When cancelling your reservation costs as much as dinner

Restaurants fed up with no-shows and last-minute cancellations are increasingly charging fees as much as 60 a head

To celebrate his wife's birthday in 2022, Mr Brian Azara, a mechanical engineer in New York City, booked a table for two at a Michelin-starred restaurant.

But when their son was suddenly hospitalised with severe asthma, Mr Azara had to cancel the reservation. A few minutes later, he checked his credit card account and saw a US$200 (S$266) fee.

"It was probably 23½ hours before we were supposed to be there," he said, yet the restaurant refused to reverse the charge, citing its 24hour cancellation deadline.

While he sympathises with the financial challenges restaurants are facing, he said the charge "really kind of stung".

His run-in with the cancellation fee reflects a broad shift among restaurateurs, many of whom now feel they have no choice but to penalise diners who are increasingly cancelling reservations at the last minute or not showing up at all.

Even a few missed reservations, they say, can upset all the careful planning restaurants do to manage operations and balance the books.

"Cancellation fees bring people back to reality when they make a reservation," said Ms Erica Hall, a general manager and co-owner of Brooklyn restaurant and "karaoke saloon" Chino Grande. "They remember it's an agreement." According to data from reservation service Resy, 17 per cent of American restaurants on the platform charged at least one cancellation fee in January, up from 13 per cent a year earlier and 4 per cent in January 2019.

The practice was even more widespread in big metropolitan areas. One-quarter of New York restaurants on Resy charged at least one cancellation fee in January, as did one-fifth of restaurants in Los Angeles and Miami.

Ms Hall, who has worked in restaurants for nearly two decades, noticed a distinct uptick in noshows and cancellations after social distancing rules and vaccine mandates were relaxed in New York City in early 2022.