Paying for Prime-Time Tables, Genius or Insane?

It's Saturday night and you want to go out to dinner at a popular restaurant, but there's a problem: all the best restaurants are booked. You can either pick another venue or try your hand at a walk-in spot. But in all likely-hood, you'll just go somewhere else.

There's currently no way get a table at the last minute and that's a problem. You'll have to make other plans, and plan ahead for next time. More importantly, the restaurant is loosing money. Prime-time tables actually have monetary value. The exact amount is based very closely on supply and demand, but if you could pay a few bucks to get in, would you?

Restaurant tables are a perishable commodity. Almost any industry that deals perishable commodities has dynamic pricing. Plane tickets are more expensive during peak times, and increase in price the closer you get to the date of travel. So why have restaurants not adopted this trend?

I'm starting a business in Philadelphia called dish86 (http://www.dish86.com) that hopes to help solve this problem. We're currently in a beta, accepting members on an invitation basis, and want to get a sense of people's dining habits. If you have 2 minutes please fill out this anonymous survey:

http://dish86.wufoo.com/forms/dinner-dining-habits

We're really curious about why this problem hasn't already been solved, so any and all feedback is totally welcome. Looking forward to the discussion.

I definitely wouldn't pay for a last-minute prime-time table. I generally either make my reservations in advance, or know better than to try to walk into someplace hot & trendy without a reservation at 8pm on a Saturday. Besides, there are plenty of classics, old standbys & backup options in any major city.

avand wrote:Plane tickets are more expensive during peak times, and increase in price the closer you get to the date of travel. So why have restaurants not adopted this trend?

Airlines are also more hated by their customers now than ever before...they're the last industry I would hope others would emulate. Maybe restaurants should start charging extra for silverware & ice water next?

avand wrote:There's currently no way get a table at the last minute and that's a problem. You'll have to make other plans, and plan ahead for next time. More importantly, the restaurant is loosing money. Prime-time tables actually have monetary value.

This is a valid point. However, if restaurants did start emulating airlines by reserving their prime seats/times for those who are willing to pay extra for them, then I could see myself avoiding those places during those prime times, and probably feeling quite a bit of schadenfreude if I walked by & saw lots of open tables.

To the OP, someone already tried this in New York (I can't remember the name of the service but I think we discussed it here). I don't think it worked out.

For just me and my wife, or for dinner with a couple of in-town friends, I doubt I'd pay for a prime-time reservation, assuming there are plenty of free alternatives.

However in a "special occasion" scenario, be it a celebration, or people visiting from out-of-town who are interested in something specific, I could see paying some amount for a prime reservation. As it stands, I have never eaten at Topolobampo. Not because I wouldn't like to try it, but because I haven't planned to eat there far enough in advance, and when I do want to there are never reservations available. I doubt I'd pay to go there on a normal Saturday night, but if some Rick Bayless fans were visiting from out-of-town, I think we'd gladly pay 20 bucks for the right to get an 8PM reservation with less than a week's notice.

That said, I rarely have trouble getting reservations. If I want to eat somewhere, 99% of the time I can plan the meal far enough in advance to get the reservation I want. The issue only comes up with particularly popular restaurants and circumstances that don't allow me to plan far enough in advance. For the most part this is a solution in search of a problem, but there are 1-2 times a year where paying for a reservation would make my life easier.

avand wrote:So why have restaurants not adopted this trend?

They have, in the form of specials and discounts available only on less popular nights of the week.

Kennyz wrote:

avand wrote:So why have restaurants not adopted this trend?

They have, in the form of specials and discounts available only on less popular nights of the week.

And, of course, the discretely presented $20 bill.

In a city this size, there's always somewhere great to eat. I can't imagine ever paying simply for the priviledge of doing so.

=R=

I would see this used mostly by businesses that have clients come in that want to eat at a specific restaurant.

jesteinf wrote:To the OP, someone already tried this in New York (I can't remember the name of the service but I think we discussed it here). I don't think it worked out.

