Restaurant reservations: it can cost you to cancel
Diners who are no-shows, overbook or reserve multiple tables be warned — restaurateurs have you in their sights.
Peter and Jane are going out for dinner on Friday; as usual, they have booked for four. Peter and Jane like the big table they get when they book for four, even though they inevitably turn up as a couple, leaving the restaurateur in a quandary: does he show them the grace and hospitality he’s known for or does he tell them what it means to his business — financially — when a booking for four suddenly halves on a Friday night?
So here’s a simple truth: it’s easier to tell white lies to a smartphone app than it is to a person over the telephone. And as restaurant reservations migrate en masse to digital platforms, so too do problems for a restaurant industry not always dealing with considerate customers.
James makes restaurant reservations for his high-powered boss all the time, but the boss is a bit finicky. So James often books several venues for Friday lunch, just to cover his bases. It makes him look like a hero, actually.
But James doesn’t bother to cancel the redundant reservations he made so simply on his smartphone; it’s Friday lunch, after all, and the boss spends and tips big at all his favourite places all the time. So they won’t mind, will they?
But when the table for four reserved in the name of Mr Big is still unoccupied by 1.20pm, it’s fairly unlikely anyone on the waiting list is still looking, let alone needs a table for four.
So here’s another simple truth: as our dining culture changes and Australia’s love affair with chefs and their restaurants continues, so too will our relationship with these restaurants need to keep changing. For many restaurants, the power balance has had to shift, sometimes at the risk of the kind of hospitality unthinking customers have abused.
Whether we — the diners — like it or not, restaurants increasingly will find themselves needing to ask for credit card details in advance and charging for disruption, which opens a dark and mysterious Pandora’s box: what is a reasonable bookings and cancellation policy?
Where does business begin and hospitality end? At what point should a restaurant feel it is appropriate to charge for a service that hasn’t been delivered? And when must we, the customer, buy into the business affairs of a service provider with whom we have merely indicated our honest intention to buy something and pay for it, but may change our minds because after-work drinks were just too much fun and now the team is all heading off for pizza and, well, that sounds pretty good, right?
Should a restaurant meal be ticketed?
These questions are being grappled with on both the supply and demand sides of the equation. But as someone who makes reservations for a living, I have noticed two things: the number of places asking for card details, with a cancellation policy, is growing fast; on the flip side it is still surprising how many big-end-of-town restaurants are happy to work on the old-fashioned handshake arrangement: your intention is good enough for us, thank you, even when that handshake is a metaphorical, digital one.
Mutual respect is a great thing until it’s abused.
From the restaurant industry’s perspective, no-shows are a scourge and have prompted, in many cases, no-reservations policies or, at the top end, cancellation fees in lieu of missed business.
“We had 90 people book and later confirm verbally at one venue on the Mother’s Day weekend who simply did not turn up,” Adelaide restaurant entrepreneur Simon Kardachi says. “No other industry in the world has to deal with this level of discourtesy.
“In more than 20 years of business we have had way in excess of 100,000 people not turn up, probably more. We may well have re-sold some of those seats, but is this really appropriate?”
The answer, surely, is no. And so, at the very high end, a cancellation or change of plan can be an expensive business.
At Brae, for example, the restaurant in Victoria’s Western District that won a coveted place on the World’s 50 Best list, the policy as expressed on its website borders on the punitive: “Credit card details are required for dining reservations. No charge is made prior to your visit, however charges apply for late cancellation, reduction of diner numbers or change of date: 100 per cent menu price within 48 hours; 50 per cent menu price within three-seven days.” And further: “A 50 per cent deposit is payable for guest suite accommodation reservations. Twenty-eight days’ notice of cancellation or change of date is required.”
“It happened to my parents,” a hospitality operator who asked not to be named tells The Australian. “My mother had to go to hospital on a Monday afternoon; my father notified Brae, where they were booked for Thursday dinner. They were told they’d be charged 50 per cent of the meal, and they’d already paid 50 per cent of the accommodation there as well. So it was a fairly expensive cancellation.”
But the restaurant, two hours from Melbourne in the rural hamlet of Birregurra, rang the couple on Thursday morning to see if there had been any change; there had. They were now able to travel, the table and the room were still available, and no money was lost.
But what if the cancelled restaurant table is subsequently sold?
“We won’t sell a diner’s reserved table to anyone else,” says Brae’s Julianne Bagnato “and if a diner is unable to honour their reservation a penalty is charged, which reflects the cost to us of holding that table for them if it is not used … Never have we both charged a cancellation fee and taken an additional booking for that table — that is not the purpose of the policy.
“Yes, our cancellation policy is strict, (but) the intent is fairly simple. As a business, we rely on the reservations made by diners being honoured. Late cancellations are costly.
“We’ve found the most effective method of reducing cancellations is to ask diners to enter an agreement on booking, which makes this exchange explicit.”
Bagnato says the policy is made very clear to diners before a booking is made.
Sadly, she says, it’s the behaviour of some diners that forces restaurants into a corner.
Diners, for instance, who reserve several tables over various dates, sometimes under different names, only to cancel the unwanted tables at the last minute once plans are finalised, leaving the restaurant with empty tables despite a long waiting list.
Diners who book for tables for four or more, knowing it’s the last availability remaining, only for two people to arrive, leaving the restaurant with reduced numbers despite tables of four or more on the waiting list.
And people who book multiple tables of different sizes under different names for the same date before deciding their group size and cancelling the unwanted table, she says, “if they don’t forget to cancel it, which has also happened”.
