Reservation Scalping Comes to Chicago

This made some waves when it started in NYC, and now it has apparently made its way to Chicago.

From the Chicago Tribune

Trying to score a last-minute table at a hot restaurant? It can go like this: Place large bill in sweaty palm. Ask to speak to manager. Shake manager's hand while passing on the money and a desperate request for a table. Hope for the best.

Gabriel Erbst wanted to change that, so he co-founded a new-to-Chicago Web site that allows people to buy and sell reservations. "That whole thing was so sketchy," he said. "We just wanted to make it legitimate."

The free market at work, or unfair to the common man?

I think I agree with Rich Melman on this one

"Let's say I go to New York and forgot to book a reservation at Jean Georges in advance," Melman said. "I wouldn't mind paying $25 to get in. I guess we'll have to wait and see on this one."

On a selfish level, I love it. In a vacuum, if we're talking fine dining, I'd happily pay $25 to know that I'm going to get a reservation on the night I want at a good time without a hassle.

But that's vastly outweighed by the fact that I just find the practice sleazy, and the potential macro implications for the future give me the chills. I just don't see any good coming out of it, and anybody who thinks otherwise should try getting a decent seat at a Cubs game.

For me, it falls under the category of "things I wish would just go away but almost assuredly won't".

Dmnkly wrote:But that's vastly outweighed by the fact that I just find the practice sleazy, and the potential macro implications for the future give me the chills. I just don't see any good coming out of it, and anybody who thinks otherwise should try getting a decent seat at a Cubs game.

For me, it falls under the category of "things I wish would just go away but almost assuredly won't".

I dunno. I wonder if it will be successful here. The practice of bribing maitre d's to get into a restaurant is not at all common in Chicago. It seems to me that some years ago some reporter or other tried it and was unsuccessful in most cases. The bribe was refused with varying levels of indignation. IIRC it worked sometimes to get a better table, but not to get into full-up restaurants.

It made me proud of our city and also amused -- you could bribe your way out of a speeding ticket or into a commercial driver's license but not past a line of waiting restaurant patrons.

I'd hate to think things have changed that much.

For that matter, how many restaurants in Chicago are there where you can't normally get a reservation with just a few days' notice, anyway?

LAZ wrote:

Dmnkly wrote:But that's vastly outweighed by the fact that I just find the practice sleazy, and the potential macro implications for the future give me the chills. I just don't see any good coming out of it, and anybody who thinks otherwise should try getting a decent seat at a Cubs game.

For me, it falls under the category of "things I wish would just go away but almost assuredly won't".

I dunno. I wonder if it will be successful here. The practice of bribing maitre d's to get into a restaurant is not at all common in Chicago. It seems to me that some years ago some reporter or other tried it and was unsuccessful in most cases. The bribe was refused with varying levels of indignation. IIRC it worked sometimes to get a better table, but not to get into full-up restaurants.

That's interesting (and heartening), but I don't see how it's especially relevant. In that situation, it's the restaurants themselves eschewing a practice that's carried out in person. Here, you're talking about the public -- and not even those living in Chicago, necessarily!-- participating in a practice that they can conduct anonymously on a computer. You're comparing two groups with very different interests participating in practices with very different social dynamics. As long as there are buyers out there, some guy in Phoenix (or any other city) with a computer and unlimited cell phone minutes doesn't care about what's considered socially appropriate in the Chicago dining scene.

LAZ wrote:For that matter, how many restaurants in Chicago are there where you can't normally get a reservation with just a few days' notice, anyway?

