Effect of restaurant reservation cancellations on restaurant bottom line

[y_p_w]

I see these days that a lot of reservation cancellations require a cancellation fee. Or possibly even the reservation requiring payment upfront for at least a nominal fee or perhaps a fixed price meal. Some people haven’t taken it well. However, I get that restaurants often staff and stock food in anticipation of reservations, so a large group cancelling can throw things well off. Like this example.

https://www.sfchronicle.com/opinion/soleilho/article/how-to-cancel-restaurant-reservation-19493500.php

It’s 9 p.m. on a weekend night at Dalida, a bustling eastern Mediterranean restaurant in San Francisco, and yet, while most of the diners are scraping their bowls to scavenge their last gooey spoonfuls of caramel rice pudding, the staff — line cooks, servers, and the rest — are still as tense as a coiled spring.​

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By 9:20 p.m. the restaurant is nearly empty, save for the staff.​

​

But the ovens stay hot.​

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Eventually, the owners, Laura and Sayat Ozyilmaz, throw in the towel and swallow the hard truth: The big group that reserved a 9 p.m. table isn’t going to show. Everyone they’ve scheduled to serve the table has been lingering for nothing. When the couple finally gets a hold of the no-show party, there’s no excuse. Just, “We forgot.”​

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On average, Sayat told me, the restaurant has 10 no-shows a night. “It hurts me every single time. Like how could you disrespect the 60 people working in this restaurant like this?”​

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“It’s demoralizing for everybody,” said Laura, including the cooks who are waiting around, the servers whose tips are being impacted and the hosts who have to bear the brunt of explaining to ornery customers why they can’t seat them at the clearly empty tables.​

 

[frankbee3]

If it is important enough to make a reservation, it is important enough to pay at least 50% up front. It is difficult for me to understand how self centered people can be.

 

[Jetronic]

I remember when a reservation was absolutely not necessary, and I only make reservations now if we plan something for more than 1 family.

 

[y_p_w]

I remember when a reservation was absolutely not necessary, and I only make reservations now if we plan something for more than 1 family.

Depends on the restaurant. Certainly for popular restaurants, reservations can help with determining how much food to purchase as well as how many employees to schedule. Running that kind of operation is not cheap and they often run on very tight margins.

The thing I can't get is that when some make reservations where it's clear there's an upfront charge or a cancellation fee, the anger and name-calling that can happen when the restaurant won't waive the penalty. I get why they do that, since restaurants that are booked well in advance may not get too many short-notice reservation requests or walk-ins. The article/opinion piece I linked noted that some of these restaurants are destination restaurants in low-traffic areas, so getting walk-ins generally doesn't happen.

 

[wings&wheels]

You are tying up an asset, a 'tool' and while your (the no show) revenue doesn't come in, the expenses to operate that 'tool' that was unutilized being held for you, are still accrued.

 

[atikovi]

Only a few top end restaurants really need to take reservations. The others are just full of themselves thinking they are so popular that they require reservations. Actually, it should be first come, first served and eliminate reservations all together unless you're booking a whole dining room.

 

[JohnnyG]

I see an income opportunity here!
Let's just sell reservations online!

 

[y_p_w]

You are tying up an asset, a 'tool' and while your (the no show) revenue doesn't come in, the expenses to operate that 'tool' that was unutilized being held for you, are still accrued.

I’ve felt bad sometimes when cancelling a hotel reservation or skipping out on a car reservation. However, those are trpypically overbooked to allow for cancellations. I haven’t heard of restaurants being overbooked, although they might deal with customers staying longer than a restaurant allows for a party.

I do remember being at a restaurant trying to walk-in, while my wife was pointing to empty tables only to be told they were being held for reservations. Of course it wouldn’t have helped the restaurant if those customers didn’t show.

 

[SC Maintenance]

Original article is behind a paywall, so not really sure everything it says.

Works both ways of course. When I have a large group I am not going to a restaurant without a reservation. If they don't take reservations, and many do not, then they miss out on the groups.

If they want to charge a reservation fee its up to the owner, and up to the customer if they want to pay it.

Not sure why there really should be any debate on this?

 

[64bawagon]

Its cultural. I heard it reported recently that campgrounds experience around a 40% cancellation rate. I believe we will see more of it since "ghosting" is such a big thing now.

