Cash-strapped restaurants turn up heat on no-show diners

The declining fortunes of restaurants have prompted headlines recently, with 12 branches of Jamie Oliver’s Italian chain having shut their doors and other major outlets admitting to feeling the pinch. But some owners are fighting back. Restaurateurs from independents to major chains are naming and shaming “no show” guests, requiring deposits and even selling tickets for tables.

Damian Wawrzyniak, owner of House of Feasts in Peterborough, launched a campaign to combat “no shows” after he said they cost his business £3,000 in just one weekend.

Several high-profile independent restaurants revealed that they had lost hundreds or thousands of pounds to Valentine’s Day no shows: some, including the Cauldron in Bristol, named and shamed them on social media. At Marcus Wareing’s Tredwells in central London, 20 people didn’t turn up, while Bar 44 in Cardiff said 16 tables were left empty.

Now the Casual Dining Group, which owns the Bella Italia, Café Rouge and Belgo chains, is backing the campaign. James Spragg, its chief operating officer, said: “This is an issue we are going to support.”

He said no shows would once make up only 5% of bookings but could now be as high as 15% on some nights.

Spragg added that it was difficult for a mid-range chain to take deposits except at Christmas, but the group was considering asking for a small deposit, say £5 a head, for parties of six or more, with a chance to cancel up to 48 hours before. The scheme could be tested in the next few months.

He said the issue was being fuelled by online booking services, which allowed diners to book a table from their phone with a click. “It’s so much easier for people to book that they are booking two or three restaurants, and only turning up at one,” he said.

Wawrzyniak agreed. “Usually they are big groups – of eight, 12 or 20 people – who book and then simply don’t turn up. We’re left with empty tables and have probably had to turn other bookings down in good faith that those with reservations would show,” he said.

Restaurateurs say no shows tend to be more prevalent at the beginning of the year, but in 2018, lost bookings are only piling pressure on an industry that is already suffering. Increases in the minimum wage and business rates, and higher food prices caused by the weak pound, have all ramped up costs just as diners were tightening their belts because of wage rises being outpaced by inflation.

A string of restaurants in the mid-market, where private equity has fuelled expansion and increased competition, have had to close sites or even been forced into administration.

Peter Sánchez-Iglesias, co-owner of Paco Tapas in Bristol, said the restaurant was now losing up to 10% of bookings on a Saturday night, amounting to thousands of pounds in sales each week. “It’s massive,” he said. “For us, it’s crippling.”

He said the group had signed its fine dining establishment in Bristol, the Michelin-starred Casamia, up to the Tock booking system, which sells prepaid tickets for a meal in the same way as a theatre would for a play, after seeing a big rise in no shows about four years ago.

He said that had completely solved the problem at Casamia, but he hoped he wouldn’t have to introduce a similar system for Paco Tapas, which was more informal.

Wawrzyniak has also said he is considering signing up to Tock.Some restaurants have long taken deposits for special occasions such as Valentine’s Day or for groups of six or more, but the practice may now become more common. A number of chefs told Wawrzyniak’s #stopnoshow campaign that they were considering or already taking deposits or credit card numbers with bookings, or considering selling tickets. Others just don’t take bookings, relying on walk-up trade to turn tables quickly.

Online booking sites said they had tried to tackle the problem. OpenTable said it prohibited users from making more than one booking in the same time slot and that diners who didn’t show up for a reservation four times over 12 months were blocked. It said its no-show rate was about 4.5%, less than the 5.4% for diners who book in the traditional way by phone.

But Nadia Leguel, UK business director of Bookatable, told the BigHospitality trade website that paying a deposit or asking for credit card details put people off booking, and that people reported trying to cancel by phone but the restaurant not pick ing up when they called.

Asking for money up front also has drawbacks. Tommy Banks of the Michelin-starred Black Swan at Oldstead in North Yorkshire, told the Caterer that he had been threatened with bad reviews by customers who were angry about the restaurant’s cancellation policy (it withholds an initial fee if the table cannot be filled by another party). But as the squeeze tightens on profits, the conflicts between casual diners and their cash-strapped hosts may be about to get serious.

What’s eating the restaurant trade?

Higher costs

Business rates and wages are up, as is the cost of imported food. Wages are up partly because of the rise in the legal minimum but also because finding workers is more tricky. High employment means there are less Brits available while the Brexit vote is putting off some EU workers who are already less keen because of the lower value of the pound.

The rise of delivery

Deliveroo, UberEats and Just Eat are driving a rise in demand for home delivery, cutting the number of customers eating out.

Over-expansion

Until 2015/16, dining out was growing strongly. Private equity firms helped mid-market chains expand, which increased competition just as the market was feeling the squeeze.

Spending shifts

Takeaway breakfasts and lunches are also diverting money away from sit-down restaurants.