We’ve all been there, made a reservation and decided at the last minute not to go. But what’s often overlooked is that these no-show instances end up costing restaurants quite a bit of money.
OpenTable shared an example of this, with a 5% decrease in profits for an establishment in one night if just six people don’t show up to their reservation at a 40-seat restaurant.
Beyond a loss of income, staffing and ingredient stock also have to be taken into consideration. However, with an unpredictable number of no-shows every day, it’s nearly impossible to properly prep a restaurant.
According to further data from OpenTable, 28% of Americans flake on their reservations. And even though restaurants expect 10-20% of reservations not to show, it doesn’t prevent the potential profit loss. Bots are also a concern for restaurants, evading no-show fees.
Therefore, NYC restaurants like Cathedrale, Crown Shy, Dagon and Au Cheval have begun implementing a reservation fee as a safeguard, reports Eater.
A reservation fee or deposit isn’t just extra money out of your pocket, but either subtracted from your bill or refunded upon showing up. So though a reservation fee might be a turn off when your choosing where to dine, establishments are only trying to protect themselves. Reservation fees “[give] restaurants the confidence to plan more effectively,” explained Open Table. This solution for restaurants also combats chargebacks when people dispute no-show fees.
Primarily, reservation fees will become more likely for large parties, private dining areas and special occasions. This can benefit diners as restaurants will be more inclined to accept those kinds of reservations, shares OpenTable.