Restaurant Ticketing Systems

[gfron1]

HERE is an article in the Washington Post about Pineapple and Pearls.

 

Specifically I want to highlight this section:

Quote

 

At Pineapple and Pearls, Silverman says there will be no sticker shock. A $250 dinner will cost $250. When diners make a reservation, they will pay half upfront and will be billed the other half automatically on the day of their reservation. If they cancel 72 hours in advance of their reservation, diners will be refunded their initial payment.

Tickets go on sale at 10 a.m. March 14 on the Pineapple and Pearls website for dinner services starting on April 7. (Reservations will be released every Monday for dates a month out.) Customers will be able to select between the eight-seat chef's counter or the 22-seat dining room via a reservation system custom-built by GiftRocker; the seven-seat bar will eventually be added to the system. (In February, Silverman opened a coffee shop of the same name, located in front of his fine-dining operation.)

 

I"m bringing it up because in planning my new place I was intending to do something very similar. I know its not for everyone, so the "I would never go to a place like this" isn't of concern to me. Its the question of how do folks feel about pre-paying in general. In my case, using preliminary numbers, I'm looking at much much less (maybe $75 for the meal, $40 for booze so a total around $115 plus tax & tip), with wine being optional, but still with a half down, half at cancellation cutoff. I'm also mulling over the folks who say that they should determine the tip...but generally at places like this that aren't packing the house, you're all but guaranteed appropriate service, and if its all lumped into one number then its a mystery amount. 

 

ETA: To my way of thinking this is specific to special occasion restaurants, not your every day place, not even the fine casual.

I'll shut up and listen/read because I know many of you are passionate on both sides of this discussion. All for the greater good amigos!

Edited March 9, 2016 by gfron1 (log)

[Alex]

Are you still looking at St. Louis or environs? If so, do you think a system like this would fly there?

[gfron1]

That is the million dollar question in my mind. However...no answer.

[pastrygirl]

I don't know a thing about St Louis and have never used such a system but am not opposed to it.  I support having service included so you can pay cooks appropriately.  A meal like that demands skilled service but is more about the food.  There have been several reports of Seattle restaurants opening with or switching to a service charge.  I think its a step in the right direction.

[JoNorvelleWalker]

I seldom eat out but this seems like a very fair and reasonable solution.

[hathor]

I wonder if people would be more receptive after they've been there once? I think my hesitation would be if I've never been to the restaurant, would

I want to prepay? Unless, of course, the press was off the hook! Maybe add the pre-pay as an option with a little 'discount' for regulars? Would a membership club idea appeal? 

 

I'd also prefer to have the tip included. Leave all the booze/wine optional. Make it as no brainless as possible. You can figure out how to get tips added onto the booze part... 

 

[gfron1]

Thats a great idea @hathor to encourage use of the system with a discount. The goal that I, and assume most, have is to minimize cancellations and to know how many people are going to fill the seats.

[huiray]

This system has been in use for YEARS. Next Restaurant, Alinea, various places in San Francisco and other places in Chicago and elsewhere have all adopted it at one time or another and many have continued it. Certainly Achatz's (and Kokonas's) restaurants use it as their operating principle.

[blue_dolphin]

6 minutes ago, huiray said:

This system has been in use for YEARS. Next Restaurant, Alinea, various places in San Francisco and other places in Chicago and elsewhere have all adopted it at one time or another and many have continued it. Certainly Achatz's (and Kokonas's) restaurants use it as their operating principle.

 

I think the key to success with that sort of policy is sufficient demand, which the referenced restaurants have in spades. I think it's also important to differentiate between the policy and the specific system that's used to implement it.  Depending on the chosen system, it could be a barrier to folks who are less tech-savvy, particularly for a newer, lesser known restaurant.  It would be important that the system worked smoothly as I'd be entirely frosted if my card was charged for the deposit but the restaurant couldn't find it on their side of the system.  Also, if I knew a restaurant was using this sort of ticketed dining, I would assume that walk-ins or close-in reservations were unavailable so it could cut into that side of the business.  

 

I've visited a number of restaurants that require a deposit for reservations with close-in cancellation/refund restrictions so a ticketed dining policy (which I see as a step beyond the deposit system) would not deter me from visiting a special occasion restaurant with a friend or two.  It would be lovely have the service charge included so the meal ends on a note that doesn't require arithmetic, signatures and deciphering small slips of paper in the dark.

 

While I have no concerns with a $50 deposit, it would give me pause to put a reservation at Pineapple and Pearls on my credit card for a larger group, knowing that I could be on the line for a $250-500 charge if 2 of my party of 6 had to cancel inside of that 72-hour deadline.  It's one thing that I'm comfortable with the policy and system like but I don't really want the responsibility of educating my friends to the ins and outs of it. 

