How the No-Show Culture is Hurting Restaurants’ Business

How the No-Show Culture is Hurting Restaurants’ Business

Dining in responsibly means more than social distancing

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Foodie  Foodie Your Guide to Good Taste  on 4 Aug '20


In light of COVID-19, we encourage diners to take precautions when going out. Support your favourite restaurants by getting takeaway and delivery.


Your birthday was coming up and you planned to celebrate with a lavish meal. Your friends pitched various ideas, from the Michelin-starred fine-dining restaurant that overlooks Victoria Harbour (and serves free-flow champagne) to the Japanese all-you-can-eat buffet across the road. Everything sounded delicious and you simply couldn’t decide, so you reserved a table at both restaurants. After all, as a customer, you do have the right to making a booking at more than one restaurant.

Fast forward to your birthday: with a glass of champagne in hand, your phone rings. It’s the Japanese restaurant, wondering why you didn’t show up. Oh, bummer, you mutter to yourself as you take in the breathtaking night views of Victora Harbour, I totally forgot to cancel. You mutter a brief apology and quickly brush it off – after all, your lamb shank looks fantastic.


The no-show culture: how bad is it?

No shows at restaurants

A survey conducted by OpenTable, the world’s leading online reservation platform, revealed that a quarter of 16- to 24-year-olds admitted that they regularly fail to turn up for their reservations. The reasons behind this are not surprising; the most popular reason is to “ensure that they could secure a table by booking at multiple restaurants”, followed by “forgetfulness” and “because the restaurant is quite popular, they should just reserve a table first”, according to a Japanese survey.

Aside from the apparent inconvenience caused, no-shows take a financial toll on the restaurant industry. A 2016 survey conducted by online reservation system ResDiary indicated that no-shows cost the UK restaurant industry a whopping £16 billion. When customers don’t show up, a restaurant loses revenue, along with the incurred costs of food preparation and set-up; the staff may have been paid to work overtime to accommodate the reserved tables. Essentially, a reservation prompts a restaurant to factor in the relevant costs, with the expectation of eventually gaining them back when customers pay. The no-show culture undermines this system and burdens many restaurants.

This Twitter thread, started by The Black Pig Winebar in Ireland, sheds light on the impact of the no-show culture from a restaurant’s perspective:

The Black Pig Wine Bar Twitter thread


Small restaurants are especially hard hit. While bigger and chain restaurants may have the support of corporations and enjoy economies of scale (hence lower production costs), smaller restaurants have to take the blow in full force. Nick Kokonas, co-owner of three-Michelin-starred Chicago restaurant Alinea, said that just two no-show tables account for a 100% loss in profit. In Hong Kong's competitive culinary scene, can you imagine how difficult it is for small restaurants to survive, let alone thrive, with so many no-shows?

No-show culture


Combatting the no-show culture

Restaurants have different strategies to deter diners from flaking out on their reservations. Oftentimes, we grumble at these strategies, but we need to remember why they were even implemented in the first place.


1. Charging fees

Three-starred Sushi Shikon in Sheung Wan has a strict cancellation policy: any cancellations made within 72 hours of the reservation will incur a charge of HK$1,250 per person and any no-shows or late arrivals of more than an hour will incur the full omakase price of HK$3,500. Sounds tough, but their website politely explains the reason behind this: “There is a strict cancellation policy, but thank you for understanding that this is because the fresh ingredients for each guest’s meal are flown in from Japan and we have very limited seating.”

The more serious the repercussions, the more seriously diners seem to take their reservations. Daniel Patterson, owner of two-starred Coi in San Francisco, started with a US$25 cancellation fee and then proceeded to double it, but it wasn’t until he bumped the number up to US$100 that no-show rates dropped from 20% to 10%.

It’s not uncommon for fancier restaurants or bookings for larger parties to require credit card confirmation upon a reservation. However, restaurants do witness instances of cards not having sufficient funds or diners cancelling the cards in order to evade these charges.

No-show culture


At the end of the day, restaurants do not like the idea of imposing cancellation fees. The idea of a penalty is often associated with disciplinary bodies, banks and mobile phone providers, but restaurants hope to preserve the relationship they have with their customers, not jeopardise it. The purpose of having a cancellation fee is to remind diners to take their reservations seriously, instead of covering restaurants’ losses.


2. Abolishing reservations altogether

We see quite a number of restaurants that do not offer reservations in Hong Kong, mainly restaurants with a high table turnover rate such as cha chaan tengs and fast-food chains. Admittedly, many quality restaurants in Hong Kong are blessed with a committed clientele that keeps them running even without advance bookings – gems like Pirata Group’s The Pizza Project and Pici do not take reservations but are often packed with diners.

Occasionally, when a hot restaurant from overseas lands in Hong Kong, we also witness devoted folk waiting for hours on end just to get an Instagram shot. When the novelty wears off though, things just aren’t the same.