I think you have it backwards. I think this is actually less of a concern for those few restaurants that are always booked solid. Provided you're calling when reservations open, it's just as difficult for the scalpers to get those reservations as it is for everybody else. What concerns me is the prospect of scalpers taking restaurants that usually have availability and creating scarcity. If two minutes worth of phone call and internet posting can net you $25 and you don't even need to live in Chicago, you can bet there will be plenty of people out there willing to try to turn a buck. More people trying to make money off reservations = fewer reservations for those who actually want to use them = more people willing to pay because it's harder to get reservations = more people trying to make money off reservations. That's what's so insidious about this "service" -- it creates its own demand. And unlike, say, sporting events, where the risk of getting stuck with unsold tickets deters casual scalpers and those without sizable bankrolls, in this scenario there's absolutely no risk other than a modest amount of time and no reason for scalpers not to book as many reservations as they can get their hands on. All it would take is a couple dozen people with nothing more than a phone, a net connection and some free time to put a serious dent in the number of available reservations at the city's top restaurants. Tomorrow, I could take an hour, book a few prime tables at every restaurant on their list, put them up for sale, and if only two of them are sold, hey, I just made $50 for an hour's worth of work. What's to stop me, other than the fact that I abhor the practice? The only impediment I can see is if people simply aren't willing to pay for a reservation, or if enough of a social stigma is attached to the practice that people -- even privately -- aren't willing to participate. The fact that the site is expanding would seem to indicate neither has been a significant problem thus far. Has anything been written about how this has (or has not) affected reservation availability in New York?

This is all (hopefully intelligent) speculation, of course, but it's a very scary prospect to me. And as scary as it is to me, I'd think it has to be doubly so for the restaurants. The website says it requires its sellers to cancel unsold reservations 90 minutes prior, but I can't think of any motivation for them to police that policy nor can I imagine the means by which they'd do so, so who knows if they even bother? I have to believe that unsold reservations, in most cases, will translate into empty tables, especially in high-end restaurants that don't typically attract walk-in traffic. Some diners will simply end up with less desirable times, of course, but others either won't go or will go elsewhere. And again, unlike ticketed events where the face price is paid no matter who ends up with the ticket, a diner turned away is straight-up lost revenue. Which leads me to believe -- if this gains any traction -- that we'll see more restaurants taking credit cards with reservations and substantially increasing the amount of notice required for a penalty-free cancellation (or maybe requiring that the same card used to make the reservation be used for dinner!), and other restaurants eliminating reservations altogether. It seems to me that restaurants will either have to accept losing tables, or engage in some rather unfriendly policies as a result. More work for them, and either a pain in the ass or added cost for us.

The only positive aspect of this I can foresee, unless you're the one doing the scalping of course, is that it might mean you'd have a good chance of simply walking into a high-end place on a Friday night and snapping up a late cancellation or a no show. But that means you're either doing spur-of-the-moment fine dining, or getting all dressed up and driving across town, having no idea if you'll simply be turning around to come right back home. But personally speaking, I don't find either prospect particularly attractive.

Dmnkly wrote:Which leads me to believe -- if this gains any traction -- that we'll see more restaurants taking credit cards with reservations and substantially increasing the amount of notice required for a penalty-free cancellation (or maybe requiring that the same card used to make the reservation be used for dinner!), and other restaurants eliminating reservations altogether.

Yup. I don't see a good reason not to ask that the card either be the same or match the name on the card. That costs no one a dime. (Indeed, if one were so minded, one could allow the differently named diners to proceed, albeit with a penalty for buying the reservation--a thought I find intriguing rather than offensive.) What worries me is that it may take a while for some places to see how this ultimately hurts them. GEB's "endorsement" of the practice (in the article) strikes me as either short-sighted and/or as failing to understand how this can negatively affect him in the long run. Unlike Dom, I will not pay for the "privilege" of securing a specific time-spot. If I can't call and get a reservation (acknowledging that at certain places that will require some pretty advanced timing), then I'll go somewhere else. And I don't expect that I'm alone.

Gypsy Boy wrote:Unlike Dom, I will not pay for the "privilege" of securing a specific time-spot. If I can't call and get a reservation (acknowledging that at certain places that will require some pretty advanced timing), then I'll go somewhere else. And I don't expect that I'm alone.

Whoa, I absoulutely wouldn't either -- there's no way I'm supporting this from either end. I just meant that were it not for the myriad of problems I see with the practice, I'd rather pay $20 to get into Per Se on the date and time of my choosing than play the phone game for a few days in a row, sit on hold for 20 minutes and eat at 5:30. And if -- purely from a monetary standpoint and divorced from the other problems -- that's a tradeoff I'd be willing to make, I'm sure there are plenty of others who feel the same way and don't share my other ethical and practical objections. People will buy reservations, but I definitely won't be among them.