 

 

 

 

[huiray]

BTW, to the OP – be aware of the specific State regulations of wherever your restaurant will be located. If you designate your "tip" as "service charge" it may matter where on the accounting side it is placed, before or after State tax and/or local tax is figured, as an example. Next restaurant got into trouble with the Illinois/Chicago authorities in its first year of operating this system because they misplaced where the service charge was inserted. Kokonas swallowed the "penalty" (recalculation, actually) they had to pay, without inconveniencing their customers.

Edited March 9, 2016 by huiray (log)

[gfron1]

Very good tip @huiray, something I hadn't considered.  I'll have to look again at Alinea's system. I didn't think it was quite like this one meaning half down, half at cancellation deadline. I thought they were 100% up front. This is a big feature that I like about this system.

[Alex]

Semi-echoing my previous comment, you're going into a metro area in which you, I assume, will be the first to use this sort of reservation system -- which means that you're going to have a whole lot of convincing to do. I'd be tempted to start with, say, half the seats on pre-pay, with a modest discount for doing so. Many hotels and car rental companies are doing this now. I'd also have people prepay the entire amount rather than half, with a modest penalty -- maybe $25 per seat -- for cancelling within 48 or 72 hours, and only if the seats aren't re-filled. You can always evaluate how your policy is working, and adjust it if needed.

[KennethT]

I've been to restaurants in NYC that were 100% prepay (not including beverages or gratuity) and had no issues with it.  For small restaurants with intricate menus, I understand that no shows can be extremely costly.  Then again, other restaurants just require a credit card to hold the reservation, and then, if you don't show up, they charge a predetermined no-show fee, which is pretty much the cost of the tasting menu.  I have no issue with either system because my attitude is that if I made a reservation at a place like that, I have no intention of not showing, other than some kind of natural disaster or catastrophe!  Likewise, I haven't heard anyone else complain about these systems either, other than people who tend to double book, and those are the people who you're trying to make sure don't stiff you!

 

Personally, I don't really see the point of a half down, half at cancellation deadline system...  To me, it just makes everything more complicated... and I don't really see any benefit.

[MattyC]

I worked at a small place while it switched over to the kokonas system that Alinea and the like have a few years back - at the end of the day, unless you're a small, very high-end place, I don't really see the point - I noticed some people weren't jazzed about it, because 72 hours (or whatever it was) out is a lot of time, and to hold people to it that far out, especially with larger groups, was enough to annoy some enough to head elsewhere. Was it a big deal? Not really, but I also didn't really see the need of the change to that system.

 

I guess my opinion is sure, go for it? But what are you really gaining from it? Pre-paying does deter *some* people, and are you really *that* worried about people cancelling? Generally speaking, for really nice 'occasion' places, people are dedicated to showing up - I never really had any issues with a lot of no-shows, and unless you're charging hundreds for tasting menus and have a reputation to match, then what benefit are you getting as opposed to just charging to a # when they don't show?

 

And as far as tacking the tip on, I would for sure do that - I mean, as you say, people *should* be getting the same level of service, and if it's a really high end place, with the meals being set and payed up front, why leave the service up to chance? A lot of places include it, and if you're an establishment that is gunning for an all around 'special occasion' restaurant, top shelf service is just part of the package.

 

I'm saying if you want to do it, do it, but if not, fine too - this system was really made for places where people were paying hundreds of dollars and not showing. I think if your guest average is around low 100's, it's fine but not really needed, I doubt you'll see much of a difference.

[Tere]

We attend a quarterly pop restaurant in Ludlow, Les Petits Gris  (which is excellent and always full, and shaved to the bone on margins,  including great deals on the house wines, since it is a labour of love for the chef and his other half, whose day jobs are running the cafe in the Food Centre, and this scratches their restaurant itch). I really felt for them at Christmas, when out of 30 covers or so total they had 10 no shows. The table of 6 just didn't show up, the table of 4 called with an hour's notice. On those tight margins I am sure they made a loss, and I know they were having to turn people away beforehand. I said I would be happy to prepay, and many others were, but clearly they don't feel they can ask. Instead the price has gone up by a fiver (still a very good deal). Thanks a bunch, no show people! That was a .... move on their part, especially for a pop up where everything is bought for that service.

[huiray]

8 hours ago, gfron1 said:

I didn't think it was quite like this one meaning half down, half at cancellation deadline. I thought they were 100% up front.

Yes, they are 100% up-front. I was referring more broadly to the prepaid-ticket system. Their rationale is that it is equivalent of buying a ticket to a concert, a sports event, or similar. No refunds. Their system has undergone refinements/changes over the years.

BTW, they also do dynamic pricing - popular days/times are priced higher. Take a look at the Next ticketing website, for example. The corresponding website for Alinea is not accepting bookings at present, of course, since they are "on tour" and not reopening until next month, I think.

