Restaurants Battling Last-Minute Cancellations
A significant number of restaurant owners (18%) are contemplating shutting down for good due to a surge in last-minute cancellations and no-shows, according to recent research conducted by Barclaycard Payments, a leading UK payments provider.
The hospitality sector, already grappling with challenges such as inflation, high energy prices, and staffing shortages, is facing additional pressure from this concerning trend.
Lost Profits and Major Repercussions
Nearly a quarter (23%) of restaurant owners consider last-minute cancellations and no-shows as one of their most significant problems today. An alarming 37% of UK adults who regularly dine out admit to canceling reservations on the very day of the booking, providing less than six hours notice.
This behavior is not only affecting the industry’s bottom line but also adding to the food waste issue (56%), staffing challenges (34%), low team morale (24%), and early closures (23%).
Costing Up Cancellations
With the busy summer season ahead, 30% of restaurant owners are anxious about how no-shows will negatively impact their profits. Only a meager 16% claim they can recover loss of earnings through cancellation fees. Restaurant proprietors who have experienced no-shows and last-minute cancellations estimate an average loss of £89 for each absent diner.
Diners’ Impact on the Industry
A staggering 60% of diners cancel their reservations with 24 hours’ notice or less, with no-shows (19%) being the most common form of cancellation. As a result, 40% of restaurant owners and managers have observed a rise in no-shows and short-notice cancellations over the past year, experiencing increases of 40% and 35%, respectively.
Currently, only 34% of restaurateurs take card details when booking and charge a cancellation fee if customers do not show up. However, in an effort to mitigate the impact on their businesses, 37% plan to implement this measure.
Factors Deterrents and Reasons
To discourage no-shows, the hospitality industry is employing various methods, including requiring card details without charging a fee (43%) and taking upfront deposits (35%).
Additionally, 14% of millennial diners admit to making ‘bulk bookings,’ intending to have multiple choices for dining and then forgetting to cancel, while 12% of those aged 18-26 confess to the same behavior.
Friends and family members bailing on plans are the primary reason (11%) cited by diners for skipping out on a reservation without canceling.
Guilt and Dining Out Desires
Despite the increase in cancellations and no-shows, 39% of diners feel guilty about letting restaurants down. Surprisingly, 11% of diners would still rather pay a cancellation fee than phone a restaurant to cancel, accepting an average loss of £29.
However, 33% of diners say they would be less likely to cancel a restaurant booking if they were required to pay a deposit.
A Ray of Hope for Restaurants
Amid the challenges, the desire to eat out remains strong, with 51% of diners stating that British summertime increases their likelihood of dining out. Nearly a fifth (17%) of millennials are planning to dine out more in the upcoming summer months, and 26% of those aged 18-26 are eager to explore new dining experiences.
Tom Aikens’ Insight
Michelin-starred restaurant owner Tom Aikens acknowledged the growing issue of cancellations and shared how his restaurant Muse has implemented measures to minimize their impact, including detailed booking confirmations, reservation confirmation requests six days prior, and a strict five-day cancellation policy.
Nevertheless, unavoidable circumstances still lead to challenges like food wastage, staffing issues, and loss of sales.
Understanding the Impact
Half of consumers polled (50%) empathize with restaurant owners’ financial struggles in the current economic climate. Over a quarter (27%) said they would cancel a restaurant booking earlier if they knew it directly impacted the venue and staff.
Barclaycard Payments’ Insight
Kirsty Morris, MD at Barclaycard Payments, emphasized the importance of helping diners understand the impact of late cancellations on businesses and encouraging them to provide advance warning.
She further urged restaurateurs to explore partnering with payment providers like Barclaycard Payments to enhance their payment offerings and implement deposit requirements during the online booking process to deter cancellations.
Supporting the Hospitality Industry
Barclaycard Payments, a leading UK payments provider, processed over 8.7 billion card payments in 2022 and offers a range of digital services, including pay-at-table technology and secure payment experiences for customers.
By working with payment providers like Barclaycard Payments, restaurateurs can improve their payments offering and take steps to mitigate the impact of last-minute cancellations and no-shows.
