Home / The cost of cancellations: how booking terms can safeguard restaurants
13th May 2025
Darcy MacMillan, Solicitor
In the ever-demanding hospitality industry, restaurants operate on tight margins and finely tuned schedules. Every table counts. So when a customer cancels a booking at the last minute—or doesn’t show up at all—the consequences can be significant. While one missed booking might seem trivial, the cumulative effect over time can severely impact a restaurant’s profitability and operational efficiency.
To combat this, more restaurants are turning to legally enforceable booking terms and conditions.
One of the most effective ways to protect your business is by implementing clear booking terms and conditions. These terms form a contractual relationship between the business and the customer at the time the reservation is made, outlining each party’s rights and responsibilities.
Restaurants and bars should have consideration to the following:
Requesting a deposit or card details upfront can deter casual cancellations and no-shows. A clearly communicated cancellation policy—such as forfeiting the deposit or paying a fee if the booking is cancelled within 24 or 48 hours—can help recover some of the potential losses.
Terms can specify how long a restaurant will hold a table after the reservation time (e.g., a 15-minute grace period). After this time, the table may be released to other customers, allowing restaurants to maximise capacity and reduce the impact of no-shows.
Terms can also regulate customer requests to alter the date, time, or party size. This allows restaurants to accept changes when feasible or decline them during busy periods, maintaining control over seating and staff allocation.
Requiring guests to disclose allergies or dietary requirements in advance allows for better planning and reduces risk. This is especially important for venues offering tasting menus or special event packages.
While booking terms offer essential protection, they must be carefully drafted to be legally enforceable. Under consumer protection laws, terms must be clear, fair, and communicated upfront—typically at the time the booking is made. Unfair or hidden fees may be challenged and could damage a restaurant’s reputation.
It’s also important that the terms reflect a genuine estimate of loss rather than a penalty. A cancellation fee should be proportionate to the revenue that would likely have been generated from the cancelled booking.
Booking terms and conditions are not just a formality—they’re a practical tool to support long-term sustainability in the restaurant sector. They promote customer accountability, enable better planning, and provide a legal foundation for recovering lost income.
For restaurants, particularly those in high-demand urban areas or offering fine dining experiences, establishing robust booking policies is essential.