Following two years of lockdown trade and amid inflation and labour shortages, the hospitality industry is now facing a cancellation crisis: leaving seats empty, food wasted and restaurateurs on the edge.
Aug 10, 2022 1:32am
Last Tuesday, Shannon Martinez of Melbourne’s Smith and Daughters posted an SOS on her personal Instagram Stories.
“We’ve had 2 large parties cancel on us for tomorrow night at Smith + Daughters,” read her post. “If you’ve been thinking of coming in, I’d be very appreciative if you booked yourself a table to help us fill the seats.”
Martinez isn’t the only person grappling with last-minute cancellations. Fellow Melbourne restaurateur Hannah Green of Etta fielded 77 cancellations on a single Saturday evening: seven more than the 70-seat capacity of her popular Lygon Street wine bar. “I feel like it’s harder now than it’s ever been,” says Green, who recently closed Etta for a week to give her a team much-needed break.
In Sydney, creative director of Sydney’s House Made Hospitality group, Scott Brown, recently told GT up to half of all bookings at the group’s Hinchcliff House fine-diner Lana were being cancelled at short notice. Cancellations, of course, aren’t exactly a new issue in dining circles, but in the era of Covid and isolation mandates, they seem to be occurring far more frequently.
“I understand that there are many people out there who do genuinely get unwell from Covid, but people never used to cancel a table of 10 because one person got a cold,” says Martinez. Like many operators, Martinez has cancellation policies in place at her restaurant but, also like many operators, she is loath to enforce them when guests cancel due to Covid. “I think a lot of people have twigged on to the fact that you can cancel and use the Covid excuse and not get charged.”
While getting out of a cancellation fee might be a “win” for diners, it’s anything but for restaurants. In a best-case scenario, harried staff spend precious time contacting waitlist customers (or taking to social media) to rebook these tables. The worst-case scenario? Tables sit empty during service, costing small businesses lost revenue as well as wasting food: tough to stomach when a head of cabbage costs $17 and a two-kilogram box of button mushrooms is $78. Then there’s the knock-on effect on labour costs, both in terms of wasted kitchen prep time and surplus front-of-house staff being rostered without guests to look after. (According to Fair Work, businesses can’t cancel casual or part-time workers’ shifts last-minute without paying them for a minimum number of hours.) For an industry notorious for operating on thin margins, things had to change. And fast.
In some instances, this has meant passing costs on to guests – credit card surcharges, perhaps, or Sunday loading – that were previously absorbed or factored into prices. In other instances, it’s translated to chefs creating dishes driven by the bottom line rather than creativity. For Alo Simmulmann, sommelier and co-owner of Perth wine bar Corvo, it’s led to the introduction of a $20 pre-authorisation for bookings after a particularly wild week in which 120 covers cancelled over three days. While Simmulmann was reluctant to add the charge – he didn’t want an extra step for guests making bookings – he admits it’s helped stem last-minute cancellations while also looking after guests doing the right thing.
“I think what pre-authorisation did was take away disingenuous reservations,” he says. “But if people call the venue with a genuine reason for cancellation, the fee is waived or we’ll issue them with a gift voucher.”
Federica Andrisani, co-owner of Hobart’s Fico, is also a believer in open discussion between guest and restaurant. Like Simmulmann, Andrisani is all about showing guests a good time.
“If you call well ahead of your booking and say you can’t make it, we’ll say, ‘don’t worry about it’, and do all that we can to get somebody else in,” she says. “I’m not happy taking people’s money for nothing.”
In the six years Andrisani and her husband Oskar Rossi have had Fico, they’ve only had to charge one guest the pre-authorised amount when they were unable to fill their seat. No-shows, however, are a different story: not just because the couple deals with at least one a month, but because “99 percent of the time”, the credit card on file doesn’t work and has either cancelled or is already maxed out. For any small business – not least a small 40-seater in a regional capital – hits like this sting. If they keep continuing, the pain might not just be short-term.
“The damage it [cancelling bookings last-minute] is causing is really substantial,” says Martinez. “At a point where we’re all still just hanging on, it’s going to be the difference between some businesses staying open or not.”