I wish there was a way this could be done and not taken advantage of: people cancelling have got to be hurting restaurants, especially small ones. If people are lining up to get in, a clearinghouse for cancelled reservations with a notification service would be a good thing; I suppose Opentable does something like this already?

I'm the type who would rather look at 6 restaurants on the night I go out to eat and find one with a last-minute spot than plan months in advance (but who doesn't want to wait in line outside a restaurant if I can help it.) If it worked this way, ithe folks who had to cancel lose nothing, the restaurant loses nothing, and the procrastinator wins.

I agree, though, the potential for abuse with this system is huge.

Dmnkly wrote:

Gypsy Boy wrote:Unlike Dom, I will not pay for the "privilege" of securing a specific time-spot. If I can't call and get a reservation (acknowledging that at certain places that will require some pretty advanced timing), then I'll go somewhere else. And I don't expect that I'm alone.

Whoa, I absoulutely wouldn't either -- there's no way I'm supporting this from either end.

Well, I don't think I took you entirely ( ) out of context. You did say originally, and seem to say again, that you're willing to pay to go where you want when you want...under certain conditions. My point was only that I'm not willing, period. I'll sit on the phone for a while and eventually I'll just move on to another restaurant. There isn't a place in Chicago (or likely anywhere else) that I'm so dying to get into that I'll pay for the reservation under any circumstances.

Mhays wrote:I wish there was a way this could be done and not taken advantage of: people cancelling have got to be hurting restaurants, especially small ones. If people are lining up to get in, a clearinghouse for cancelled reservations with a notification service would be a good thing; I suppose Opentable does something like this already?

I'm the type who would rather look at 6 restaurants on the night I go out to eat and find one with a last-minute spot than plan months in advance (but who doesn't want to wait in line outside a restaurant if I can help it.) If it worked this way, ithe folks who had to cancel lose nothing, the restaurant loses nothing, and the procrastinator wins.

I agree, though, the potential for abuse with this system is huge.

A lot of cancellations do hurt, but it also means you can take more walk-ins.

Gypsy Boy wrote:Unlike Dom, I will not pay for the "privilege" of securing a specific time-spot. If I can't call and get a reservation (acknowledging that at certain places that will require some pretty advanced timing), then I'll go somewhere else. And I don't expect that I'm alone.

It doesn't matter to the restaurant if you are alone or not. If you make your moral stand and not participate and someone else takes the reservation, it's no loss to the restaurant, since they are booked solid anyway. Having said that, I'm not too keen on the concept. I prefer to do my duking in person mano a mano (or, more usually, to make reservations ahead of time).

Dmnkly wrote:What concerns me is the prospect of scalpers taking restaurants that usually have availability and creating scarcity.

I agree. This is the insidious part. It will lead to more hassle for consumers and accelerate the tightening of reservation policies (deposits and stricter rules about cancellation) when the market in Chicago has otherwise not apparently needed that.

I don't very frequently dine at places that take reservations, but this seems like a sad case of a few people's greed making things unduly annoying for regular folks.

stevez wrote:

Gypsy Boy wrote:Unlike Dom, I will not pay for the "privilege" of securing a specific time-spot. If I can't call and get a reservation (acknowledging that at certain places that will require some pretty advanced timing), then I'll go somewhere else. And I don't expect that I'm alone.

It doesn't matter to the restaurant if you are alone or not. If you make your moral stand and not participate and someone else takes the reservation, it's no loss to the restaurant

Right, but it will matter to the restaurant if enough people are like Gypsy Boy and refuse to pay for reservations, and then the restaurant finds itself with empty tables because the reservation-holders (who hoped to sell their reservations and didn't) fail to cancel, or cancel so late that tables are unfillable on such short notice.

So an I-won't-pay protest can have an effect; by causing restaurants to suffer a glut of unfilled tables from uncancelled scalper reservations, the protest will drive restaurants to figure out how to do something about the scalpers.

Certainly if Gypsy Boy is alone in this, his protest won't amount to a hill of beans. But if he isn't alone, it might amount to something. Ipso facto (and e pluribus unum), it does matter to restaurants whether he is alone or not.

riddlemay wrote:Certainly if Gypsy Boy is alone in this, his protest won't amount to a hill of beans. But if he isn't alone, it might amount to something. Ipso facto (and e pluribus unum), it does matter to restaurants whether he is alone or not.