But for restaurants located in city areas, things are different.
“We always endeavour to refill a table from the wait list to avoid charging a cancellation fee,” says Sarah Musgrave of Melbourne’s Vue de Monde, possibly the nation’s most expensive restaurant and an early adopter of the more assertive system of reservations management.
“If we are able to refill the cancelled table with guests from the wait list the cancellation fee would not be charged. The same process is applicable to date change requests received within the 48-hour window. Provided we can refill the table, no fee is enforced.”
It’s a similar story at Attica, in Melbourne’s Ripponlea, probably Australia’s most in-demand restaurant. But it is small. “If a table for four doesn’t show up, that’s nearly 10 per cent of our revenue for the night,” proprietor and head chef Ben Shewry says. “I think all business should take reasonable measures against losses like that.”
Attica’s 48-hour booking policy is “because we are a small business with nearly 40 staff”, he says. “And we cook for 60 guests each night, five nights per week. If we didn’t have this policy Attica would go out of business pretty quick.”
Shewry says he needs to operate at maximum occupancy “every night” to remain financially viable.
“We will always try and help accommodate people with reservation changes within the 48-hour cancellation period if we can, but that’s not always possible and occasionally we do need to charge people, especially if they don’t show up for their booking when we therefore have no chance to fill their table.” Tables for four or more are much harder to fill at the last minute from the waiting list, especially midweek. “That’s why the policy is in place,” says the chef.
In Sydney, at the soon-to-reopen Quay — one of the country’s most prestigious tables — cancellation fees are meant not to penalise diners but to trigger them to contact the restaurant if they are unable to attend, according to John Fink of the restaurant’s parent company Fink Group.
“This gives us the opportunity to contact other diners on our wait list, rearrange the room or accept walk-ins. (But) at some of the restaurants, in particular Quay, we rarely get walk-ins, so contact from a guest is critical.
“I must say that the majority of our guests contact us, even right up to the time of the reservation.
“Of course, sometimes there are outstanding situations and we waive the fee altogether or make alternative arrangements — we find most people want to book for another night.”
Communication is key, he says.
“After booking, guests receive an acknowledgment email. The week of the booking, guests receive a booking reminder and, finally, guests will receive a text to confirm if they haven’t responded to our email.”
It’s a two-way street.
Sunny Lusted, of critically acclaimed Sydney fine diner The Bridge Room, applies a cancellations policy only on Friday and Saturday nights, and even then it’s more carrot than stick. “(It’s) primarily there to prompt the diner to alert the restaurant to a change of plans as soon as possible,” she says.
“We try to be very accommodating when there is a change of plans. Our aim is to cultivate regular guests, not have a revenue stream from cancellation fees.”
In fact, Lusted cannot recall ever charging for an individual cancellation. “Even when a cancellation comes within minutes of the guest’s arrival, their having made contact allows us to reach other potential guests on our wait list, accept walk-ins and also to reallocate tables so the seating plan in the dining room feels balanced.”
The impact on the ambience of the room and experience for all the diners is a consideration for a small dining room at the high end.
“We have charged diners for no-shows,” she says, “but it was for a special event for which we had 20 guests on the wait list.” Even then, she allowed those diners to use their deposit against a future date.
“Hospitality needs to be at the beginning and the end of each and every aspect of the restaurant and needs to be at the heart of what we do,” Lusted says.
Legalese notwithstanding, when it comes to hospitable communication, there are policies that leave something to be desired.
“We require credit card details to secure all reservations,” states Melbourne’s boutique creative shop Ides. “There is no upfront charge, we merely hold them as a guarantee. We require at least 48 hours’ notice for any alterations or cancellation, or you are at risk of a cancellation fee of the full price of the menu per person.”
Melbourne’s high-end kaiseki restaurant Ishizuka says: “We require a minimum of 48 hours’ notice for any cancellation, reduction of diners or date changes. Failure to do so, we reserve the right to charge 100 per cent of the menu price ($215) as cancellation fees.”
In the US and some other countries, the “ticketed” meal system offered by the platform Tock works for a certain kind of restaurant, as it has for trailblazing chef-restaurateur Shaun Quade at Melbourne’s Lume. But it’s not for everyone.
“Just like a sporting event, concert or theatre ticket, all sales are final and no refunds are issued,” says the Tock FAQ section when you decide to eat at Lume. “If however a reservation absolutely must be cancelled or changed due to unforeseen circumstances, a full refund or change of date may be given but will be at the discretion of management. However, your ticket is completely transferable.”
For others, however, even a punitive cancellation policy is a bridge too far. Adelaide’s Kardachi, with a cluster of successful restaurants under his belt, knows the market better than most.
“Unfortunate as it is,” he says, “many customers find it very unhospitable when they are asked to make a deposit at booking — they get their back up enough when you ask for a credit card over the phone, let alone a deposit. We do this for large groups … But when eight of the 12 turn up we don’t make the eight pay for the four who haven’t.
“As frustrating as it is, we accept that it’s the nature of the industry.
“Adelaide is a very conservative market, highly competitive, where customers will walk if our offer and their expectations are not met. If we charge someone for not coming, with or without notice, we’ve lost that customer forever.”
It’s all about mutual respect. Taking anything, or anyone, for granted, including our restaurants, is a guaranteed race to the bottom. And if the reservations-on-trust honeymoon is over, we only have ourselves to blame. Pity.