Bakehouse Hong Kong

Photo credit: Gingerbunny


In a bustling city like Hong Kong, relying entirely on walk-in traffic isn’t practical for many restaurants. With eateries on every corner of the street, diners have numerous choices and will often give up when they see long queues (you just don’t have much patience when you’re hangry!). Also, consider the nature of certain restaurants – surely you wouldn’t waltz into a fine-dining restaurant on a Wednesday night simply because you feel peckish. Dining at certain restaurants is an occasion that needs to be respected, thus warranting a reservation in advance. And, of course, in the times of COVID-19, it would only be irresponsible to encourage unnecessary crowd forming and queuing.


3. A hybrid approach of reservations and walk-ins

Like many restaurants in Hong Kong, those in the Meraki Hospitality Group portfolio (Brazilian-Japanese eatery Uma Nota, Middle Eastern restaurant BEDU and new all-day diner Mamma Always Said) accept both bookings and walk-ins.

Alex Offe, co-founder of Meraki, explains why he has chosen this hybrid approach in Hong Kong, stating, “We were taking walk-ins only at the beginning, but we’ve seen new restaurants pop up in SoHo in recent years, so we’ve adapted our strategy. Customers in Hong Kong have the luxury to have most of the best restaurants within 15 minutes by taxi, so it’s very easy for them to choose a restaurant.

Back when we opened Uma Nota in 2017, there was a lot less competition in SoHo and guests were willing to wait a long time for their favourite restaurant, but as we’ve seen competition intensify, they aren’t as willing to wait anymore. This is why we’ve simply decided to switch to taking bookings as well as accepting walk-ins. At the end of the day, it’s a win-win situation, removing the uncertainty for guests of having to walk in as well as waiting, and it helps us optimise our restaurant capacity and accommodate as many people as possible.

In a fast-paced market like Hong Kong and during this pandemic, it is crucial to adapt to the changes in order to continue growing.”

What exactly is the right formula, one that ensures walk-ins and regulars can find a spot and reservations are plentiful enough so that potential diners searching online are not lost to the competition? LA restaurateur Bill Chait of Tesse also favours this hybrid approach, saying in a recent Skift Table article, “The classic protocol is to leave bar seats for walk-ins and to hold back a few more tables for friends and regulars and put the rest of your inventory out for reservations on OpenTable or Resy. If you run out of inventory, you lose those people swimming around in these networks.”


4. Requiring a deposit on booking

Next, a Michelin-starred restaurant in Chicago, implemented a novel restaurant reservation system where diners have to pay to reserve a spot. Diners get to choose between a lower-priced off-hour table and a more pricey prime-time table. If they have to cancel their booking, they can sell their tickets online. This concept is similar to purchasing a ticket for a concert – and perhaps diners treat it as seriously too. The ticket price is then taken off the bill, so it’s essentially a deposit.

Part of the culture of no-shows is diners covering all the bases, making multiple bookings and deciding on the night which they prefer. This behaviour has become somewhat normalised, but it overlooks the devastating impact that this can have on restaurants that prepare in advance for bookings made in good faith. Any deposit amount would likely deter this sort of behaviour, with the extra effort required to provide payment details at the time of booking too much for the lackadaisical.

Here in Hong Kong, there are a handful of restaurants on the Tock platform – mainly fine-dining Japanese – that require pre-payment upon booking, likely for the same reasons that Sushi Shikon charges a fee for no-shows. These include contemporary izakaya RONIN in Central ($500 deposit/booking) and HAKU in Tsim Sha Tsui (deposit of $200/person for lunch and $500/person for dinner).

Given the countless dining options available here in Hong Kong, it remains to be seen whether a large proportion of potential diners would balk at the commitment if more and more restaurants opt for these booking deposits, which would only work for a certain calibre of eatery anyway.


Just call

Telephones

As celebrity chef Wylie Dufresne has aptly put it, “Just call. That’s all I’m saying. Just call. You’re affecting people in a negative way that are just trying to scrape by to begin with.”

Ultimately, no one can force you to show up or cancel a reservation. We are blessed to live in a foodie heaven with delicious F&B options on every corner, and the simple act of phoning in advance to cancel is all we need to do to keep restaurants thriving. It’s also an act of respect that reflects the quality of the people in the industry.

COVID-19 has reshaped Hong Kong’s culinary scene. Besides the obvious impact of social-distancing measures on restaurants, dining patterns may have changed forever; you may be warier of eating out and prefer ordering in than venturing out to different restaurants. Who knows how the F&B industry will hold up after this unanticipated blow? Do your part – just call.


Let’s start a conversation

Hong Kong restaurants, what are your thoughts on the no-show culture? Do you have any experience to share? Feel free to contact us and let’s talk about it.



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