 

[SubieRubyRoo]

I see these days that a lot of reservation cancellations require a cancellation fee. Or possibly even the reservation requiring payment upfront for at least a nominal fee or perhaps a fixed price meal. Some people haven’t taken it well. However, I get that restaurants often staff and stock food in anticipation of reservations, so a large group cancelling can throw things well off. Like this example.

https://www.sfchronicle.com/opinion/soleilho/article/how-to-cancel-restaurant-reservation-19493500.php

It’s 9 p.m. on a weekend night at Dalida, a bustling eastern Mediterranean restaurant in San Francisco, and yet, while most of the diners are scraping their bowls to scavenge their last gooey spoonfuls of caramel rice pudding, the staff — line cooks, servers, and the rest — are still as tense as a coiled spring.​

​

By 9:20 p.m. the restaurant is nearly empty, save for the staff.​

​

But the ovens stay hot.​

​

Eventually, the owners, Laura and Sayat Ozyilmaz, throw in the towel and swallow the hard truth: The big group that reserved a 9 p.m. table isn’t going to show. Everyone they’ve scheduled to serve the table has been lingering for nothing. When the couple finally gets a hold of the no-show party, there’s no excuse. Just, “We forgot.”​

​

On average, Sayat told me, the restaurant has 10 no-shows a night. “It hurts me every single time. Like how could you disrespect the 60 people working in this restaurant like this?”​

​

“It’s demoralizing for everybody,” said Laura, including the cooks who are waiting around, the servers whose tips are being impacted and the hosts who have to bear the brunt of explaining to ornery customers why they can’t seat them at the clearly empty tables.​

I made a personal decision years ago based on treatment I received at places that required reservations that if they required reservations, they weren’t going to get my business.

I can get treated badly for free with no reservation hassle anywhere; on the flipside, I can also appropriately tip excessively wherever I receive service that exceeds what I’m used to anywhere I eat. They’re free to their business decision, and so am I. Both parties get exactly what they hoped for. Ain’t capitalism grand?

 

[CarLuver]

when you have skin in the game you are more likely to show up. for a large party , i would most certainly ask for a deposit. most restaurants that i have been to , if you make a free reservation, there is a 15 min grace period or your table will be given to someone else. i have read a few times where people would on a holiday time make a reservation at 3 places at 3 different times. the day of they would pick the one that suited their schedule.

 

[Jimmy_Russells]

Golf courses have the same problem with people booking and not showing up, or booking for four and only two/three showing, etc. I don’t understand how people can do that stuff without feeling like a jerk.

If someone wants to reserve a table they should charge $50 for the reservation (maybe $200 for big groups) and refund it off the final bill. If someone doesn’t agree to do that you probably don’t want them making a reservation in the first place.

 

[y_p_w]

Original article is behind a paywall, so not really sure everything it says.

Works both ways of course. When I have a large group I am not going to a restaurant without a reservation. If they don't take reservations, and many do not, then they miss out on the groups.

If they want to charge a reservation fee its up to the owner, and up to the customer if they want to pay it.

Not sure why there really should be any debate on this?

There's a way around the paywall, but I'll leave it at that. I'll just say it works for any Hearst publication with a paywall.

The opinion piece actually relayed that some customers went so far as death threats for not dropping the cancellation fee, or being referred to in rather unflattering terms. Here's a quote:

Kim Alter, owner of Nightbird in Hayes Valley, has received death threats from customers who were asked to pay a $195-per-person fee, the price of dinner, for dropping reservations less than 48 hours before their appointed time. She’s been called a “----” over this.​

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“The level of hatred that comes from people’s mouths is shocking,” Alter said.​

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And the hostility has only heightened since the pandemic. Yes, the fee seems high, but the policy is clearly stated online. Staff call and email patrons at least three times leading up to the end of the cancellation window. There’s not much more they can do to make this work.​

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Once a customer called Nightbird to cancel three hours before a reservation. When informed about the fee, the customer hung up. Ten minutes later, the customer’s partner called and told a different staff member the first person had died.​

 

[SC Maintenance]

There's a way around the paywall, but I'll leave it at that. I'll just say it works for any Hearst publication with a paywall.