I believe that was TableXchange

Fujisan wrote:

jesteinf wrote:To the OP, someone already tried this in New York (I can't remember the name of the service but I think we discussed it here). I don't think it worked out.

I believe that was TableXchange

Yes, that's what I was thinking of. Previous discussion on LTH is here

Fujisan wrote:

jesteinf wrote:To the OP, someone already tried this in New York (I can't remember the name of the service but I think we discussed it here). I don't think it worked out.

I believe that was TableXchange

There's another service in New York by the name of Prime Time Tables that actually does the scalping side of things. They give diners a surname with which to claim a reservation at the restaurant and make it very clear to not mention Prime Time Tables at the restaurant.

That seems really shady and I think there's a way to do this with restaurant by in. You've got three categories of folks:

people that will do anything to get a table at the time they want (revenue captured)
people that will plan ahead to make a reservation (unaffected)
people that will reschedule (enjoy cash/experience incentives to keep prime time open for the first 2 categories)

It seems logical that a service could exist to help restaurants by managing and shifting these folks around to maximize revenue.

Khaopaat wrote:

avand wrote:There's currently no way get a table at the last minute and that's a problem. You'll have to make other plans, and plan ahead for next time. More importantly, the restaurant is loosing money. Prime-time tables actually have monetary value.

This is a valid point. However, if restaurants did start emulating airlines by reserving their prime seats/times for those who are willing to pay extra for them, then I could see myself avoiding those places during those prime times, and probably feeling quite a bit of schadenfreude if I walked by & saw lots of open tables.

If you do the math correctly you wouldn't ever be charged for a reservation unless there were no more tables left. This would involve some forecasting of supply and demand, and it might not always be right, but given that restaurants can already predict what their nights will look like with decent accuracy, forecasting could get really close. For example, you should be able to say on Monday morning that the even though it's not totally filled up now, Friday night will be completely booked and will turn away X customers. A percentage of that X is willing to pay more to go that night, and a percentage of those that made reservations probably would have rescheduled if given the right incentive (maybe a special drink, chef's tasting plate, wine-flight, etc.). In the new paradigm, restaurants just get more diners - I have to think that's motivation enough.

avand wrote:You've got three categories of folks:

people that will do anything to get a table at the time they want (revenue captured)
people that will plan ahead to make a reservation (unaffected)
people that will reschedule (enjoy cash/experience incentives to keep prime time open for the first 2 categories)

It seems logical that a service could exist to help restaurants by managing and shifting these folks around to maximize revenue.

But the key unanswered question is "how big is group number one, relative to the other two groups?"

I'm not sure I follow the logic that you present. How is selling prime-time slots akin to "managing and shifting" people around? You're not shifting anything, you're just charging one group.

I'd venture to guess that group #1 is very small. Most diners are like ronnie, in my opinion. If one restaurant is booked, they'll try one of the hundreds of others that they know. Revenue potential, to me, seems low.

Also, a lot of popular restaurants already hold some slots back during prime time for friends, VIPs, etc. I would imagine that holding even more back would introduce more risk for them. There is inherent value in having a full reservation book a week or two ahead of time: the restaurant can manage costs because they know exactly what to expect in terms of attendance.

Would the potential revenue gain outweigh the annoyance of having to sell a reservation as a product? If I owned a restaurant, I'd want to be in the business of filling tables as quickly and as frequently as possible and removing barriers to do so.

Yeah, I don't much move in the circles where greasing the maitre'd's palm is necessary* but I'd be surprised if you needed all ten of the late Arthur Petterino's fingers to count the restaurants in Chicago where this would matter. And I suspect the partners at Sidley who absolutely have to get a table at Gibson's on Friday night already have a system for doing so.

Maybe I'm wrong about the demand, but I just don't see a significant business opportunity here in Chicago. It seems to me that to the extent it exists, and isn't being met with a discreetly passed $20, it's being met in a different way by services like OpenTable, who take the demand for Blackbird when you can't get into it and spread it around to other comparable restaurants by showing availabilities, or by concierges, who know where to send people for a second choice (Mark Mendez told me Carnivale has long targeted this group, and makes sure to take care of the customers sent that way so the report comes back positive). That's a win-win for everybody, since patrons can find a worthy backup easily and restaurants are filling empty tables they already had, not that they're arbitrarily holding back. By contrast, a surcharge like you're talking about increases the restaurant's risk and increases the possibility of customer unhappiness in return for what, in the overall scheme of things, is not that much money-- a cocktail or two.

