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The simple rules of hospitality and giving customers what they want practically mandate the opportunity to call ahead and save a table. But in the current climate, under the right circumstances, that just doesn’t make sense for the bottom line.

Why Restaurants are Saying 'No' to Customers

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In an industry where the answer is always supposed to be yes, independent operators are finding it’s more productive and more profitable to say “No Reservations.”
By Brock Radke August 2016 Bar Management

When Greg Pearce moved his restaurant to a larger location in historic downtown Wake Forest, North Carolina, in 2012—going from just 36 seats to 120—business at Over the Falls started booming like never before. Over the Falls had always been something of a special-occasion destination, even as a casual restaurant, but demand for private parties and larger group reservations skyrocketed … and so did walk-in traffic. An adjustment was needed.

“We kind of became the place to go in our small town,” Pearce says. “Everybody wanted to come, and they wanted to bring their families and book parties of 12 to 18 people during the prime dinner hour around 7:30 p.m.” Chef/owner Pearce started researching alternative reservation policies but couldn’t find much of anything to expand his options. “There is really nothing to tell an owner how to deal with this situation,” he says. “The only thing I could find at first was The Cheesecake Factory.” (The Cheesecake Factory accepts reservations on a very limited basis, or not all.) But national restaurant brands don’t have the same issue as a small, independent business, so Over the Falls had to create its own system.

Pearce began to tinker with his operations, and in 2014 he implemented a new plan: Outside of one reservation per day at lunchtime for a group of 10 or more (made on a first-come, first-served basis) and a similar policy for one dinner reservation to be available between 5 and 6 p.m. only, Over the Falls operates solely on walk-in business. And it works. “We’ve doubled our business in the last year and a half, and once we identified and set the rules, we’ve had no issues,” Pearce says. “We went from three to five complaints a month to zero in the last year. Once it was an established process that we are a non-reservation based restaurant, we put it on our website—and Yelp and TripAdvisor posted it—and we’ve had no issues.” 

While doing away with the traditional reservation process has worked for Over the Falls, even Pearce acknowledges there is an issue here, one that different operators around the country are grappling with: The simple rules of hospitality and giving customers what they want practically mandate the opportunity to call ahead and save a table. But in the current climate, under the right circumstances, that just doesn’t make sense for the bottom line.

“It’s a weird stance. You can’t be arrogant about it because you want everybody’s business,” Pearce says. “How do you deal with this as an owner and not come across badly? I’d love to [say yes to everyone], but I can’t take a table of 20 at 7:30, in the thick of our business. If you’re busy, [declining reservations] is a good plan. You only want people lined up outside during peak hours if they’re ready to wait.”

The deeper issue may be determining when or if diners would rather show up with a sense of spontaneity and take their chances on waiting for a table instead of using the tried-and-true call-ahead method. In the last decade, super-hip, James Beard Award–winning restaurants like the Spotted Pig and Momofuku began to set the no-reservations trend, depending on highly social environments, increased bar sales, and the elimination of no-shows. But that’s New York City—and like The Cheesecake Factory comparison, it doesn’t really work out in small and mid-size markets around the country.

Jason Lapin is president and COO at the international restaurant and hotel consulting company Blau & Associates, which works with prominent full-service chains as well as independent fine-dining restaurants. He’s quick to point out that no matter your reservation policy, it’s all about how smoothly your staff is running the door, and he acknowledges most restaurants “put an enormous amount of responsibility on the person in control.” Moving away from reservations might alleviate some of that stress, but not all of it, and such a shift comes with its own set of new challenges. “I just went to Vancouver last week on business and the restaurant we really wanted to go to didn’t take reservations, so we just didn’t go,” Lapin says. “We were perfectly willing to eat late. I’d rather go with the guarantee of 9 o’clock than show up at 7:30 and stand there for an hour and a half.”

Without a solid block of reservations to depend on—even considering the no-show factor—the operator is truly beholden to who is and isn’t coming through that door. “If you do without, you cut out fees from OpenTable and the like, which is great as an operator,” Lapin says. “You definitely don’t have to worry about people showing up and having a table on time, so that’s a little easier. But if it gets super-hot, watch out. You have to make sure your service and staff and kitchen are capable of banging out an entire dining room worth of food, all at the same time. That’s not so common.”

