Why cancelling your dinner reservation is hurting your favourite restaurant | Canada Voices

With dread, Denis Ganshonkov approached the tablet near the entrance of his restaurant, Stop, in Toronto’s west end.

There were 42 seats booked for the next night, a Friday, and the last time he checked, half a dozen cancellations had come in. This time, it was up to 17 cancellations, and there were still seven hours left for that tally to rise before would-be diners were charged a penalty for late notice.

It’s never been easier to book a table at a restaurant weeks in advance through platforms such as OpenTable and Resy, but it’s also never been easier to forget about those reservations or change your mind at the last minute, all without having to interact with a human who works at the establishment.

The Globe and Mail visited Ganshonkov’s restaurant on a Thursday before opening time to find out how the ease of cancellation makes it hard to plan his day-to-day operations such as ingredient ordering, food prep and staffing – adding extra unpredictability to an already challenging business model.

In recent years, no shows or late-in-the-game cancellations have become a plague in the restaurant industry. On average, a no-show table for two costs Canadian restaurants $91, according to a new report from the global booking platform OpenTable, a figure that can be significantly higher in cities such as Toronto or Vancouver or at fine dining establishments.

In a recent report, OpenTable, which manages millions of online reservations at Canadian restaurants daily, highlighted all the ways restaurants suffer when people bail on their reservations, with wasted food and stock, staff costs and turning away other bookings as the biggest impacts.

And the margins are tight: In a September survey by Restaurants Canada, a national, not-for-profit industry association, 41 per cent of restaurateurs said they are either breaking even or operating at a loss.

“It’s the only entertainment where, for whatever reason, you don’t pay upfront. All the other entertainment you pay and then go. You don’t pay after the concert,” Ganshonkov pointed out.

The guests who frustrate Ganshonkov the most are the repeat offenders: someone who will book and then cancel multiple times. After one guest did this 10 times, Ganshonkov e-mailed him and said he would no longer accept reservations from his e-mail address and if he wanted to eat at Stop, he was welcome only as a walk-in.

As a small, independently owned restaurant, there are no other pools of money to draw from to offset a bad night or a series of bad nights at Stop. “I don’t have a business partner, it’s literally just me,” he said.

Wednesday is the big prep day for the restaurant, where Ganshonkov and a cook will come in to get a head start before opening from Thursday to Monday. They’ll process ingredients, prepare stocks and bake cake layers. Most of this prep is based on reservations that are on the books, but lately, that’s been a poor predictor.

Stop serves dishes made primarily from locally sourced ingredients with a French and Eastern-European touch. The menu features a lot of fresh produce and fish, neither of which keep for long and are prepared the day-of for the most part. Ganshonkov places orders with optimism, but it often blows up in his face.

One week this summer, when cancellations were rampant, he called his seafood supplier asking if he could cancel his order of lobster and B.C. salmon, knowing he wouldn’t have enough guests to serve it all to. The supplier was able to find another buyer for the lobster, but couldn’t do the same for the salmon, which was $185 a fish, so Ganshonkov paid for it but didn’t take the product. The labour to clean it and the challenge of finding space to freeze it made it too much of a headache.

The average Canadian restaurant makes only a 4.1-per-cent pre-tax profit after paying all their expenses, according the recent Restaurants Canada survey. And owners report that those costs – including food, insurance, labour, and energy – have all risen significantly over the past few years.

In response to rampant last-minute cancellations, restaurants have started collecting credit-card information from guests at the time of booking and imposing fees if they cancel too close to the time of their reservation – usually within 12 or 24 hours. Others charge a deposit ahead of time.

It’s a practice OpenTable encourages. A global survey of restaurants using OpenTable found that requiring a deposit at the time of reservation was associated with a 60-per-cent reduction in no-shows.

But it’s an imperfect system. Every month, there are a handful of times when Ganshonkov tries to apply the $25-a-guest penalty on the Resy booking system for cancelling the reservation less than 24 hours before their booking and half those times, the charge is disputed. Sometimes people will use bogus names, e-mail addresses or phone numbers when making reservations so when their credit card gets charged, the credit-card company will side with the customer, saying the personal details don’t align with the cardholder’s information so the charge was invalid.

In his view, Resy doesn’t do enough to protect restaurants from non-committal diners. “They’re like, ‘No, no, no. This is between you and [the guest],’” Ganshonkov says.

Resy did not respond to a request for comment.

But Ganshonkov, like so many restaurant owners, feels like he’s stuck because it saves him more than $3,000 a month to use Resy compared to the old system of employing someone to answer the phone.

When someone calls the restaurant to cancel a reservation, Ganshonkov offers them the chance to rebook on another day instead, or to have that fee applied against their bill on another night when they’re able to make it in.

But even when he’s able to do this, he’s still left with an empty table that night. When he has enough of those, it means telling one of his front-of-house employees not to come in.

Sometimes that can backfire. Occasionally, Stop will get a lot of walk-ins that they don’t want to turn away, and suddenly the restaurant is full or close to it.

“If we don’t have enough staff on hand to provide the service that we want, that means our service suffers in the eyes of the customer,” Ganshonkov said. And on nights when service is lacking, he finds customers aren’t as likely to add drinks or dessert to their meal orders, meaning they bring in less on each table’s bill.

Things reached a nadir in the summer, when there were more cancellations than confirmations. On one night, he went from being almost fully booked to having half of those reservations cancel. When this became the new norm, staff came to expect they’d be working only every other day.

In the OpenTable survey, 34 per cent of restaurants said the prevalence of no-shows made it difficult to forecast staffing and 30 per cent said it had an impact on employee morale.

When restaurants reopened after COVID-19 lockdowns, Ganshonkov said it seemed like people were eager to support them. “A restaurant is so much more than just a place to eat and drink. It’s where you celebrate your special occasions, your Grandma’s 90th birthday.”

But he feels like restaurants are back to being taken for granted again. He believes the explosion of food content on social media has given a distorted sense that restaurants are thriving. The reality is that being featured on TikTok accounts with thousands of followers hasn’t necessarily translated into profitability for him.

With 4½ hours left till service, Ganshonkov shifted to prepping the honey cake for dessert. A month earlier, a chef in Toronto had recommended it in a story in a city paper, prompting a spike in interest in the dessert from diners. As he methodically rolled out several balls of dough into flat rounds, to be baked and then layered with a sour cream filling, Ganshonkov said he didn’t know if that glowing mention would still motivate people to come.

Would he sell the whole cake that night? Half of it? Less? It’s never been harder to predict.