* Incidentally, my first landlord in Chicago was an old Filipino guy who'd been the maitre'd at a nightclub called the Blue Angel back in the 50s and 60s. Besides my building he and his wife owned the one on Lincoln that has the Apollo Theater in it. Those palmed $20s add up-- or at least they did back then.

eatchicago wrote:But the key unanswered question is "how big is group number one, relative to the other two groups?"

I don't think it needs to be significantly bigger. As far as capturing revenue, the restaurant is also willing to kick back some of their proceeds for tables on slower times - at least that's the feedback we've heard thus far.

eatchicago wrote:I'm not sure I follow the logic that you present. How is selling prime-time slots akin to "managing and shifting" people around? You're not shifting anything, you're just charging one group.

Basically, reservations at amazing restaurants during prime times are worth something. Why shouldn't they be reserved for customers that want them the most. Unlike TableXChange, it's not about scalping, in my mind, but about prioritization. It'd be a win, for example, if you could shift a diner from a prime time to an off time with a complimentary entree incentive. Maybe discouraging people from holding tables during prime times with a fee would work, too.

I think if restaurants saw that they sat more people over-all they'd buy in - I think.

avand wrote:

eatchicago wrote:But the key unanswered question is "how big is group number one, relative to the other two groups?"

I don't think it needs to be significantly bigger. As far as capturing revenue, the restaurant is also willing to kick back some of their proceeds for tables on slower times - at least that's the feedback we've heard thus far.

eatchicago wrote:I'm not sure I follow the logic that you present. How is selling prime-time slots akin to "managing and shifting" people around? You're not shifting anything, you're just charging one group.

Basically, reservations at amazing restaurants during prime times are worth something. Why shouldn't they be reserved for customers that want them the most. Unlike TableXChange, it's not about scalping, in my mind, but about prioritization. It'd be a win, for example, if you could shift a diner from a prime time to an off time with a complimentary entree incentive. Maybe discouraging people from holding tables during prime times with a fee would work, too.

I think if restaurants saw that they sat more people over-all they'd buy in - I think.

Yeah but you have to balance this against the restaurants ticking people off. Right now I can dine pretty much wherever I want whenever I want with a reasonable degree of planning ahead. If I got blocked out of eating at certain restaurants because I had to pay extra for reservations between, say, 7 and 9pm...then I'd be pretty ticked off at the restaurant. Comping me a dish for the privilege of eating there wouldn't win me over and I'd probably just avoid eating there altogether.

A better idea would be to find out what kind of wine the customer is planning to order, and give reservation priority based on that. For high end restaurants, there's way more money in that than in the few bucks extra someone might pay for a primetime reservation.

To be clear: I don't think my idea is a good one, just better than the one outlined in this thread.

the idea of this bothers me. is there any doubt that the high-paying last-minute reservers are going to be bumping regular-paying folks who planned well enough to make their reservations ahead of time?

I'm not anti-capitalist by any stretch of the imagination, but I like the idea that restaurants are a somewhat equal playing ground, for the most part. You call at the right time, you get the reservation. You don't plan ahead enough (or know someone), you don't.

So I wouldn't use such a service, on general principle. I'm also this way with regard to concerts; I hate the fact that all these ticket brokers and such block out the good seats to sell for many times "face value" while regular fans who buy tickets end up in the nosebleed seats.

elakin wrote:the idea of this bothers me. is there any doubt that the high-paying last-minute reservers are going to be bumping regular-paying folks who planned well enough to make their reservations ahead of time?

Exactly. People get pissed off when they get bumped off of flights by the airlines. Why on earth would a restaurant want to create this type of animosity among customers and potential customers?

