‘It’s getting harder to absorb costs’

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This article was published 08/01/2024 (638 days ago), so information in it may no longer be current.

A restaurateur is considering implementing cancellation fees after 33 bookings cancelled Sunday.

It isn’t the most to happen in a single day, according to Ray Louie, general manager of The Gates on Roblin.

The record would be Dec. 9, when 55 people didn’t show up for their reservations. It was a 40 per cent drop from the day’s expected numbers, Louie stated.

He’s noticed an upward trend of cancellations over the past year, one that hit a pinnacle in December.

The 33 cancellations during The Gates’ first brunch of 2024 was “the final straw,” Louie said.

He posted on social media, asking followers what they thought of a cancellation policy. He received mixed reviews: some said it’s not unreasonable to charge a cancellation fee, others suggested scrapping reservations altogether.

Louie said he’s been mulling cancellation fees for a while but hasn’t been willing to use them.

“I just don’t want to offend the people that always show up,” he expressed. “(We’re) basically telling them we don’t trust them anymore.”

However, staff threw out roughly 20 per cent of the food they cooked Sunday — they couldn’t eat all the leftovers, Louie continued. The Gates doesn’t send servers home if there isn’t enough business; as a result, each employee earns less in tips.

In December, The Gates saw hundreds of people cancel, leading to less revenue than expected, Louie said. Illness is the main reason cited for cancelling.

Twenty-five of the 33 no-shows Sunday cancelled their reservation the morning of, Louie said.

“We sat here and listened to the calls… to cancel for tables that we were actually turning people away from,” he added.

If people had cancelled earlier, those tables would’ve been filled, he stated.

“We seem to always have been the forgiving industry. If you don’t show up, we take it on the chin and absorb the costs, but it’s getting harder to absorb costs.”– Ray Louie, general manager of The Gates on Roblin

“We seem to always have been the forgiving industry,” Louie relayed. “If you don’t show up, we take it on the chin and absorb the costs, but it’s getting harder to absorb costs.”

Both minimum wage and food costs have increased over the past year.

Louie expects to make a decision on cancellation fees in the coming weeks.

Such fees are common in flights, hotels and professional services, like chiropractic appointments. Cancellation fees in restaurants have made headlines in Vancouver, Ottawa and Edmonton in recent years.

Nearly one in 10 Canadians reported they hadn’t shown up to a reservation in the past year, OpenTable data from 2021 found.

“It’s very difficult for businesses to even contemplate (cancellation fees) when the nature of their business is to serve the client, meet their needs and have them leave… satisfied,” noted Loren Remillard, president of the Winnipeg Chamber of Commerce.

Cancellation fees might make customers more attentive and mindful of their bookings. They may also alienate a segment of the client base, Remillard stated.

Louie said he’s received feedback from people calling cancellation fees discriminatory and unfair.

The Winnipeg Chamber of Commerce charges a “nominal fee” for some of its tickets to ensure people come. It works, according to Remillard.

Some restaurants have opted for surge pricing, or charging more during peak hours, United States and British media outlets have reported.

It’s a different direction, Remillard highlighted.

Louie worries if he doesn’t take action, staff might search for jobs elsewhere, where they feel more taken care of.

He questions whether everyone calling in sick is actually ill.

gabrielle.piche@winnipegfreepress.com