No-shows are an unfortunate—and sometimes a too-often—occurrence that can have a negative impact on your tour or activity business, especially if you’re counting on a certain number of attendees in order to properly coordinate an experience. And while no-shows are unavoidable to a degree, you can (and should) take precautionary measures to help prevent last-minute cancellations and no-shows to help mitigate their negative impacts.
Whether you lead brewery tours or zip-line adventures, our complete guide to reducing no-show rates for your tour and activity business can help increase revenue, maintain good customer relations and boost employee morale.
How No-Shows Affect Company Operations
First, it’s important to look at the negative effects no-shows can have on your business. Sure, as part of the booking agreement you may end up collecting a customer’s deposit—or even their complete payment—when they fail to make their scheduled visit. But while you may have “earned” this revenue, consider this: No-shows also serve as an inconvenience to other guests if the entire trip has to be cancelled due to lac of enough participants. You might also lose revenue because other customers were previously turned away, or wait-listed because of no availability.
Here are some of the most significant ways no-shows affect company operations:
- Changes in employee schedules: If you’re in the business of booking one-on-one tours or smaller group tours with a certain tour guide or expert, having to cancel the trip means the employee or contractor has to change their schedule to accommodate the next set of guests. This can be a significant disruption in the employee’s schedule, and also creates more administrative work for your company when scheduling an employee’s hours.
- Lost income for employees: If employees conducting a tour or activity earn a commission for each tour (along with a portion of any purchases the guests makes after their visit), they miss out on income opportunities when the guest doesn’t show up.
- Lost employees or low morale: If no-shows start becoming a trend and occur frequently throughout the season, employees contracted to earn a commission or earn a base rate for each tour booked may become disgruntled and look for opportunities elsewhere.
- Lost revenue for your business: When you’re counting on filling a certain number of slots in the calendar week after week to meet your revenue goals, you’ll fall short at the end of the quarter when you run into no-shows. Even if the customer agrees to forfeit a deposit or pay a no-show fee, you’ll still need to take care of other costs associated with the cancellation, such as paying for supplies or fees for tour guides. If you rent any type of equipment, such as kayaks, boats, bikes, or sailing gear, and have a limited number of units available, you may lose revenue when you turn away guests because all units are reserved, but the original guests fails to show up.
“Karen McLaughlin, owner of Karen’s Kayaks, says it costs her company $1,000 in revenue, on average, when someone cancels her trip. She reports a no-show rate of 15 to 20 per year, which equates to a significant loss in revenue without a firm cancellation policy.”
- Increased administrative expenses: When a customer cancels a reservation at the last minute or fails to show up, one of your staff members has to take care of administrative duties related to following up with the customer, re-booking the tour, and other tasks. This can increase administrative time and expenses that may or may not be covered by the deposit the customer has already paid.
- Disgruntled customers: If you’re hosting a smaller group outing, such as a winery or food tour, for which you need a minimum number of guests to coordinate the tour, you may have to cancel and re-book the entire experience when a guest fails to show. Customers who were prepared to show up may be turned off by this and be less inclined to book again—even if they’re granted a refund.
Reduce no-show rates, increase revenue, maintain good customer relations and boost employee morale with our world-class online booking software:
Confirming appointments and setting up a system of reservation reminders is one way to keep guests on track for their visit and, in some cases, reduce the risk of last-minute cancellations.
Here are some of the most effective ways to reduce no-shows:
- Charge a no-show fee or require a deposit. This may be just the incentive for guests to follow through on their booking. For example, Southwest Airlines has a straightforward no-show policy: customers who do not cancel or change their reservation within 10 minutes of departure forfeit their entire reservation. As a tour and activity operator, your time frame may be much longer. You could implement a policy where guests who fail to make changes to their reservation within 48 to 72 hours may be subject to your on show policy. Some companies also tack on a handling fee to all penalties, which helps deter no-shows and also takes care of extra expenses incurred as a result of the cancellation.
- Be clear in your terms and conditions. Make sure any fees or charges you impose for last-minute cancellations and no-shows are clearly listed on your Terms and Conditions page, and guests agree to comply with your guidelines when they check out to complete the reservation.
- Phone reminders: If you have an administrative or sales team available to handle phone call reminders, consider setting up a system where every booked guest receives a friendly phone call one or two days before their visit to confirm their appointment. Medical practices do this consistently to reduce no-show rates. Statistics from Televox show that approximately 47 percent of practices who do not send appointment reminders had an average no-show rate of 10 percent, while just under 28 percent of practices who deliver appointment reminders to patients had no-show rates of over 10 percent. Interestingly, more than one-third of practices surveyed received actual complaints from patients who were not reminded of an upcoming appointment.
- Text reminders: This is another option, especially if you don’t have a large administrative team that can call each guest with a phone call leading up to their visit. Craft a simple but impactful text message that communicates your excitement to see the guest soon, and provides details about their reservation. If you use text messages, you must state in your Terms and Conditions policy that guests can expect to receive text alerts, unless they notify you otherwise.
Keeping guests engaged up until their visit is a simple and effective way to encourage them to follow through
- Email reminders: Email reminders can be expected when a guest books online. Continue communicating with the guest in this way up until their visit, and also to follow up with them shortly after their experience. You can use an online booking software program to ensure every guest receives a detailed reservation confirmation immediately after booking, plus a series of automated emails leading up to the event. Provide details such as where to park, tips for dressing for the weather or trip, and any other relevant details to ensure guests are fully prepared for their visit—these messages also show you care that they make the most of their experience.
- Use an online booking system: Whether you want to send out automated email reminders, or ensure a streamlined checkout process that clearly outlines your cancellation and no-show policies, using a robust online booking software program like Peek Pro makes all these administrative tasks that much easier. Automating almost all of your customer contact tasks can eliminate administrative time and expenses related to following up with each guest that registers on the site or completes a reservation. Peek Pro even lets you completely personalize and customize automated emails with your logo, and include links to your social media pages if guests wish to stay in touch.
“Automating almost all of your customer contact tasks can eliminate administrative time and expenses related to following up with each guest that registers on the site or completes a reservation.”
High no-show rates can negatively impact business operations and also affect your employees. If you want to continue meeting your revenue goals and maintain a loyal following of happy customers, make sure you are taking steps to implement a no-show policy and staying in touch with guests in a timely manner leading up to their visit. Reducing no-show rates will not only increase revenue but will also help you maintain good customer relations and boost employee morale—two areas of business operations that are essential for keeping you in business season after season.