When Canceling Your Reservation Costs as Much as Dinner

To celebrate his wife’s birthday in 2022, Brian Azara, a mechanical engineer in New York City, booked a table for two at a Michelin-starred restaurant in Brooklyn. But when their son was suddenly hospitalized with severe asthma, Mr. Azara had to cancel the reservation. A few minutes later, he checked his credit card account and saw a $200 fee.

“It was probably 23½ hours before we were supposed to be there,” Mr. Azara said, yet the restaurant refused to reverse the charge, citing its 24-hour cancellation deadline. While he sympathizes with the financial challenges restaurants are facing, he said the charge “really kind of stung.”

Mr. Azara’s run-in with the cancellation fee reflects a broad shift among restaurateurs, many of whom now feel they have no choice but to penalize diners who are increasingly canceling 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 Erica Hall, a general manager and co-owner of the Brooklyn restaurant and “karaoke saloon” Chino Grande. “They remember it’s an agreement.”

Just two months after opening in 2022, the Brooklyn restaurant Chino Grande began charging a $20 cancellation fee. No-shows and cancellations dropped quickly.Credit…Marissa Alper for The New York Times

According to data from the reservation service Resy, 17 percent of the U.S. restaurants on the platform charged at least one cancellation fee in January, up from 13 percent a year earlier and 4 percent in January 2019. The practice was even more widespread in big metropolitan areas: A 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.