they have enough inventory to fulfill their orders. If a customer doesn’t make their assigned booking, it is almost impossible for a restaurant to resell this table without notice. ”
Egil Johansen, owner of The Kenton, a multi-award winning pub in Hackney, east London, told CNBC on a phone call about his experience of no-shows when English pubs briefly reopened in December.
“We were fully booked and 30 people didn’t show up on a Friday. We turned people away. Those no-shows made up about half of our indoor capacity,” he said.
Johansen described the loss of business as “devastating” and highlighted the habit of some punters of booking tables in different locations for the same time slot, selecting one and not canceling the others, which was particularly daunting.
Regardless of Covid-19, around 60% of the new restaurants did not get through their first year before the pandemic. Now the companies that have survived are walking a fine line to keep the lights on: Compliance with social distancing rules puts a strain on the number of people companies can serve and, in many cases, forces them to cut their trading hours.
The venues can once again serve small groups outside of England and there is hope that the sector can recover. The latest data from CGA shows that almost half of English adults were back in the hospitality industry within a week of reopening.
At Kenton, Johansen said he was “very nervous” while waiting to open his doors on April 12th. The previous Monday he built a roof over the beer garden in case visitors were deterred by the city’s notoriously capricious weather.
To reduce the number of non-showers, the Foursquare Group has launched the #SaveMySeat campaign and asked the public to pay a deposit when reserving a table.
Louise Kissack, the group’s non-executive director of hospitality, says the goal is “to convey to customers that if your local independent restaurant asks you a small deposit when you book, it is simply their way of doing business secure and protect their future. “
For its part, OpenTable also penalizes people who do not show up. Lucy Taylor explains, “Repeat offenders who fail to show up for a reservation four times within 12 months will not be able to make future reservations through the app and website.”
Johansen has taken a different route – one he calls “deterrence, not bail”. The Kenton does not take deposits when booking, but does ask for visitor card details. “No money leaves your account unless you don’t show up,” he says. “The regulars don’t mind, as they’re used to putting a card behind the counter anyway. If people are serious about them showing up, they give their details.”
It’s still early in England’s reopening, but when Johansen spoke to CNBC, the Kenton was at full capacity every night with no no-shows. That first night he says, “The mood has just improved.”
However, visiting the pub created a problem for him. “I had to place another order with my supplier,” he laughs. “Otherwise I might not be able to meet the demand.”