A restaurant on Ulleungdo Island claims it suffered damages after a group reservation for 230 high school students was cancelled at the last minute, fueling debate as no-shows — when customers fail to appear without notice — become a persistent threat to small business owners.
According to a "Survey on No-Show Damages to Small Businesses" released by the Ministry of SMEs and Startups on Tuesday, 65% of small business owners in the restaurant industry have experienced no-show damages within the past three years.
Affected restaurants experienced an average of 8.6 no-show incidents over three years, with an average loss of 443,000 won per incident. Of the restaurants that suffered no-show damages, 35% had taken actual legal action, such as filing damage claims or lawsuits.
As damages grew more serious, the Fair Trade Commission (FTC) revised the Consumer Dispute Resolution Standards last December, raising cancellation fees to up to 40% of the total bill for reservation-based restaurants such as omakase and fine dining establishments and for group reservations, and up to 20% for general restaurants.
Amid this backdrop, a restaurant owner surnamed A on Ulleungdo Island claims that a breakfast reservation for a high school visiting group of 230 was unilaterally cancelled.
According to Yonhap News, A said, "A teacher and a travel agency representative made a reservation for 230 students during an on-site visit early last month, and I purchased ingredients based on the number of students." He added, "When the reservation date approached without any contact, I called them, and only then was I unilaterally notified of the cancellation."
He said he had to discard the ingredients prepared in advance, and that damages were substantial when combined with the roughly 100 other reservations he had turned away because of the 230-person booking.
In response, a travel agency representative explained, "As far as I know, the contracted Ulleung-area travel agency notified the restaurant of the cancellation before the reservation date."
Experts point out that in the case of group reservations, there is a possibility of it being recognized as obstruction of business, as such reservations prevent restaurants from accepting other customers.
However, there is still no legally binding cancellation fee regulation, meaning that unless operators notify customers of cancellation fee standards in advance, it is difficult to receive actual compensation.
