We spoke to The Daily Telegraph about pay-before-you-eat policies in restaurants. Taking deposits has historically raised a multitude of concerns with restaurants and customers alike, from the extensive regulatory issues around holding sensitive customer data, to the terms and conditions of cancelling a booking and how realistic it is to enforce them in the event of a no-show. Pay-Before-You-Eat goes a step further, and one too far. We provided the following comments –
Do you think restaurants introducing a pay-before-you-eat policy would be a good idea?
As restaurants begin to reopen, business owners need to invest their resources into ensuring they are working in a way that converts every sale into profitability, through cost control and sound financial planning. Whilst it makes good business sense to look for solutions to historic problems faced by our sector, the solutions need to be proportionate and realistic if they are going to make a positive impact. Introducing a ‘pay-before-you-eat’ policy would disproportionately deter guests from making a booking and could have a catastrophic effect on the sales of an already struggling business.
Do you recommend restaurants do it?
We wouldn’t recommend introducing a policy that has no historic performance data to rely on at an already uncertain and economically challenging time. The hospitality sector has campaigned for greater awareness and made its pleas to the public to only make reservations they can fulfil and to cancel ahead of time if they no longer need the booking. Restaurants should keep the conversation going with its guests during the booking process and constantly revisit and operationalise customer data to keep no-shows to a minimum. Operators should also ensure they have implemented every system and tool available that limit no-shows and cancellations, and to train and hold accountable their staff for utilising them fully.
Have you noticed more restaurants you work/have worked with are considering going ahead with it?
Our advice to clients is to improve and build upon the systems and tools available to limit no-shows and cancellations, and to rework its financial planning to avoid unexpected shortfalls. We haven’t spoken to any operators that are likely to go ahead with a pay-before-you-eat policy and if anyone is considering it we would recommend they seek further advice from an industry expert first.
Read the full article here – https://www.telegraph.co.uk/food-and-drink/news/restaurants-introduce-pay-before-you-eat-policy-reopen/