A rising number of diners cancelling last minute, or just not turning up, over the last year has led to almost a fifth (18 per cent) of restaurant, pub and bar owners to consider closing for good according to new research from Barclaycard Payments, a leading UK payments provider. The issue adds pressure to an industry already facing challenges from inflation, high energy prices and recruiting staff¹.
Last minute cancellations and no-shows are one of the biggest issues the restaurant industry is facing right now according to almost a quarter (23 per cent) of restaurant owners, as nearly four in 10 (37 per cent) UK adults who dine out regularly reveal they cancel on the day of the booking, typically providing less than six hours’ notice.
Costing up cancellations
Three in 10 restaurant owners are understandably worried about no-shows negatively impacting profits this summer – typically a busy time for eating out – as only 16 per cent say they can recover loss of earnings through cancellation fees. It comes as those who have experienced no-shows and last-minute cancellations estimate they lose an average of £89 for each diner that doesn’t turn up.
With the majority (60 per cent) of diners cancelling their reservation with 24 hours’ notice or less, and no-shows proving the most common form of cancelling (19 per cent), this is naturally having major repercussions for restauranteurs. The hospitality industry cites the impact of this growing trend as including food waste (56 per cent), staffing challenges (34 per cent), low team morale (24 per cent) and being forced to close early (23 per cent).
Food for thought
An average four in 10 restaurant owners and managers have seen a rise in no-shows and short notice cancellations over the last year, stating they’d seen increases of 40 and 35 per cent respectively.
Only 34 per cent of restaurateurs currently take card details when booking and charge a cancellation fee if a customer does not turn up. Although, in a bid to reduce the impact on their business, a further 37 per cent plan to introduce this measure.
Other deterrents employed by the hospitality industry include requiring card details when booking but not actually charging a fee (43 per cent) and taking an upfront deposit to put diners off not attending (35 per cent). The news comes as 14 per cent of millennial diners admit to making ‘bulk bookings’ so they have a choice of where to dine, and then forgetting to cancel; 12 per cent of 18–26 year olds admit to doing the same.
The plate escape
Friends and family members bailing on plans is the top reason diners have dipped out on a restaurant reservation without cancelling, according to one in 10 (11 per cent). Other reasons include deciding to stay in instead (9 per cent), forgetting about the booking (8 per cent), rain (7 per cent), and not having a baby or dogsitter (5 and 6 per cent). When it comes to how they cancel, over a fifth (21 per cent) admit they feel less bad about cancelling if they’ve booked online or via social media as there is no personal interaction. One in five (19 per cent) feel too awkward to speak to someone on the phone to alert the venue to their change in plans
Regardless of the rise in cancellations and no-shows, 39 per cent of diners feel guilty about not turning up and letting restaurants down. Yet despite the guilt, over one in 10 (11 per cent) would still rather fork out a cancellation fee than phone a restaurant to cancel, and in doing so would accept losing an average of £29.
Healthy appetite for eating out
While this ongoing challenge continues to affect the restaurant trade there is still a strong desire to eat out. And with a third (33 per cent) of diners admitting they would be less likely to cancel a restaurant booking if they had been asked to pay a deposit, the research shows there are clear methods that can deter the rising cancellations.
British summertime, with its warmer weather and longer days, increases adults’ likelihood to eat out more according to 51 per cent of those polled. As the summer holidays approach nearly a fifth (17 per cent) of millennials are planning to dine out more than they have done over the last six months, rising to over a quarter (26 per cent) for the younger audience (those aged 18 to 26).
Sympathetic to the challenges restaurant owners face, half (50 per cent) of consumers polled understand that restaurant owners are struggling financially in the current economic climate. Over a quarter (27 per cent) admit they would cancel a restaurant booking earlier if they knew it directly impacted the restaurant and staff.
Tom Aikens, Michelin Starred restaurant owner commented:
“It’s brilliant to see so many people looking forward to meals out over the coming months. Yet cancellations are a growing issue plaguing the restaurant industry. At my restaurant Muse, we do everything we can to minimise the impact of cancellations by communicating with the guest through detailed booking confirmations, requesting guests confirm their reservations six days prior and having a strict five-day cancellation policy. This seems to work well for us and leads to less cancellations on the day, but unfortunately there are still some unavoidable circumstances where this is the case, which leads to challenges such as food wastage, staffing levels and fundamentally loss of sales.”
“Depending on the type and location of a restaurant, each business can be graced with busy periods throughout the year, so we want to help customers understand the impact late cancellations can have and encourage them to do so earlier so that tables can be re-assigned.”
Kirsty Morris, MD at Barclaycard Payments said:
“The hospitality industry has faced many challenges in recent years and is continuing to feel the strain against the backdrop of the cost-of-living. While diners are becoming increasingly picky about the venues they choose to spend their hard-earned cash at, it’s really important this doesn’t translate to indecisiveness and negatively impact restaurants through cancellations.
“With more venues considering charging cancellation fees to deter no-shows, we want to help diners understand the impact on businesses of cancelling at the last-minute so they can think ahead and give advance warning – and not get stung with a cancellation charge.”