That is correct. It's basic free market economy at work. The practice of scalping reservations is self policing. If there is no demand, it will die a well deserved death. The market will dictate.

I think this thing has had a much bigger impact on LTHForum conversations than it will have on the Chicago restaurant scene. Do people seriously believe that restaurants which are currently easy to get into are suddenly going to have Schwa-like inpenetrability because of this kid's website? Given the struggles restaurants have been having these days, I suppose one can dream. IMO, this deserves a big "who cares?"

Kennyz wrote:IMO, this deserves a big "who cares?"

From your mouth to the God of Restaurant Dining's ears, but the thing that makes it foreboding is...well, look around Wrigley Field next time you're there, and ask yourself what percentage of seatholders you figure got in by paying face value for a ticket. Half of them, at most?

riddlemay wrote:

Kennyz wrote:IMO, this deserves a big "who cares?"

From your mouth to the God of Restaurant Dining's ears, but the thing that makes it foreboding is...well, look around Wrigley Field next time you're there, and ask yourself what percentage of seatholders you figure got in by paying face value for a ticket. Half of them, at most?

But if the Wrigley scalpers open an office in Arlington, should Rangers fans really have reason to worry?

Kennyz wrote:

riddlemay wrote:

Kennyz wrote:IMO, this deserves a big "who cares?"

From your mouth to the God of Restaurant Dining's ears, but the thing that makes it foreboding is...well, look around Wrigley Field next time you're there, and ask yourself what percentage of seatholders you figure got in by paying face value for a ticket. Half of them, at most?

But if the Wrigley scalpers open an office in Arlington, should Rangers fans really have reason to worry?

If the Wrigley scalpers could snap up all of the Rangers Ballpark tickets without having to spend a cent, absolutely.

OK, I guess my regular Friday night dinner at Salam is about to get $40 more expensive. Do you think they'll start clogging up delivieries from Sticky Rice too? I suppose they could call for 3 separate deliveries at 7PM on Tuesday night, then charge people who want to use one of the slots. What if they send employees to stand in line at all the the grocery store checkout counters and charge us for a spot in queue? How will we ever eat again in this town?

Kennyz wrote:OK, I guess my regular Friday night dinner at Salam is about to get $40 more expensive. Do you think they'll start clogging up delivieries from Sticky Rice too? I suppose they could call for 3 separate deliveries at 7PM on Tuesday night, then charge people who want to use one of the slots. What if they send employees to stand in line at all the the grocery store checkout counters and charge us for a spot in queue? How will we ever eat again in this town?

First off Kenny, it appears you don't understand how the site actually works. This is NOT the same as a traditional ticket scalper. There aren't a dozen guys renting office space somewhere scalping reservations. It's a website that allows anybody anywhere to scalp reservations they've made in the cities and at the restaurants the site services. If you want to draw the comparison, a more apt one would be to compare it with Stub Hub, except that -- as mentioned -- there's no risk on the part of the scalpers. They're anybody anywhere who feels the potential return on scalping a reservation ($5-$40) is worth the time it takes them to make and post it (2-3 minutes? Less?). Assume 5 minutes (which I think is generous) to make a reservation and an average sale price of $15. If they only sell one out of every ten they make, that works out to $18/hour while working from home, tax free and with no overhead other than the internet connection and cell phone minutes they probably already have. Of course there are only so many reservations one person can make, but that's still a better return on your time -- even if it's a small amount of time -- than working in most retail or food service environments. And if you can sell two or three out of every ten, then you're talking about a pretty damn good wage.

And yes, this is all speculation and we'll have to see what happens. But is it so ridiculous to think that out of all of the opportunists on the internet, all of the wage workers with internet access, all the students looking to pick up a little extra easy cash, there won't be a bunch that think it's worth their time to try to book as many reservations as they can and make some free money with no risk? And if so, is that thought so ridiculous that mocking it with hyperbole and straw men that have nothing to do with the subject is appropriate? It remains to be seen if the demand will be there and if the restaurants will come up with some effective deterrents if it does become a problem, but is it so silly to think people will try?

