The fed-up restaurants charging £50 per cancellation

Telegraph

01-03-2025

It used to be so simple: ring up a restaurant, pick a time and show up on the night. The suggestion that you should have to pay in advance, let alone hand over upwards of £50, would have been laughable.
How things change.
A growing number of upmarket restaurants are now charging their customers before they've even set foot in the doorway.
At Piraña, a Japanese Peruvian restaurant in Mayfair, diners now have to agree to spend a minimum of £95 on food between Tuesday and Sunday. Fail to show up for a booking, and you'll be fined £50.
It's a similar story at Gymkhana, the two Michelin-starred Indian restaurant in Mayfair, which recently introduced a £100 minimum spend.
Other examples include the high end sushi restaurant The Araki, where diners must pay a £310 fee in advance for its omakase tasting menu. An evening meal at Claridge's Foyer & Reading Room, meanwhile, comes with a minimum spend of £50 per person.
These are, admittedly, extreme examples of restaurants that cater to the wealthiest diners. However, up-front fees for reservations are increasingly common in restaurants – particularly in London.
Many are imposing steep cancellation fees on customers if they don't show up, or if they cancel but fail to give enough notice, while others now ask for a deposit to ensure diners stay committed to the booking.
'The costs have gone up, and so you've absolutely got to lock it in,' says Chris D'Sylva, the owner of the Michelin-starred Dorian restaurant in Notting Hill, which charges a £25 deposit per head that is then subtracted from the final bill.
Fresh shock from Reeves
Restaurants have battled with the surging cost of everything from food to energy in recent years as the industry navigated Brexit, the pandemic and the cost of living crisis.
Yet just as many costs were beginning to stabilise, Rachel Reeves has hammered the sector with a fresh shock.
In her Budget last October, the Chancellor announced a rise in employers' National Insurance (NI) contributions and a fall in the earnings threshold at which it kicks in.
At the same time, minimum wage is set to jump by an inflation-busting 6.7pc. Changes take effect from April.
Bosses argue the changes will disproportionately hurt hospitality because of the sheer number of part time staff in the sector.
The tax rise has already caused companies to slow or pause hiring and cancel investments. The number of people employed in accommodation and food services has begun to fall since the Budget, dropping by 58,000 in January 2025 compared with the same period last year.
Only 14pc of hospitality leaders said they felt optimistic about the sector's prospects in the year ahead, according to a survey by data firm CGA.
'Many consumers remain hesitant about their spending, and while inflation has eased in some areas, business costs remain very high across the sector ... Energy price rises and the Government's planned changes to National Insurance thresholds and rates could hardly be coming at a worse time,' says Karl Chessell, director of hospitality operators and food at CGA.
Responding to these higher costs may seen counter intuitive. Many diners might find the suggestion that they should lay down money in advance dispiriting, let alone the prospect of calculating who owes what after a large group meal and several glasses of wine have been knocked back.
'Painful' decisions
Yet, restaurant owners say these measures are necessary after years of soaring costs and economic chaos that have made it much harder to turn a profit.
'They're hesitant to do it,' says Nick Gross, a hospitality industry consultant who works with restaurateurs.
'It is quite painful to charge someone £50 a head to not sit in your restaurant. It's all about revenue protection. If I didn't sell it today, that that seat is lost.'
Chris Galvin, the co-owner of Galvin Restaurants, charges a £50 cancellation fee per person at his Michelin-starred London site, Galvin La Chapelle, if a cancellation is not made within 48 hours of the meal.
'I think people were [previously] afraid to offend customers, but everyone is on this bloody precipice, worried about business and counting every single cover,' he says.
'Why should it be that we're spending a lot of time securing the best, making sure we prepare it by hand, we rota in the staff, we're paying rent and we're turning down other bookings, and then people don't show?'
Of course, no-shows are not a new problem for hospitality. Restaurateurs have spent decades scratching their heads over how to handle the problem. But the precarious financial position that many now find themselves in means a more rigorous approach to the issue is needed.
Sunitha Southern, the owner of Kira restaurant in Cheshire, now charges customers deposits for meals on special occasions and holidays like Valentine's Day to protect her income.
'We had situations when people didn't turn up, and we had turned people away,' she says.
'It's c--p, everything is affected if they don't turn up. As soon as you open the door, you walk through, the electricity starts ticking.
'Then your staff are lined up – it's such a competitive market that if you don't give them the shifts you have promised, they will just go and they will get picked by somebody else.'
She chose to charge a deposit because after the frequency of no-shows increased in the wake of the pandemic. Southern blames online booking systems, arguing they have made booking a table so easy people feel like it is less of a commitment.
'They will say 'oh, sorry, we have double booked' or 'my partner's booked another restaurant' – and this will be when we call them. It is the most frustrating thing,' she says.
While he does charge a deposit, D'Sylva of Dorian says he makes exemptions for regulars and locals who he trusts.
'They don't pay the deposit, but they know how to behave: they honour their reservations, or they cancel them with appropriate time – everyone else, I will put them on £25 per person to keep them committed to the booking.
'We used to have a cancellation fee, but with [payment apps] Monzo, Revolut and all that, it's all two-step payment approval. They don't show up, you go to charge them and you can't – they reject the payments.'
As well as no-shows, the fee has managed to put off those who 'reservation squat', where people book several restaurants for the same evening to allow them the option to choose on the night.
While his upfront charge has been a success, D'Sylva worries the industry is going down a dangerous path.
'It's in conflict with hospitality. It's not welcoming, it's like 'let's talk about the money first, before I've delivered you anything' – that's not what I want to feel from the outset when I come to a restaurant.'