If you’ve ever been stood up for a date, then you know how bad it feels. You’re dressed to impress and feeling excitement about the night ahead. But that positive vibe gives way to impatience as the minutes tick by with no date in sight. Then, your mixed emotions morph into anger when you face the fact: Your date is not showing up.
Few diners look at it this way, but that’s exactly how restaurateurs feel when people who made reservations fail to claim their tables, according to Ani Meinhold of Phuc Yea, a Viet-Cajun restaurant in Miami. “We always put our best foot forward for diners, so when they don’t show up, it’s a slap in the face. It hurts. We’re all demoralized,” she says.
The emotional toll is hard enough, but no-shows take an even more devastating bite out of a restaurant’s bottom line, affecting everything from that night’s profits all the way to changing how much food restaurants order from farmers. Here’s exactly what happens to a restaurant when diners bail on a dinner reservation with no heads up. When you understand the ripple effect you set off, you may think twice before no-showing again.
A common problem made worse by the pandemic
When diners no-show, they’re usually thinking it’s just them, just this once, if they are thinking about how their decision affects the restaurant at all. The trouble is that any one no-show on any given night is not an isolated event. It’s part of a larger pattern of diner behavior that creates serious financial and logistical problems for restaurants.
The Wall Street Journal has reported that in a city like New York, about 20 percent of diners who make reservations never arrive, but Meinhold says at Phuc Yea it can often be up to 50 percent. When that happens, it’s incredibly disruptive to the already chaotic work of running a restaurant, adding another level of uncertainty to a notoriously unpredictable business. And during the last ten months, COVID-19 has only heightened the problem of no-shows for restaurants.
Because of the reduced capacity necessitated by restrictions, each no-show represents a bigger slice of the day’s potential revenue pie. Plus, Meinhold says that news such as a spike in COVID cases or that the stock market is down can mean less-busy nights, too. “When you add no-shows to that, it’s a lot of wasted food and labor,” she says.
Chipping away at slim margins
When you crunch the numbers, it becomes clear that every single no-show diner affects a business financially, as illustrated through Phuc Yea.
The check average per person at Phuc Yea is $55. “I had 17 people not show up on Saturday,” says Meinhold. The restaurant’s total capacity is 70 seats, so those no-shows mean 24.3 percent of those seats. When they sit empty, that’s a quarter of the night’s potential profit down the drain. “A table of four that doesn’t show up is a loss of between $250 and $300,” she explains.
And that sum is only a fraction of the damage. There’s the wasted labor associated with the preparation of food that’s never ordered. “A lot of our dishes are time and labor intensive. It takes three days to make our famous short ribs,” she notes. Restaurants are resourceful when it comes to preventing waste, but no-shows can make it impossible to avoid. And then there’s the money lost from other diners who may have wanted to book that same table but didn’t have the opportunity to reserve it.
Like most restaurateurs, Meinhold makes decisions about how to staff the kitchen based on the number of reservations on the books. A night that looks like it will be busy based on the number of reserved tables means additional cooks will report for shifts that night. When no-shows run high, that leaves those employees with little work to do. “Cooks standing around twiddling their thumbs hits my pocket,” Meinhold explains.
A ripple effect
Restaurant owners are not the only ones financially hurt by no-shows — the impact trickles down to suppliers, too.
For a restaurant like Contigo in Austin, that means a network of other small businesses, including local farms and purveyors. “If we’re not utilizing the ingredients we have in house, we’re not going to order more,” says managing partner Dana Curley. “That will affect someone else’s bottom line.”
Just as the restaurant will try to put prepped food to work feeding staff, a farm will have to seek out uses for unsold products, such as a CSA box or another restaurant buyer. Before the pandemic, another restaurant might have been a good option, but the pandemic has made it a harder sell. Budgets have tightened everywhere.
Front-of-the-house staff deal with the fallout, too. When larger parties no-show, it can mean a server makes half of what they would have that shift. When no-shows pile up in a night, leaving a dining room unexpectedly quiet, managers may decide to send servers home. “If you need five shifts a week to get by, that’s 20 percent of your income for the week,” says Meinhold.
When that happens often enough, servers begin to look for new jobs. “They’re checked out,” says Meinhold. If they do leave, a new server is hired, and Meinhold needs to train them — a costly process. “It takes a new server a solid month to get our concept down.”
Restaurants have limited tools available to combat the problem of no shows. OpenTable helps by deactivating user accounts when a diner has no-showed four times. Many restaurants send a confirmation text message or have a reservationist call to confirm. Others offer prepaid experiences to highlight special menus. Some require credit cards to book reservations for large parties and charge a fee if people don’t show up.
Contigo has taken the latter approach, starting with credit card requirements for parties of eight to ten and eventually expanding to parties of six or more. “We were finding that people were making reservations for five to seven people, and those were becoming the greater number of no-shows,” Curley explains.
Credit card requirements are effective to a certain point, she says. Some people take it very seriously, giving the requisite 24 hours to cancel before being charged. But in reality, the penalty for diners is typically small — $5 per person, in Contigo’s case — and not enough to make up for the lost revenue of the empty table.
Phuc Yea has a similar policy for parties of six of more with a $10 per person no-show fee. “But we’ve never charged anyone,” says Meinhold. Not only does it not recoup the lost revenue, but it also needs to be weighed against the value of a possible future visit. “When I look at the notes, I’ll see they’ve dined with us five times before. If I charge them, there’s a good chance they’ll never come back. For a small restaurant like ours, I can’t take that risk,” she explains.
Before the pandemic, Meinhold hedged against no-shows by slightly overbooking the restaurant, which worked out most of the time. “But it can also cause chaos,” she says, because sometimes everybody who booked does in fact show up. “Then I have to start giving away free stuff, glasses of bubbles or snacks while people wait.” But the pandemic has eliminated overbooking as an option — restaurants simply cannot risk people piling up in an era with social distancing rules.
So what can diners do?
At a time when restaurants are facing such enormous obstacles and many diners want to support their favorites to help ensure their survival, it’s easy to overlook the basics. Remember that a restaurant isn’t some faceless machine; it’s a business, often a small business, run by human beings with feelings. Don’t be the person who stands someone up.
And if you can’t show up, cancel that reservation, and do it the minute you know you aren’t going to make it. “We are just grateful for people letting us know that they’re not going to come in,” says Curley. “It gives us a leg up, knowing we can go ahead and cut staffing back, that we don’t need a second host for the rest of the night. It’s showing that you respect the fact that we’re trying to operate a business as best we can.”
When diners make it a policy to show up when they say they will, it helps the restaurants they love survive. And at a time like this, restaurants need all the help they can get.