COVID-19 Could Make Restaurant Reservations a Thing of the Past

As the Delta variant keeps COVID-19 a pressing concern, consumers are increasingly reluctant to commit to even short-term plans, and that’s starting to hurt restaurant franchises that rely on reservations to predict revenue and manage staffing.

Reservations at top Bay Area restaurants are now 15% more likely to be canceled compared to a few weeks ago, according to a San Francisco Chronicle report this week.

While restaurants can easily navigate reservations canceled ahead of time, a reservation canceled at the last minute means a table can be left empty for a time that it could otherwise be making money. Worse: A reservation no-show puts a restaurant table in an extended holding pattern. After pandemic shutdowns put a hold on restaurant revenue, the last thing some franchises can afford right now is an inefficient system.

Restaurant franchises are able to use this data to shift their operations toward a more walk-in-oriented approach, as highlighted by Eater San Francisco. 

For restaurant franchises, the good news is that adjusting to a walk-in model does not have to be an enormously disruptive pivot. For some brands, this might mean stepping away from reservations as much as possible. One relatively simple solution is to abandon reservations altogether, but that could be a dangerous overcorrection for restaurants that aren’t yet experiencing the strain of increasing cancelations. Restaurants may risk turning off previously loyal customers who appreciate reservations.

Still, it may be a worthwhile consideration to limit reservations, especially after in-person dining took a lasting hit at the onset of the pandemic. COVID-19 has led some consumers to anticipate the unexpected, and as once-creative provisions become commonplace, consumer action is bound to favor new strategies. 

COVID aside, consumer preferences seem to be shifting away from reservations anyway, favoring instead the ease and convenience of ghost kitchen models and delivery services.

Exclusively dine-in restaurants are left to navigate an upended landscape, one that lacks a similar form of innovation or creative advances. Delivery and drive-thru service is a priority for consumers now more than ever, but dine-in restaurants have some opportunity for innovation as well. Consumers have already grown accustomed to QR codes taking the place of traditional menus, and reservations could be the next big change.

Reservation website OpenTable has an option for restaurants to charge a $25 fee for a canceled reservation or no-show. The incentive is in place to ensure each table in a restaurant is accounted for, and customers making a reservation must submit credit card information in order for their reservation to be finalized.

This measure might scare away some customers, but it also ensures that some form of return is collected on every reservation, even the no-shows.