Hotel restaurants most likely should demand deposits
Hotel restaurants most likely should demand deposits
27 JULY 2020 7:28 AM

Hotel restaurants are back open in the United Kingdom, but the dreaded no-show also has returned. Is it time for hoteliers to be tougher in the push to save businesses and generate cash flow?

It has long been said that the hotel industry is loath to ask for up-front deposits and guarantees because it is, well, the hospitality business.

The initiative that booked guests will lose the cost of the first night’s accommodation if they do not cancel within 24 or even 48 hours is a relatively new concept, and hoteliers balked at this idea initially. They did so at least until enough of their peers decided to adopt the practice, and then it was a case of if you cannot beat them, join them.

The same likely is now to hold true in the restaurant business, including those at hotels, which might be managed by the hotel itself or via a third-party paying fee.

The COVID-19 crisis has just now seen restaurants reopen in the United Kingdom, and they are being reopened with far fewer tables and seats, which lead to fewer covers across an evening in a profession that always has seen thin margins across its total range.

In the three weeks and two days since hotels and their restaurants have been allowed to reopen, there already has been numerous cases where tables have been booked but the bookers have not shown up.

If a restaurant had 50 seats and now has 20, and two people do not show up, that is 10% of that night’s revenue gone, or maybe 5% if there is time to have a second cover.

With there being no revenue at all for three or four months, that is a hard pill to swallow, especially when restauranteurs and hoteliers are doing what is best and right for their staff and businesses.

Some fees to hotels could be fixed, too, so no-shows will hurt there.

Time for hoteliers to state that if you want a table, then a 50% deposit must be made, perhaps based on the average cost of a starter, main course, dessert and bottle of wine.

With the 50%-off offer announced by the U.K. government for those eating out in August, then perhaps all will be paid upfront, and diners can sort of have a “free” night out.

Cash flow is the name of the game through the rest of this year, if not beyond, and it might be time for hoteliers to be, temporarily if not for longer, a little sterner.

Exceptions and refunds can be made at the hotelier’s discretion, and I think most diners would in the circumstances understand the need to put such guarantees in place.

Maybe hoteliers would consider that such a scheme would alienate diners, thus losing them in better times?

Is it a big risk to appear brusque in the face of what is after all rudeness?

Irish kindness
The news in Ireland is abuzz with the rumor that the Irish government soon also is to unveil some carrots to get Irish diners and guests back into restaurants and hotels.

Supposedly, for a six-month period between October and April, those taking up the staycation offer can claim on their taxes as much as €125 ($145.40) if spending €600 ($697.93), with the maximum allowed being €250 ($290.80) for a couple. The deal will be, it is thought, for stays and meals, which would include the costs of hotel offerings such as spa or greens fees, as two examples.

Help is definitely needed.

COVID-19 is a very, very costly exercise, but of course doing nothing would be more so.

Email Terence Baker or find him on Twitter.

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