Toronto restaurateur says last-minute cancellations are crippling his business

TORONTO · Denis Ganshonkov approached the tablet at his Toronto restaurant with dread one Thursday, finding 17 cancellations for the next night's service with hours still left for more to roll in. The owner of Stop, a small French and Eastern-European influenced restaurant in the city's west end, says the ease of cancelling reservations online has become a plague on his business. On average, a no-show table for two costs Canadian restaurants $91, according to a new report from the global booking platform OpenTable. Ganshonkov says the constant last-minute changes make it impossible to plan food orders, preparation and staffing, adding extra unpredictability to an already challenging industry.

"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 said. He is most frustrated by repeat offenders, having once banned a guest who booked and cancelled 10 times. As a sole proprietor with no business partner, Ganshonkov said there are no other pools of money to draw from to offset a bad night. The average Canadian restaurant makes only a 4.1 percent pre-tax profit after expenses, according to a September survey by Restaurants Canada, which found 41 percent of restaurateurs are either breaking even or operating at a loss.

OpenTable, which manages millions of online reservations at Canadian restaurants daily, highlighted wasted food and stock, staff costs and turning away other bookings as the biggest impacts of no-shows. In response, many restaurants now collect credit card information and impose fees for cancellations within 12 or 24 hours. OpenTable found requiring a deposit was associated with a 60 percent reduction in no-shows. Ganshonkov charges a $25-per-guest penalty for cancellations less than 24 hours in advance through the Resy booking system, but he says half the time the charge is disputed.

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"They're like, 'No, no, no. This is between you and [the guest],'" Ganshonkov said of Resy, which did not respond to a request for comment. He said people sometimes use bogus details when booking, so credit card companies side with the customer when the charge is contested. Despite this, Ganshonkov feels stuck with the system because it saves him more than $3,000 a month compared to employing someone to answer the phone. When someone calls to cancel, he offers to rebook them or apply the fee to a future visit, but he is still left with an empty table that night.

The labour-intensive prep for his menu, which features fresh local produce and fish, is based on reservations, but Ganshonkov said that has become a poor predictor. One week this summer, amid rampant cancellations, he had to call his seafood supplier to try to cancel an order. The supplier found another buyer for lobster but not for B.C. salmon, which cost $185 per fish. Ganshonkov paid for the salmon but did not take the product, as the labour to clean it and the challenge of freezing it were too much. When cancellations pile up, he must tell a front-of-house employee not to come in, which can backfire if there is a surge of walk-in customers.

"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. He finds that on nights when service is lacking, customers are less likely to order drinks or dessert, reducing the revenue from each table. The problem reached a nadir this summer when cancellations outnumbered confirmations. On one night, he went from almost fully booked to having half those reservations cancel. Staff came to expect they would work only every other day. In the OpenTable survey, 34 percent of restaurants said no-shows made it difficult to forecast staffing and 30 percent said it hurt employee morale.

With files from The Globe and Mail