(For example, early on scalping of tickets went on and were being resold on Craig's List for more than $3000+ each. Hue and cry resulted. They publicly warned that if they discovered it had happened with certain tickets those tickets would be summarily canceled and the current ticket-holders therefore denied the meal. The demand at Next was so great that people would hover over their keyboards at "opening time" for sale of tickets and frantically hit refresh repeatedly to try to get in the door on the server. I know, I was one of those - at one time. The entire "period" - in the beginning - would be sold within a minute or two. Then - one tried for tickets on Facebook, which was where the "market" got set up; with Next themselves releasing a few tables for that day, and people would also haunt FB waiting for those. One could transfer tickets, but eventually this needed to be registered with Next. (This was before Alinea adopted the system) But those days are past now, the system changed over the years, the "fever" died down, and now if one goes to the Next website one finds availability for many days/times for March, for example.)

Edited March 10, 2016 by huiray (log)

[AlaMoi]

with a good reputation, it would work. 

 

but not for me - simply because - as others point out - a 72 hour cancellation policy is an unacceptable risk.

 

and one thing I've never understood, the argument of:  "so then we know how much food to prepare"

this implies there is one dish being served to every patron.  logically doesn't work for me and makes me wonder what else is being fibbed about.

[gfron1]

The "fibbed about" comment is odd to me. Like my menu, most restaurants who do this are tasting menus. So I'm curious what do you think is being fibbed about? 

 

BTW, my plan has always been 48 hours. Don't know if that matters, but my rationale for 48 is that I know I can refill seats with 48. 24 isn't enough because, as a special occasion restaurant, few people say, "Hey honey, we should go out for your birthday tomorrow."

[AlaMoi]

>>The "fibbed about" comment is odd to me. Like my menu, most restaurants who do this are tasting menus. So I'm curious what do you think is being fibbed about?  

how many seats?
how many entrees?

if you have 40 seats and three entrees, that's a max. demand splatter of 120 "portions" to be "on-hand"

not everyone orders the same thing. 

so,
how many total portions do you intend to have on hand?
and,

how significantly does a 48 hour notice impact that?

 

it's a bit that makes for great marketing BS, but escapes logic.  the potatoes, green beans and cabbage don't count - only highly perishable / time-quality sensitive stuff - fish, shellfish, some micro greens for example - where such precise on-hand quantities will have a serious impact.

and having enough on hand so as not to disappoint vs. some magically reduced qty garnered by 24/48/72 hour notice is highly questionable.  a single fish do-over will wipe out all the "savings" - if in fact any real savings can be achieved.

 

or, consider what the home cook does.... you stock 10 live lobsters, 2 people don't show up, so the two left-over lobster - which pushes $70 per pound net, becomes lobster bisque . . . at a lot of money per cup . . .

 

I've been to many many walk-in joints and gotten the "Oh sorry, that's all gone" routine.  this is not what one would expect at a higher end  / aka featured tasting menu joint.

 

a night with empty seats?  yeah, that's an income impact and yeah that's a rational basis for a xx hr cancellation policy.  running out of 20 day dry aged butterflied beef filet - that will not impact tonight's numbers, but it's going to leave a mark down the line in reputation.  you might consider -

(1)  is anyone really going to object because their beef is aged 21 days instead of just 20?

(2)  ye'olde phone call at 24 hrs:  "Say folks are you still coming?" as an much more customer attractive option.

 

all presuming we're not talking about one IQF pouch from Freezer A and one IQF pouch from Freezer B  . . .

 

[huiray]

28 minutes ago, AlaMoi said:

how many seats?
how many entrees?

if you have 40 seats and three entrees, that's a max. demand splatter of 120 "portions" to be "on-hand"

not everyone orders the same thing. 

 

Um, if it is a tasting menu, as almost all places that use this system would have (like the aforementioned Next Restaurant and Alinea, in Chicago; as well as gfron1's intended place) --- then there is no choice of entrees, or maybe a very limited selection from two (or three, in very rare cases). There is a single menu of what you will be served, (with limited choices, as mentioned, if any; and the price will be the same for the overall meal; and places that even offer these choices would be few, if they use this system) and everyone gets the same series of dishes. There may be a selection on your part when you first book of which tasting menu you wish to have (or you might contact them to see if you can have an alternative menu - say, a vegetarian one) but you will not have the ability to sit down once there and peruse a menu of all sorts of choices and make your selection from dishes from different categories with different individual prices. If that is not how you ever will eat out, then this model is not for you. Ever. On a different food board I used to post on, one particular poster said that he would never eat in some restaurants where you had to eat what the chef placed on the "menu" for the day and where you did not have the ability to choose from a wide array of all sorts of dishes - as it turned out from subsequent discussion, because that poster felt strongly about "giving up control" in any way whatsoever. 

