BigHospitality's 2012 look-back: Restaurant no-shows and MWB Group Holdings administration

BigHospitality hit a raw nerve when we reported on the problem of no-shows in restaurants earlier this year

In the second instalment of our look-back at the top stories of 2012, we digest two more of the hottest topics featured on the website this year - the rise of the dreaded restaurant no-shows and MWB Group Holdings' appointment of administrators. 

8: An end to restaurant no-shows? New marketing platform reveals potential solution

For restaurateurs, the problem of diners booking tables then failing to show with no warning, is not a new one, but this year it seemed to reach a crescendo, particularly when Rene Redzepi of the World's Best Restaurant Noma revealed that his business had also been a victim of a 'no-show'. Our trail of stories on the subject provoked a flurry of responses from members of the industry who sympathised with those who'd spoken out and suggested solutions such as taking deposits for bookings. Despite the problem remaining, so far no industry-wide solution has been suggested, which may be why this story, which offered a potential solution, was our most-read on the subject and why it has made our list of the overall most-read stories this year. 

Comment from Petra Clayton, Custard Communications

Anything relating to getting bums on seats in restaurants is bound to be a hot topic. From discounting and incentives to building brands, restaurants are struggling to recover from the ‘voucher vampire’ trend that has infiltrated the industry over the last three years. 

No shows are probably the most frustrating behavioural change in diners. They hide behind online bookings leaving restaurant inventory challenged on a daily basis. Nothing can be more frustrating than thinking your restaurant has bookings, only for plans to change at the last minute. 

Restaurant marketing, as well as many other customer-facing sectors like retail, is having to adapt to respond to this or risk losing potential customers. Internet-based reservation platform Livebookings spoke out earlier this year on the surge in customers now choosing to book restaurants online and via mobile phones. According to their report, online bookings have doubled year on year, so this is certainly a behavioural trend that is here to stay.  

Therefore, while the customer is driving the industry marketing steer, the restaurant is revolting in other ways, with each method – denying bookings altogether or threatening to charge for no-shows on confirmed bookings – both winning friends and alienating people. The fact is that the surge in the number of restaurants not taking bookings is, like it or not, driving demand – much to the annoyance of The Guardian columnist Ariel Leve, who questions why paying customers should be made to play the queuing game at restaurants where tables are allocated strictly on a walk-in basis only. What about what the customer wants, she asks. 

Adopting no reservations policies is a commercial decision and many are doing this successfully, but namely restaurants in high footfall areas and with certain types of cuisine. The hype and anticipation created by the sight of customers spilling out onto the streets seems to fuel this. There are even guides on London’s best no-booking restaurants now, showing that for the customer, it is never too late in the day to secure a table at a restaurant in London. 

The increase in no-shows still needs to be addressed however. The launch earlier this year of the airline-style variable pricing model of new restaurant booking service Bookingrid prompted negative reactions by Evening Standard readers, most likely because in times of economic crisis, it is critical to be transparent. 

In my view, there are still some fundamental issues that trigger no-shows and need to be addressed: the abundance of marketing direct to potential diners through third party marketing sites, and chains. Where someone may have been happy with their choice of restaurant, they are now being swayed to book another restaurant in favour of a better deal. Is the fickle customer here to stay? Probably. What the industry needs to do now is work hard to educate the customer about loyalty and to put processes in place to negate the chance of as many no-shows. But these will never be eradicated and the customer will not tolerate charges prior to dining. The wider issue is how the customer is changing the landscape of our restaurant marketing and operations. Do we follow or do we rebel?

7: Malmaison and Hotel du Vin parent company announces intention to appoint administrators

When MWB Group Holdings, the parent company of the boutique hotel groups Malmaison and Hotel du Vin, announced it was suspending its shares because it hadn't reached an agreement on how to repay debts owed to its subsidiary company MWB Business Exchange, there was speculation over the future of the company and some predicted it wouldn't be long before administrators were called in. They weren't wrong. However, Gary Davis, appointed chief executive of Malmaison and Hotel du Vin only at the beginning of the year, was quick to quash rumours that the hotel side of the business would need to be sold by administrators and used the opportunity to not only confirm it was 'business as usual' but also to talk about how it planned to grow. 

Comment from Emma Eversham, editor, BigHospitality

This year the number of hospitality businesses going into administration, thankfully, dropped on the previous year, which may be one of the reasons why there was so much interest in the news that the owner of two of the best known boutique hotel groups had gone into administration. If these two industry leaders couldn't survive, then what hope would there be for the rest? 

However, as Malmaison and Hotel du Vin chief executive Gary Davis confirmed in a follow-up article on the subject, the administration of MWB Group Holdings would have 'no impact' on the two hotel companies because the company was not the main shareholder of Malmaison Holdings which owns the two brands. Davis emphasised it was 'business as usual' and went on to say the company was actually planning to expand by opening another 12 hotels over the next three years. 

Indeed, work has already started on a 91-bedroom Malmaison in Dundee that will open next summer, taking the Malmaison estate to 13 and Hotel du Vin will also add another hotel to its 14-strong estate next year after signing a deal to re-brand the St Andrews Golf Hotel in Scotland. 

In terms of operations, neither hotel group has let surrounding financial issues get in the way. In May, Davis launched a new menu at Hotel du Vin which returned 'to the spirit of Hotel du Vin' - a place where quality wine and food are as important as the Egyptian linen and Monsoon shower in its rooms - by highlighting French bistro classics and Malmaison continues to position itself as the 'daringly different boutique hotel'. 

While the Hotel du Vin and Malmaison names were dragged through the media in November, the hotels themselves do not seem to have suffered so far from negative publicity. The credit must go to Davis, who took charge and spoke to many publications following the news of MWB Group Holdings' administration in order to distance the hotels from the situation and to the companies' amenable PR agencies, who were quick to react to what must have seemed like an endless line of media enquiries. 

Read the rest of our countdown so far here

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