Why are Restaurants Reservation Fees Popping Up and Why Now?

There was an article in Newsday describing the growth in reservation fees for restaurants. Basically, the article explains that more and more restaurants are requiring a reservation fees in order to book a table which is refundable if you show up or cancel 3 or more days beforehand. Restaurants feel the need to impose these fees since they claim to operate on small margins and non-shows kill their profitability. These fees can run as high as $50 a person or if they require you to pay in advance, one restaurants charges $275 a person.

A few things that irk me. Prime in Huntington imposes their fee due to a 1% to 2% no show rate. At a rate like that, seems to be that this a solution without a problem.

At 2 Spring in Oyster Bay, they claim that for a recent Saturday night, they had 130 reservations but then had 90 cancellations and 10 no-shows which means that close to 77% of their reservations decided that they did not want to eat at their restaurant. Definitely a red flag but I have to wonder if the reservation fee solves their problem.

One of the restaurants justified their prepayment by comparing a reservation at their restaurant to a concert ticket that you buy on Ticketmaster or you should get travel insurance to deal with any issues like COVID. The problems with this response is first the arrogance of the person at Four in Oyster Bay because you are not a concert, your restaurant is serving a meal to customers. Second, if you have any issues going to a concert or a sporting event, you can always resell your tickets on one or more of the ticket sites. In fact, most sales on these sites are resales from people who purchased their tickets. I do not know of any resale site in which I can sell my seat to the Four Restaurant. So I call out Four for its arrogance.

As to the other restaurants with a reservation fee that needs to be canceled within 3 days, it seems like that is a long time to know whether you can make a dinner or not. Typically, you tend not to make a dinner if someone gets sick or there is an issue with a family member which precludes you from making dinner. Definitely creates a risk for the customer. While the risk may be small, is it worth it?

As to the people who make multiple reservation and then ghosts a restaurant, I do have sympathy for the restaurant. An intermediate step could be to make these people confirm the reservation the day before. That will make people think twice about their reservation.

My final thought on this reservation fee is if they want to charge me to ensure that I will show up then the restaurant itself has certain obligations. For example, Prime is notorious for making people wait before their table is ready. Probably to boost their bar sales. But if I am paying for a reservation fee, I damn sure want to be seated at my reservation time, not 15 or 20 minutes later. Will restaurants comply with their obligations or is this a one way street.

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