Edited March 10, 2016 by huiray (log)

[gfron1]

I do appreciate all that AlaMoi, but its such an alien concept to any similar restaurant that I've ever known. We really are talking apples and oranges here.

[Tere]

I got the opportunity to eat at the Fat Duck in 2006 because I happened to be back in the UK, in London, and a notoriously scatty friend had decided at the last minute she couldn't afford it, because at that time they were taking the full price of the tasting menu if you didn't show. Best last minute decision I've ever taken advantage of, it still ranks up in the top 5 meals I've ever had, for sure. I didn't think that was unreasonable, at the height of the initial 3 star hype IIRC.

[AlaMoi]

the chef's tables with tasting menu's I've been to have at least 3 choices of appetizer and 3 for mains and 3 for dessert.

and actually the really high end M-starred joints typically have a very limited menu.  I appreciate that - do what you do very well....

 

which does not answer or address the issue:  you have 140 seats.  do you make 40 fish, 40 chicken and 60 beef portions, or the last people seated get whatever is left?

 

there's niche for everything.  do you tell prospective customers the entire menu when they make a reservation?  what do you do when a eater shows up and is allergic to the sea breeze fresh clams casino appetizer?  it would seem preparing a one-and-only menu that no one is allergic to / has no intolerance (real or imagined) to is a pretty tall order.

 

so, as suggested and as now verified by principals, there is no cost savings involved in a 24/48/72 hour cancellation policy. 

it's bogus, it's a fib.  there is a loss of revenue; the impact on costs is nadda. 

the no menu choice reinforces this - everything is the same price - a no show for sloppy joes is the same revenue loss as a no show for lobster thermador.  the costs are different, but if the menu is lobster thermador, buying/fixing less quantity and counting on no shows to make up the cost loss vs. sloppy joes is probably not a good idea.

 

either the patron shows up and pays the full fare, or the patron does not show up and raw food costs are recovered by the cancellation fee.

or, on the brightest side, the eatery keeps the cancellation fee and fills the seats anyway.

 

any high end joint in a major city that can't fill their seats has not chatted up the expensive hotel concierge people.  you know - those people with the magic fingers who can get you in near anywhere at a moment's notice.....

[Deryn]

gfron1 - I presume you have done the appropriate demographic research for the St. Louis area (i.e. I just looked here city data link St Louis). I should think the demographics of the particular city you will locate your restaurant in would greatly influence whether a pre-paid system might even have a chance of being feasible.

 

I see that, in St. Louis proper at least, the median income appears rather lower than I would think would make that kind of system 'popular' at least before you have a 'reputation'/track record where you could draw in people from well outside the area. I also see that it seems that St. Louis is losing population at least in recent years and isn't that large to begin with (although I know it is much larger than the town where you currently reside).

 

Perhaps you know more about that area than I do. Just a personal comment about that - I would go 200 miles to avoid St. Louis these days - because I have been there but as a city, it not only just doesn't appeal to me, but with the tensions there in past years, I am not sure I want to go too close, even for a wonderful dinner at your pending new establishment. So, of course, take my comments with a grain of salt.  

 

However, some people do like the city even if I don't, so I think it is important that you consider the opinion of your local target market. While your price point sounds fine to me (and definitely a bargain from what I know about your culinary finesse, etc.), and the system you are proposing would be viable for me for perhaps that one special occasion a year, what would people from St. Louis think, especially if many are probably more on a beer and chips budget and/or have not been sufficiently exposed to 'haute cuisine' yet to appreciate why they should make the up front 'investment' just to try your fare?

[gfron1]

I've crunched the numbers from many angles. I'm born and raised there, and family is why I'm returning, so I think I have a good sense of the town. Most importantly to what you're talking about is that when I look at StL I'm looking at the metro area, not the city proper. The metro area is just under 3M pop so its a good size, and I've looked at existing nicer restaurants, price point, travel distance from around the metro, etc. I'll be in the ball park on all of those factors.

 

While it isn't set in stone that I'll do this system, since I need to get my feet on the ground and talk to the food writers and other folks, the key factor in my specific case is that I'm only looking to fill 16 seats per night, 5 nights a week. I certainly can't compare what's happened to me in Silver City to what might happen in StL, but its giving me some encouragement that I can pull it off, although possibly with a scary beginning until reviews start coming in.

 

In my mind, I'm connecting your comments @Deryn with the occasional food writer who claims fine dining is dead, in that, I've always believed that the best restaurants aren't focused on pleasing the entirety, but rather their demographic. Based on the success of the various James Beard nominees in town, I just have to believe beyond the beer and chips diners, there are enough diners who want something more. And if there are, the question to me is, would they mind a ticketing system. Using my ugly math, that's just over 4,000 diners a year that I would have to convince...less than a fraction of a percent.