A good piece of evidence that there is no such unfilled market in Chicago is the fact it is very rare to see discussions on LTHForum where someone says they had trouble finding a table at a particular restaurant. We talk about everything restaurant and food related here. But finding an open table at a great restaurant seems to be a non-issue here.

Hi,

In your business plan, how do you handle people who reserve and don't show. Especially those who habitually never show and love your service's convenience to place hold?

Regards,

jesteinf wrote:Yeah but you have to balance this against the restaurants ticking people off. Right now I can dine pretty much wherever I want whenever I want with a reasonable degree of planning ahead. If I got blocked out of eating at certain restaurants because I had to pay extra for reservations between, say, 7 and 9pm...then I'd be pretty ticked off at the restaurant. Comping me a dish for the privilege of eating there wouldn't win me over and I'd probably just avoid eating there altogether.

I agree - I would be upset as well if restaurants were simply charging for something that once was free. Anyone should still be able to make a reservation with enough heads up. But the fact remains that there are going to be people at the restaurant who would have taken a different time slot leaving a prime time spot open for someone who didn't plan ahead and was paying the price (literally). If you can forecast this behavior, I don't see why you'd upset anyone.

Cathy2 wrote:Hi,
In your business plan, how do you handle people who reserve and don't show. Especially those who habitually never show and love your service's convenience to place hold?

We make it clear that to be a member of our service you must make reservations on a regular basis and show up. The exact repercussions are not yet decided but are along the lines of account suspension.

I answered "Nothing" because I don't expect to need the premium time.
a) I tend to eat early in the evening -- a 5:30 dinner isn't a problem (partly because MrsF will encourage skipping lunch)
b) Prime weekend times are when I want to cook at home -- I'm not firing up the smoker on a Tuesday morning
c) I don't mind destination dining on a weeknight

So overall, if the next big thing is cheap on a Tuesday? I'll be there on a Tuesday.

from a diner's perspective, I feel the same way about this as I feel about Tivo; it kind of takes the fun out of it for me. I love when I happen upon a movie like Animal House or The Blues Brothers on cable. I end up watching the whole thing. But I would never record one of those movies or watch it "on demand".

I like spontaneity and serendipity. If I found myself with a free Saturday at the last minute, I'd call around until I found an open spot, or maybe plan on going someplace that doesn't take reservations or dining at the bar of one of the better restaurants. Having to work within those parameters would likely cause me to go someplace I might not otherwise have gone. I probably won't end up at the "hottest new place", but I'm ok with that, because I might discover something new and interesting.

From a restaurant-owner's perspective, I would never use this service, which seems to fly in the face of hospitality, as I understand it. People that plan ahead and make reservations shouldn't be bumped by high-paying last-minute plan-makers. That's just wrong.

elakin wrote:from a diner's perspective, I feel the same way about this as I feel about Tivo; it kind of takes the fun out of it for me. I love when I happen upon a movie like Animal House or The Blues Brothers on cable. I end up watching the whole thing. But I would never record one of those movies or watch it "on demand".

I COMPLETELY agree with this--and I thought I was the only one I once signed up for Netflix and am awfully embarassed to admit that I had my first (and only) two movies from them for 9 months and only watched one of the movies. On cable. Because it came on randomly.

And I agree with your sentiments regarding restaurants and spontanaeity as well! I make reservations when I'm going out with a group only--and that's usually the only time I go anywhere trendy that would necessitate reservations but due to the group thing, advance planning is almost always part of the process anyway. And if we can't get in to one, we're usually just as happy at the next. For my non-group dining outings, I go outside of prime time or to places that wouldn't require reservations.

I agree with whoever posted above that this seems designed for the heavy hitter, expense account, corporate wine and diner who probably has some type of concierge service at his/her beck and call to arrange such outings already.

All I know is if they bumped me to get that table, it wouldn't be pretty

I would bet that this is more of an issue (needing last minute resos at hot places) in cities like LA and NY where dining seems like a blood sport - everyone has to go to the new hot spot first, and seeing and being seen is more important than the meal.