The opinion piece actually relayed that some customers went so far as death threats for not dropping the cancellation fee, or being referred to in rather unflattering terms. Here's a quote:

Kim Alter, owner of Nightbird in Hayes Valley, has received death threats from customers who were asked to pay a $195-per-person fee, the price of dinner, for dropping reservations less than 48 hours before their appointed time. She’s been called a “----” over this.​

​

“The level of hatred that comes from people’s mouths is shocking,” Alter said.​

​

And the hostility has only heightened since the pandemic. Yes, the fee seems high, but the policy is clearly stated online. Staff call and email patrons at least three times leading up to the end of the cancellation window. There’s not much more they can do to make this work.​

​

Once a customer called Nightbird to cancel three hours before a reservation. When informed about the fee, the customer hung up. Ten minutes later, the customer’s partner called and told a different staff member the first person had died.​

Thanks for posting. I do know of the work around but forget at times.

$195 per person for dinner or reservation in advance does seem a bit much. If they don't show you made more than if they did likely. As for the "death threats" part, I am guessing that is hyperbole. Someone likely was told $195 for reservations and gave an expletive in return.

Anyway if they can swing it, good for them. If you don't want to pay it, don't. If its a good restaurant they likely have people waiting to fill those tables for the no shows. I can see scheduling a big group on a slow night so you bring in extra staff, which would be a huge problem with a cancel.

 

[y_p_w]

Its cultural. I heard it reported recently that campgrounds experience around a 40% cancellation rate. I believe we will see more of it since "ghosting" is such a big thing now.

I haven't made a camping reservation in maybe a decade, but that was for an extremely high demand place (Yosemite). I called in to the campground office that I wasn't going to be able to make my first night (out of four nights) where I didn't want to be declared a no-show and forfeit my entire reservation. I left a message with the campground office and an explanation that I was going to be a day late. I then got a call back (my phone number was on file) from the campground office asking if I would release my first night and come in the next day after checkout time, where I'd get a one night refund and they would make that one night available for a last minute camper. I was OK with it and said so. But before we left, I had the bright idea to check the status of my modified reservation on recreation.gov (and print it out) and found that my reservation had been modified where I still had my first two nights, but no longer had my final two nights. I called into the campground office again, talked to a real person, and was told the only way to sort it out would be at the Yosemite Valley campground office.

I got there maybe 15 minutes before closing time, and I explained my predicament. I think one of the park rangers there talked to me earlier that day. He said someone really messed up trying to make my first night available and cancelled the wrong nights. And my remaining reservation wasn't cancelled immediately, although it could have been. I think they might typically wait until the next morning to declare no-shows since some campers show up late. He looked up what they had and there was another campsite available for our exact three nights. We could pay for that and he would refund the my previous campground reservation without a cancellation fee. But they had to coordinate on two computers to do it. He said as soon as the campsite days were released, they were immediately available to anyone who might be perusing recreation.gov or even calling in to their reservation phone number. So their process is to have one ranger release it and the other immediately try to grab the reservation dates before anyone figures it's available. But they also had a walk-up waiting list and try to accomodate those people. However, I was the highest priority since someone there screwed up my reservation.

The cancellation process for Yosemite (and most federal campgrounds) has been abused by illegal resellers who primarily used bots to snag the reservations as soon as they became available. Yosemite is probably the hardest campground reservation to get for all large federal recreation areas. Scalpers would try to resell on eBay and Craigslist, at least until eBay banned the listings (violates the terms of the reservation to resell). The recreation.gov transfer fee was $10. But for Yosemite camping they later made them nontransferrable. So then the scalpers figured they could cancel (I think for a $10 cancellation fee) and immediately rebook since the "inventory" immediately became available on recreation.gov. Then they countered that where the "inventory" had to be manually released by a real person reviewing the inventory so that scalpers couldn't immediately rebook upon cancellation. That's the process I was dealing with trying to clear up my issue with the campground reservation. I think someone had cancelled, and for the most part they try to make those available for people showing up in person. However, there is no issue with campsites going unused. At least in Yosemite there's always a waiting list of people who will take whatever campsites are available.

 

[y_p_w]

Thanks for posting. I do know of the work around but forget at times.

