[CBS News] Making a restaurant reservation? That’ll be $100 — without food or drinks.
It’s become increasingly common for restaurants to charge customers‘ credit cards even before they step foot into an establishment, let alone order food or drinks.
Referred to as a “reservation fee” and applied at the time of booking, the charge ranges in amount but inevitably peeves diners who don’t want to be on the hook for what can add up to hundreds of dollars, if their dinner plans — for, say, a party of four — change at the last minute. But that is precisely why restaurants are increasingly implementing the fees.
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Safety net for restaurants
Restaurants famously struggled during the COVID-19 pandemic when restrictions were in place. As a result, more establishments have implemented measures designed to protect themselves against revenue loss.
“A lot of restaurants had issues with profitability, so they started thinking about implementing fees. A reservation fee is not to get more money out of diners, it’s a financial safety net to prevent revenue loss, or to reduce the number of no-shows,” said Apostolos Ampountolas, assistant professor of hospitality finance at Boston University School of Hospitality Administration.