Hospitality businesses fear closure as no-show diners cost £90 per head

No-show diners are costing restaurant owners almost £90 per head as a result 18% of restaurant, pub and bar owners consider closing for good, according to new data from Barclaycard Payments.

The data revealed that with the majority (60%) of customers giving 24 hours or less notice when cancelling their reservation, hospitality businesses are facing knock on effects such as increased food waste (56%), staffing challenges (34%), low team morale and being forced to close early (23%) and having to let team members go (22%)

Three in 10 of those polled are understandably worried about no-shows negatively impacting profits this summer – as only 16% say they can recover loss of earnings through cancellation fees.

The data from Barclaycard Payments also found that on average, four in 10 owners and managers have seen an increase in no-shows and late cancellations over the last year, by an average of 40% and 35% respectively.

Only 34% of businesses surveyed currently take card details when booking and charge a cancellation fee if a customer is a no-show. Although, in a bid to change customer behaviour, a further 37% said they plan to introduce this measure.

Other deterrents being employed by the hospitality industry include requiring card details when booking, though not actually charging a fee (43%) and taking an upfront deposit to put customers off not attending (35%).

The news comes as 14% of millennial customers (27-42) admitted to making ‘bulk bookings’ so they have a choice of where to go out, and then forgetting to cancel the unused reservations, a figure that sits at 12% for the younger generation of 18–26-year-olds. Meanwhile, over eight in 10 (83%) of those aged 59-77 have never not shown up to a restaurant without cancelling.

The top reason for cancellations or no-shows was friends and family members bailing on plans, according to over one in 10 (11%) followed by deciding to stay in instead (9%), forgetting about the booking (8%), rain (7%), and lack of a babysitter (5%) or dog sitter (6%).

When it comes to methods of cancelling, over a fifth (21%) admitted they don’t feel as bad about cancelling if they’ve booked online or via social media as there is no personal interaction.

One in five (19%) also say they feel too awkward to speak to someone on the phone to alert the venue to their change in plans.

Encouragingly, the report stated that despite the ongoing issue with cancellations, there is still a strong desire to eat out.

British summer time, with its warmer weather and longer days, increases adults’ likelihood to eat out more, according to 51% of those polled.

As the summer holidays approach nearly a fifth (17%) of millennials are planning to dine out more than they have done over the last six months, rising to over a quarter (26%) for the younger audience (those aged 18 to 26).

Tom Aikens, Michelin Starred restaurant owner, said: “It’s great to see so many people still looking forward to meals out despite the current climate. 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.

“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.”

Kirsty Morris, MD at Barclaycard Payments, added: “The hospitality industry has faced challenge after challenge in recent years and is continuing to feel the strain against the backdrop of the cost-of-living. With longer days and summer holidays around the corner, it’s crucial to the success of many of these businesses that diners understand the impact that not showing up can have; something that seems small to a customer can have a real knock-on effect on a restaurant’s bottom line.”