Dom,

The ticket scalper example was not mine - I just responded to riddlemay's use of that analogy. Then you yourself furthered the analogy in response to my post.

I do understand how the site portends to works. Whatever stir it might have caused when it launched in NY, none of my friends or family living there have seen the slightest impact on their ability to dine out. Let's make a deal: If I'm wrong and this ends up shattering our local dining scene, you can have my December, 2010 reservation at Honey 1. Just send me a check for $35.

Kenny

Kennyz wrote:Let's make a deal: If I'm wrong and this ends up shattering our local dining scene, you can have my December, 2010 reservation at Honey 1. Just send me a check for $35.

If the practice catches on, it just might take that long to develop to the point where it's a problem. But it's worth noting that, already, anybody looking for a table for 2 at Topolobampo or North Pond next Friday or Spiaggia next Saturday is being shut out because the last available tables are currently held by squatters trying to sell them. That is, indeed, a long way from "shattering our local dining scene", but it ain't a bad start for a site that just launched in Chicago and is only accepting reservations for 22 restaurants so far.

In any case, maybe it's just bluster, but apparently some of the restaurants listed in New York are considering taking actual deposits as a countermeasure. Whether the scope of the problem is real or imagined (there appears to be some debate), those would be some very real effects.

http://www.nytimes.com/2008/03/12/dining/12reserve.html

The site's creators themselves seem to imply that the only thing keeping it from being a large-scale phenomenon are the limits they put on the number of reservations they will post -- limits they could lift at any time if they felt it would be to their advantage.

I think dom is right on the money on this and has summarized the extreme downside of a so-called "service" like this, which serves no one's interest other than the "scalper"
and the elite diner willing to pay a premium, usually on the top of a high-cost meal, for the pleasure of dining where and when he/she pleases (and often not a local who is usually flexible and can negotiate a date for dining at a select restaurant). I suppose if the site were self-policed to focus on that elite dinner and the trendiest restaurants it might serve a function, but internet entrepreneurs are not known for self-policing or ethical practices (think "spam"). It certainly doesn't serve the interest of most restauranteurs ( a pretty tough business to begin with), except for those very successful ones who can on occasion now fill in last-minute cancellations. Think, in particular, of the independent chef who goes to the market Friday morning thinking he has a booked-up weekend, and then faces a half-empty house as a scalper who has failed to sell his places cancels one cover after the next at the last minute (or not at all).
It's the kind of site that I would make a personal point of never using.

My original thought on why this might not be successful is that I don't see there will be all that many Chicago diners willing to pay a premium for reservations. Like Mhays, my inclination if I can't get a reservation when I want one is to go somewhere else. I can't see any circumstances in which I'd be willing to pay for a reservation.

Restaurateurs have means of fighting back, if they want to. I hope they do.

But Alinea co-owner Nick Kokonas already did this week. Through Google Alert—which tells him every time "Alinea" appears on the Internet—he learned that a reservation for the restaurant was being sold for $40 on the site. He pinpointed the original customer and told him if it wasn't removed from TableXchange, Alinea would cancel the reservation.

The Melman quotation in the OP was interesting, since for years most Lettuce restaurants either didn't take reservations at all, or took only limited reservations, which is another way restaurants can foil this site.

Restaurants could also set up their own reservations systems and work with OpenTable, etc., to accept reservations only from registered users. They could announce a policy that unless one of the diners in the party who arrives to fill a reservation can present ID in the name on the reservation, they will add a "reservation transfer charge" to the bill.

A less overt means would be to make a point of having the staff address people who arrive with reservations by name throughout the meal. This is a good practice anyway, because it makes most customers feel a little bit important. The most blatant wouldn't be cowed, but I think it would make many people uncomfortable to be addressed over and over again by a name not their own. You wouldn't want that to happen at, say, a business dinner or on a date. And it might make you cringe a bit when you presented your credit card with a different name on it. Dining out is a much less anonymous occasion than sitting at a ballgame.

I hope this site has little impact, but if it does, I hope restaurants will look beyond the credit-card deposit for other means of fighting back.

