A no-show fee is a fee charged to a guest who doesn’t show up for their booking without cancelling or informing the property in advance. This fee helps to recoup lost revenue and discourage last minute cancellations or no-shows. The amount can vary but is usually one night’s stay at a hotel or the cost of a meal at a restaurant.
No-show fees are important to the hospitality industry because they protect the business from lost revenue from empty rooms or tables. When a guest doesn’t show up, the hotel or restaurant loses out on potential revenue that could have been made by selling that space to another guest. By charging no-show fees, the business can recoup some of that loss and encourage guests to honour their booking or cancel in time.
Let’s say you’re the manager of a busy fine dining restaurant. It’s a Saturday night and you have a waiting list of people waiting for a last minute table. A party of 6 has booked your best table for 8 PM but by 8:30 they haven’t arrived or called. You can’t seat other guests at this table because you’re holding it for the reservation. At 9 PM you decide to release the table and charge the no-show fee to the credit card provided during booking. This fee helps to recoup the lost revenue from drinks and meals the no-show party would have ordered and allows you to explain to your staff why their tips might be lower that night. The next time this party books, they’ll probably be more considerate about showing up or cancelling in advance.'