Should you pay for cancelling your dinner reservation at the last minute?

Should you pay for cancelling your dinner reservation at the last minute?

Absolutely, say local restaurants reeling from group no-shows. And Artichoke’s Bjorn Shen is leading the charge.

Bjorn Shen Artichoke restaurant penalty fee 1
Artichoke's chef-owner Bjorn Shen says the restaurant lost a third of its revenue in one night thanks to reservations that had not been honoured. (Photo: Bjorn Shen)

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SINGAPORE: What may have sounded like an impassioned rant by Artichoke restaurant’s Bjorn Shen was a risk-it-all attempt to spotlight a real problem faced by many restaurants, said the 35-year-old chef and restaurateur.

In a post on his personal Facebook page on the evening of Mar 24, a Saturday, Shen wrote that one-third of Artichoke’s revenue for the night had been lost thanks to reservations that had not been honoured.

Also in the post, which was shared more than 400 times, Shen lamented the “wasted food”, “wasted effort and money” and “over-rostered staff” that the restaurant saw “every week”. He then announced that from this month, the restaurant would begin taking credit card details for group bookings of 10 or more people.

Credit card pre-authorisation is a common practice at restaurants around the world. In order to reserve a table, customers must provide their credit card details, and those who do not honour their bookings are charged a portion of their expected spending.

Artichoke’s new policy, Shen explained, works like this: Your credit card details are taken, and if you cancel less than 24 hours before your booking or simply do not show up, a penalty fee is charged. According to Shen, that fee is half of the average bill for brunch and dinner services.

“The average check for brunch is S$36, so the fee is S$18 per person booked. The average check for dinner is S$60, so the fee is S$30 per person booked.”

Wild Rocket restaurant penalty fee
Wild Rocket had a table of 20 guests pull a no-show on Christmas Eve, which would have accounted for 50 percent of the night's revenue. (Photo: Wild Rocket/Facebook)

Shen stressed that the penalty fee does not cover the costs incurred when guests do not show up. “Rent and staffing (costs) stay the same. We can’t send half our staff home and say, ‘We’re not paying you for today’s work.’ We can’t recover the cost of the food we’ve prepared,” he told Channel NewsAsia.

“So many of my customers don’t get to eat at my restaurant because tables are supposedly fully booked,” said Shen. “You’ll find us thanking people profusely when they call (in advance) to cancel. People always wonder why.”

According to Shen, on the night of Mar 24, there were close to 40 last-minute cancellations and no-shows. Two large groups – one of 12 and the other of 20 – pulled no-shows despite confirming their bookings over the phone that same afternoon.

More recently, on Good Friday evening, 14 out of 73 pre-booked seats were left vacant.

Candlenut restaurant penalty fee
Modern Peranakan restaurant Candlenut requires a deposit and a signed contract for large groups of 12 guests or more. (Photo: Candlenut/Facebook)

Artichoke, located at Middle Road and serving up Middle Eastern dishes, seats 100 diners. A total of 80 seats are allocated for booking reservations and 20 for walk-in customers.

Because the restaurant is in a destination location and not in a high-traffic, high-density restaurant strip, the problem cannot be solved by opening up more tables to walk-in customers, he explained.

In the eight years that Artichoke has been open, he shared, the average rate of no-shows and last-minute cancellations – diners who cancel their bookings within several hours – has been a fairly consistent 20 per cent. “Some days, everyone does turn up, but other days, up to 50 per cent don’t show up,” he said.

Shen estimates that last year alone, the value of the no-shows amounted to S$300,000 – although walk-in customers did help to soften the blow.

When asked if he would consider moving to a location with better foot traffic, he sighed: “If the problem is human behaviour, why should we tango around it?”

NO-SHOWS EVERYWHERE

Many establishments here already have measures in place to protect against no-shows, and not just the ultra-posh ones.