$195 per person for dinner or reservation in advance does seem a bit much. If they don't show you made more than if they did likely. As for the "death threats" part, I am guessing that is hyperbole. Someone likely was told $195 for reservations and gave an expletive in return.

Anyway if they can swing it, good for them. If you don't want to pay it, don't. If its a good restaurant they likely have people waiting to fill those tables for the no shows. I can see scheduling a big group on a slow night so you bring in extra staff, which would be a huge problem with a cancel.

Apparently Nightbird is one of those uber expensive places for people who either really rich or looking to splurge.

Sustainability, Technique and Local Flavor: Nightbird San Francisco

Here's the scoop on Chef Kim Alter's San Francisco-based restaurant, Nightbird.

www.forbes.com

As far as reservations go, I would think that these places getting fully booked a week or more in advance might be able to get the occasional short-notice reservation requests or walk-up requests, but possibly not. I guess it's one of those deals where few people will try, thinking that it's pointless.

I looked it up, and there are reservations for two available for tonight on OpenTable. But I didn't reserve and just wanted to see their terms. They're absolutely upfront about the no-show/cancellation fee.

Reservations | Nightbird Restaurant

Nightbird, an elegant, hot spot, offering a tasting menu restaurant in Hayes Valley district of San Francisco.

www.nightbirdrestaurant.com

What to know before you go​

Important dining information​

We have a 15 minute grace period. Please call us if you are running later than 15 minutes after your reservation time.​

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We may contact you about this reservation, so please ensure your email and phone number are up to date.​

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Your table will be reserved for 2 hours for parties of up to 2; 2 hours 30 minutes for parties of up to 6; and 3 hours for parties of 7+.​

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CREDIT CARD REQUIRED​

This restaurant requires a credit card to secure this reservation. All credit card information will be processed securely. No-shows or cancellations less than 2 days in advance will be subject to a charge of $195 per person.​

 

[SC Maintenance]

Camping reservations at popular South Carolina parks on the beach sell out a year before. If you cancel with less than a few days - I forget exactly - you forfeit whatever you paid for your total stay. Its stupid IMHO because I have been in an otherwise full campground that was supposedly sold out but there were several unused sites which could have been given out to others if wanted. If the original booker got something back, they may have called.

It also irks me that I pay the same rate as out of state campers, given everyone in the state pays the taxes that maintain the parks, or at least part of the maintenance. I know as a whole its not self funding.

 

[Rmay635703]

Only a few top end restaurants really need to take reservations. The others are just full of themselves thinking they are so popular that they require reservations. Actually, it should be first come, first served and eliminate reservations all together unless you're booking a whole dining room.

I have reservations but I will eat there anyway.

I never reserve and wouldn’t eat at a place that requires it.

Just means a wait to get a spot at the few that do and oddly gotten in the reservation places every time with no reservation.

Camping reservations at popular South Carolina parks on the beach sell out a year before. If you cancel with less than a few days - I forget exactly - you forfeit whatever you paid for your total stay. Its stupid IMHO because I have been in an otherwise full campground that was supposedly sold out but there were several unused sites which could have been given out to others if wanted. If the original booker got something back, they may have called.

It also irks me that I pay the same rate as out of state campers, given everyone in the state pays the taxes that maintain the parks, or at least part of the maintenance. I know as a whole its not self funding.

My other home is basically the UP, but I’ve always had to pay 2-3x more for out of state “stuff” even millions of years ago hunting/fishing costs were pretty terrible despite my having relatives there.

Michigan sucks pretty bad because you can’t get senior discounts either, and being who I am I don’t do what all the locals do which is just go in without a sticker. Considering how remote some of the stuff is I might get away with it once or twice.

In the other hand Access to Wisconsin parks is very reasonable for an annual with a senior discount

 

[y_p_w]

I believe what many restaurants hate is that they spend money and provide staffing commensurate with the number of reservations made. Many might even have set menus where they prepare everything in advance and can't sell what they're prepared the next day. I've seen articles on how restaurants do food prep (which gets refrigerated) for hours in anticipation of what will be ordered, but these high end restaurants often have items that won't be suitable for customers the next day.

The example of a large group making a reservation for the latest time slot and not showing when there were no other customers present seems really egregious.