I could see it working if people came just to eat at a particular location. I'd pay $40 to get a French Laundry or El Bulli reservation for a particular date (having tried and failed to get reservations for when I have had a trip planned to Napa a few times) and maybe people would to get one at Alinea, Schwa, Babbo or Per Se, etc. But otherwise, there are enough good places in this world and I can plan far enough in advance, that my life won't end if I can't get a reservation TODAY at the harder-to-get tables.

leek wrote:I could see it working if people came just to eat at a particular location. I'd pay $40 to get a French Laundry or El Bulli reservation for a particular date (having tried and failed to get reservations for when I have had a trip planned to Napa a few times) and maybe people would to get one at Alinea, Schwa, Babbo or Per Se, etc.

Ironically, the reason I fear this scourge becoming a success is that I can actually see myself being a customer of it! (In the same circumstances you describe.) If, for instance, my niece Nomi were coming into town for one night and I wanted to take her to Nomi (for obvious reasons) and the only way was by paying a scalper, I would do it, no question.

So if I would, other people would. Which would suck.

I've got the same ambivalence about event tickets. Upthread a few posts I bemoaned the fact that half of Wrigley Field got in there on "secondary market" tickets. Well, guess what? I'm part of that half. Only once in the last five years have I gone on a face-value ticket bought at the ticket window. I'm part of the problem. And I'm going to continue to be. Which is how I know there's a problem.

This is an outrage!

Why wouldn't a restaurant that consistently fills prime timeslots just refuse to take anything but "paid" reservations for those prime slots. It's extra money in their pockets.

I will boycott any and all restaurants if this becomes a standard practice. **** them. Eating out is expensive enough, especially at top tier places and now they will want an extra $25 bucks?

NO WAY!!

hoppy2468 wrote:This is an outrage!

Why wouldn't a restaurant that consistently fills prime timeslots just refuse to take anything but "paid" reservations for those prime slots. It's extra money in their pockets.

I will boycott any and all restaurants if this becomes a standard practice. **** them. Eating out is expensive enough, especially at top tier places and now they will want an extra $25 bucks?

NO WAY!!

Um... Hoppy... you should probably reread the thread and the article. It appears you have a fundamental misunderstanding of how this works. The restaurants have nothing to do with it.

Menupages has an interesting note from one of the partners at Alinea available here.

The gist (or jist? sorry, off-topic...) is that at a place like Alinea, they take very seriously dietary requests and needs, and tend to have a wait-list for a given night anyway. It's not fair in the least, so they say, to let someone swoop in with a scalped reservation when there were others on the waitlist. As for the point about dietary restrictions, I'm a little less swayed. Say I'm selling the reservation and I've already told Alinea that I have a shellfish allergy. If my reservation-buyer cares about that, or doesn't think to ask -- or if I knowingly withold it -- then the fault is on us and not the restaurant (buyer beware, etc.). Just the same, I'm sure no restaurant wants to see any diner, no matter how the reservation was obtained, have a negative experience.

Still, along the lines of what Riddlemay has said, people will use this system, just like others use ticket brokers. I know that were it not for ticket brokers, I would not have been able to see Radiohead at the Auditorium Theatre a few years back. Was it worth the extra expense? Absolutely. For some, eating at Alinea or any other number of places will be worth the extra cost, too.

Glad -- and not surprised -- to see these comments from Nick. An establishment like Alinea isn't about to let some opportunistic, punk-ass bitches interfere with their business. I hope more restaurants will join Alinea in flushing out this sort of activity and working to prevent and eliminate it.

=R=

I completely agree with Dmnkly on all points...

I know some of you would gladly pay $XX for a reservation at a hard-to-get-into place at a particular time, but say the reservation scalper has 5 reservations held under different fake names at that restaurant and has only sold one. the scalper has no incentive nor obligation to cancel the remaining reservations, even if the restaurant does require a credit card for the reservation. I know for fact that sometimes the restaurant management won't charge for those no-shows (despite policy to the contrary), and even if it does, I also know for fact that if this type of charge is disputed with a credit card company, the cc company in most cases sides with the card holder, not the restaurant. The restaurants are the ultimate losers here, with the people who truly want reservations but can't get them being a close second.

This is a terrible venture and should absolutely not be supported by anyone.