Restaurants that take credit card details for large group bookings range from mod-Sing restaurant Wild Rocket, to hip tapas bar Sum Yi Tai. Sicilian restaurant Gattopardo at Tras Street, for instance, takes a deposit fee of S$50 per person for dinner and S$30 per person for lunch (excluding GST) for bookings of eight or more people. There is also a minimum spend imposed on group bookings (S$78++ per person for dinner and S$32++ per person for lunch).

Shen said that Artichoke had attempted credit card pre-authorisation four years ago, but scrapped it after a few months because they were losing business. Upon hearing that credit card details were needed, customers would demur and not call back.

“We have been sucking it up ever since. But I’m starting to realise, ‘Why should we pay for other people’s indecision, especially now that it’s not just my livelihood on the line but those of my 20 employees? It’s about time we did something.”

Sum Yi Tai restaurant penalty fee
Hip tapas bar Sum Yi Tai is one of many restaurants that require credit card details for group bookings. (Photo: sumyitai.com)

Wild Rocket’s chef-owner Willin Low is taking Shen’s side. “Good on him. It’s disgraceful behaviour to make a booking and not turn up. People don’t realise that that’s a loss of revenue for us,” he said. “If you book tickets for a movie, the cinema takes the fees up front, because your booking precludes them from taking other reservations. The costs of running a restaurant are crazy and to have to turn other guests away because a table is booked for no-show guests is incredibly frustrating.”

Low added that Wild Rocket started taking credit card details for bookings of 10 or more guests one year ago, because no-shows were occurring more frequently.

“We had a table of 20 guests on Christmas Eve not show up. Twenty guests is 50 per cent of our revenue for a special menu that we won’t be able to use for anyone else. When we called them, they refused to answer, so I called them from my personal number. The reply was, ‘Oh, sorry, we can’t make it.’ Thereafter, we decided to take credit card details.”

Gattopardo restaurant penalty fee 2
Gattopardo requires a deposit fee for bookings of eight or more people. (Photo: Gattopardo Ristorante Di Mare/Singapore)

On behalf of modern Peranakan restaurant Candlenut, spokesperson Rachel Ang said that although the restaurant does not require credit card details or credit card authorisation for group bookings “as we do not want to hold our guests’ sensitive information”, the establishment does protect itself against no-show diners.

“We require a 50 per cent deposit and a signed contract for large groups of 12 pax and above,” she said. The contract is sent electronically to the guest, who must sign, scan and send it back to the restaurant. The deposit, which is half of their total expected bill, is made via an online payment system.

A spokesperson for modern French restaurant Gunther’s, which is expected to re-open next week, shared that credit card details are taken for parties of seven and above. No-shows or cancellations within three hours of the booking are charged S$350 per person plus taxes. “We could consider taking credit card details for all reservations, but it could deter some customers,” she said. 

TAKING A STAND

Shen predicts that with his new move, Artichoke will lose customers again, largely due to negative sentiment. “But the people we lose are probably not the kind of people sustainable for our business.” In any case, he added: “It can’t be worse than it is now.”

And what if the situation still does not improve? “Then, whatever. I’ve done my best. I tried,” said Shen. “I think there are people who would appreciate that, especially fellow industry members. I don’t run my company with multiple partners – it’s just me. That allows me to make more impulsive, stupid decisions than other companies who might be feeling the same way but don’t want to say it.”

Artichoke restaurant penalty fee
Chef-owner Bjorn Shen said that Artichoke had attempted credit card pre-authorisation four years ago, but scrapped it after a few months because they were losing business. (Photo: Artichoke Singapore/Facebook) 

Feedback so far has been mixed. “Standout online feedback is, ‘Just close shop lah’, or, ‘Who forced this guy to open a restaurant and now complain when his business is not good?’” he said. “On the other hand, there are people who say, ‘I respect what you do, I’m happy to put a deposit, and if we can’t show up, it’s our responsibility as grown, mature adults.’

“The most significant comment was, ‘The people who would be upset about you setting boundaries are the very people who were benefiting from you having none.’”

Acknowledging that the move is a “risk”, Shen said: “If I have to start all over again in a few years’ time, I’ll start all over again. But I ain’t gonna shut up.”

Source: CNA/my(pw)

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