Insureon Blog

No-Reservation Restaurant Trend: Worth the Risk for Your Business?

15. May 2013 17:07

If you haven’t been dining at the hottest big-city restaurants in recent months, you may not have noticed that more and more top-tier dining establishments are adopting no-reservations policies. But increasingly, uber-chic restaurants (including those that serve standing-room-only crowds) are eliminating traditional reservations systems in favor of first-come-first-served seating.

The result? At some of the nation’s hippest spots, lines start forming in the late afternoon for coveted dining room seats.

At other hot eateries, restaurant owners allow reservations only at set times of the month or require diners to claim their place weeks in advance. In short, the act of eating out at some restaurants has come to mean a lot more than having a meal with friends.

The Risky Side of Reservations

So why the break from tradition? The answer varies depending on the establishment. Some restaurants want to promote a sense of equality and community: anybody who happens to be in the neighborhood when they get hungry can, in theory, eat at the restaurant.

Other eateries have found that reservations can be a cash drain, negatively impacting the bottom line. Restaurants that allow reservations only for large parties, for example, report that some guests reserve a place but end up bringing fewer than the required minimum people to dinner, which costs the restaurant owners revenue they could have brought in by maximizing seating arrangements.

The Risk of No Reservations

Of course, if you refuse to take reservations and yours isn’t the swankiest spot in town, you risk alienating diners who appreciate the guarantee of having a predetermined seating time. 

And owners of cafés, bakeries, and coffee shops face a whole different conundrum when it comes to reserving space: while reservations aren’t the norm for informal dining spots, more than one coffee shop owner has bemoaned the patron who purchases a single coffee and camps out for hours at a valuable table.

But the alternative – establishing a minimum order for tables, say – doesn’t appeal to many shop owners or diners. 

Which Works Better: Reservations or None?

As a restaurant owner or diner, where do you fall on the reservations question? Let us know whether or not you accept reservations (or prefer eateries that take them) and why!

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Restaurants | Risk Management

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