The no-show mustn’t go on: hospitality sector concerned summer profits will be impacted by growing last-minute cancellations and no-shows
- In the past year nearly a fifth of owners and managers of hospitality businesses have considered permanently closing due to the impact of last-minute cancellations and no-shows
- Growing trend of cancelling last minute, or simply not turning up, costs an average of £89 per customer, fuelling concerns over profits this summer
- However, appetite for booking remains strong: over a quarter of those aged 18 to 26 are planning to dine out more than they have done over the last six months
- Michelin-starred restaurant owner Tom Aikens shares his tips on how to mitigate the growing cancellation trend
The impact of no-shows and last-minute cancellations on the hospitality industry, already under pressure from inflation and high energy prices¹, is causing almost a fifth (18 per cent) of restaurant, pub and bar owners to consider closing for good, according to new data from Barclaycard Payments, a leading UK payments provider.
People cancelling their reservation at the last minute, or simply not turning up, is one of the biggest issues the industry is facing right now according to almost a quarter (23 per cent) of restaurant owners and managers.
Costing up cancellations
The majority (60 per cent) of customers cancel their reservation giving notice of just 24 hours or less, while no-shows (alongside calling and cancelling on the day) is the joint most common form of cancellation method by customers (19 per cent). Naturally, this is adding pressure to hospitality businesses and causing issues such as increased food waste (56 per cent), staffing challenges (34 per cent), low team morale and being forced to close early (23 per cent), having to let team members go (22 per cent) and staff mental health impacts (17 per cent).
Three in 10 of those polled are understandably worried about no-shows negatively impacting profits this summer – 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 customer that doesn’t turn up.
Food for thought
The data from Barclaycard Payments 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 per cent respectively.
Only 34 per cent 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 per cent say 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 per cent) and taking an upfront deposit to put customers off not attending (35 per cent). The news comes as 14 per cent of millennial customers (27-42) admit 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 per cent for the younger generation of 18–26-year-olds. Meanwhile, over eight in 10 (83 per cent) of those aged 59-77 have never not shown up to a restaurant without cancelling.
Causes of cancellations
Friends and family members bailing on plans is the top reason customers provide for no shows, according to over 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 lack of a babysitter (5 per cent) or dog sitter (6 per cent). When it comes to methods of cancelling, over a fifth (21 per cent) admit 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 per cent) also say they feel too awkward to speak to someone on the phone to alert the venue to their change in plans.
Healthy appetite for eating out
Encouragingly, despite the ongoing issue with cancellations, 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 booking if they had been asked to pay a deposit, the research highlights clear methods that can change customer 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).
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. Tom Aikens, Michelin Starred restaurant owner
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 understood 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.With more venues considering charging cancellation fees to deter no-shows, we want to help educate diners about the real impact on businesses of cancelling last-minute so they can think ahead and give advance warning – and ensure that the venue has enough time to refill tables, staff accordingly, and get the correct volume of food and drink in stock. Kirsty Morris, MD at Barclaycard Payments
Restaurateurs looking to improve their payments offering, and perhaps add the ability to take a deposit during the online booking process to deter cancellations, can do so by partnering with a provider like Barclaycard Payments. The payments provider, which processed over 8.7 billion card payments in 2022, offers access to a wide range of digital services from pay-at-table technology to quick and secure payment experiences for customers. More information is available at: barclaycard.co.uk/business/accepting-payments/corporate-payment-solutions/industry-focus/leisure-and-entertainment.
1. Research conducted by One Poll of 2,000 UK Adults who regularly use social media and eat out at restaurants, and 200 UK restaurant owners, in May 2023.
About Barclaycard Payments
Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit. We processed a record 1,291 transactions per second on the 23rd of December 2022, and across 2022 processed over 8.7 billion card payments in total. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.
