To take reservations or not? That is the question

Almost every week recently, I’ve read a piece written by an ‘opinion maker’ bemoaning the fact that they’ve turned up at a restaurant with empty tables, but been turned away because the tables are reserved.  This is almost equally balanced by restaurateurs complaining that they take reservations from customers who never show up.  So what’s going on, and what’s the ‘right’ thing to do?

Let’s start at the beginning.  There is no point in having a reservation system if supply is greater than demand.  But if demand is strong, the advantages of taking reservations are basically two fold.  First, it is possible to schedule customers so that capacity utilisation is maximised, for instance by being able to turn over each table twice in one evening.  Second, reservations also enable production to be smoothed, so that peaks and troughs in  activity are reduced, and all customers get roughly the same level of service.  So clearly, a reservations systems benefits the operator, but also the customer.  An efficiently run restaurant can keep its prices down and deliver consistent service.

But there are downsides.  Customers have to plan ahead, so the restaurant loses any last minute business.   On the other hand, restaurateurs may end up with vacant tables from no shows.  So some operators have a no reservations policy, relying on customers who turn up being prepared to wait if no table is immediately available.  In this system, predicting the customer’s wait time accurately is not always done well, but it is important.  Customers may renege if kept waiting; or sit down unhappy that they have been made to wait longer than they were told.

This is often portrayed as an ‘either/or situation’.  But it seems to me that a sensible policy is one in which a proportion of tables can be reserved, whilst a few remain for walk-in customers.   In this context, a good forecasting system would greatly assist in knowing how to determine the ratio of reserved to non-reserved tables.  The number of reservable tables would be high during periods on low walk-in demand, but low when walk-in demand is high.  Hence the ratio may vary by day part, day of the week or month to month.  I suspect this what most operators do… so all the rhetoric in the media is really just a lot of hot air.

This entry was posted in Chap 08 Queuing and customers, Sector: Hospitality & Tourism and tagged . Bookmark the permalink.

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