Over the Falls

As Pearce has proved at Over the Falls, you have to commit to a no-reservations process or a specific policy and state it clearly. “Without having the rules, customers will try to manipulate the situation. It’s all about being consistent,” he says. Lapin agrees. “If I’m OK with the situation of no reservations and I come in and roll the dice, but then I see a reserved sign on a table or learn about some secret kind of method for getting a reservation, that to me is suicide,” he says.

Veteran chef Jason Neve was the Las Vegas–based culinary director of the Batali & Bastianich Hospitality Group when he talked with FSR for this story, but has since gone to Boston to serve as executive chef at Eataly. All the Las Vegas restaurants under his guidance accepted reservations, and as you would expect, restaurants lining the famed Vegas Strip tend to get plenty of walk-in traffic. “But with all the conventions and meetings in Las Vegas, people tend to not make reservations and expect that you’ll have space, or they’ll make two or three different reservations and see where they end up,” Neve says. “Depending on what’s going on, you always have to be ready to add up to 100 people on top of your books. It’s kind of crazy and hectic, but you can get used to it.”

Dealing with such unpredictable volume gave Neve and his team a unique outlook on reservation policies. There are always a lot of no-shows, but consistent traffic fills in the gaps. The high tourism traffic provides a cross-section study of how different people like to plan their restaurant visits—or not plan them at all.

 “It’s two-fold,” Chef Neve says. “With [the internet and smartphone apps] it’s so easy to make a reservation, you wonder why people don’t do it more, but it also makes people think that it’s so easy to make them and that’s why they don’t respect the system more. It’s important to get people to understand that the reservation not only helps the business be profitable, but it also sets up a great experience for the diner. If a guest has a reservation with us, we keep fairly good notes and watch out for repeats and locals and what [guest] preferences are. Making that reservation puts a guest in the forefront before he walks in the door and helps everything flow the way it should.”

Over the Falls

That sounds like a lot to give up by transitioning to a reservation-free policy. But back in North Carolina, Over the Falls would be giving up the most important thing—profit—if it allowed reservations to bog down its service on busy nights and weekends. Having a reservation for a larger group at 7 p.m. would mean Pearce’s staff could not seat anyone at that table from 5:30 to 7, and maybe from 7 to 9. “It’s all about each seat making money, and if you want to be in the business in the next 10 years you have to look at all of that,” Pearce says. “Our revenue is way better and our customer is happier waiting 20 to 30 minutes.”

Over the Falls has been able to turn tables more quickly without reservations and keep those wait times at a minimum. And now that its customer base has adjusted to the restaurant’s new normal, it’s rare for a larger group to show up at a busy time. Perhaps it’s due to its small-town setting, but the system has been effectively installed and accepted. “We’ve actually gained about 8 percent of business by not doing reservations—true bottom-line business—since the beginning of this year,” Pearce says, “really, just by having a hard stance on this policy.”

It seems illogical to think restaurant operators must now consider, just as they would whether or not to offer takeout, whether they should allow reservations. But the success of no-res restaurants—from those trendsetting spots in New York City to Over the Falls—could be emblematic of cultural shifts in dining. 

“If you take the population at large, you have adventurous people and people who are more regimented,” Lapin says. “A big section of the population is just not going to participate in that [gamble], rolling the dice when you might eat at 6 or at 8. But the younger crowd is more flexible and free-form. They don’t want to talk on the phone, they want to text or Tweet or email or work on some digital platform to make their decisions, and a reservation can be a piece of that or not.”

It’s easy to make generalizations and assume an older clientele wants to make reservations, while the millennial set would rather chill at the bar until their table is ready. But the new part of that equation is the technology, so operators must recognize that digital platforms speak to every generation.

No matter which system works best, the no-reservations trend is a somewhat unforeseen phenomenon. “I just can’t imagine telling people no,” Lapin says. “If a diner wants to come to your restaurant, the answer is sure. For you to say, ‘No, we don’t do that,’ almost sounds nonsensical. But I’m old-fashioned. ... And, it seems like if  [a customer] is telling you they want to guarantee coming to your business, then saying no seems like you’d rather take a chance they show up.”