PrimeTime Tables

[Fat Guy]

The dining public demands that restaurants maintain certain fictions. Restaurants go along with this act, and as a result they paint themselves into a corner.

For example, the public has a fantasy of the chef in the kitchen cooking all the food all the time, even though the reality is that they chef may never personally cook a plate of food, certainly takes days and shifts off (since most New York restaurants operate seven days) and may be in the kitchen one day every month or less (in a multiple restaurant ownership situation). So pretty much every chef fibs about kitchen presence or faces the wrath of an angry public fed by ignorant media, and restaurant language has evolved such that everything that comes out of the kitchen is the work product of "the chef" even if he's not there: "Chef thought you might enjoy X." So deeply rooted is the fantasy that customers, even the super-educated ones who are Society members, largely believe the food tastes better when the chef is in the kitchen. But the restaurant industry screws itself over through its complicity in this illusion, because when it comes time to expand to a multiple establishment operation the chef is stuck.

Likewise, restaurants bend over backwards to create an illusion of egalitarianism in a wildly non-egalitarian business. Customers want to believe they're in an environment of democracy and equality, and restaurants do what they can to pretend this is the case even though they all hold back the best tables for VIPs, have off-menu items for VIPs, offer higher levels of everything to customers who buy $1,000 bottles of wine, etc. They do this as covertly as possible, because they know most of their customers can't handle the truth. The few restaurants that don't try to pretend -- like Le Cirque -- are subject to endless disapprobation. The enterprise of restaurant criticism has evolved to focus on the red herring of egalitarianism, at the expense of meaningful discussion of the actual food.

The public emotional investment in the current reservation system is yet another instance of restaurants working hard to perpetuate an utterly self-defeating fantasy. The industry fears that credit-card guarantees and a hotel-like cancellation policy would cause the public to wake up one day and realize that, heaven forbid, the restaurant business is a business, that restaurants serve you food not because they're your friends but because you pay them.

This Prime Time Tables service has brought the house down on itself not because it does anything unethical, but because it challenges the illusion. And that upsets people. But the illusion is just that: it's not real.

[Nathan]

"Otherwise, it rubs me wrong. What if those tables don't sell? You don't get that walk in business in most places. It just seems dirty. To each their own, but I don't buy scalped tickets and I still managed to go to 3 Mets playoff games. If you want something enough, you plan for it."

eh....no one's going to pay $45 for a reservation unless it's a very in-demand restaurant and time. do you really think that if Gordon Ramsay gets a cancellation for 8:00 P.M. on a Saturday night for a four-top at noon that day that they can't fill it?

as well, you're certainly less likely to be a no-show if you've paid $45 for a reservation.

"In so doing, if they are successful, they will force restaurants to adjust to reality. Daniel Boulud may say, "If a last-minute 8:00 p.m. reservation is worth an extra fifty bucks, why should someone else be earning that?""

That's exactly what I said above.

[Nathan]

It may not be likely, but stranger things have happened. Even if they expand a little bit it could have a significant impact in the availability of prime tables. As for restaurants expanding their pricing according to demand, that would be a function of true market forces. At least I would still have a greater possibility of scoring a table in advance for myself without having to pay the additional fee of the "broker" or I would have the choice of saving a few bucks on less desirable times.

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You mean you would rather pay the fee to the restaurant than PTT? I suppose there's something to be said for that. Well, if there really is a large market for this (which there isn't)...then that's exactly what will happen (or actually, what will happen is they'll arrange for kick-backs to the restaurant...to keep the fiction they're not doing it).

You already have the opportunity to save a few bucks at numerous restaurants during less desireable times.

[oakapple]

You mean you would rather pay the fee to the restaurant than PTT?

I would rather pay the restaurant. It's simpler that way (no third party to deal with).

Also, my dining choices reflect, among other things, a choice about whom I want to reward with my business. For instance, my girlfriend and I are having dinner at Country on Valentine's Day. We chose Country because we had a great experience there previously. On V-Day, we will be paying a premium over the usual price of dinner at Country. I would rather not pay that premium. But if I must do so, I would prefer to have it go to the people who will actually be providing the service, than to middlemen who are not.

Well, if there really is a large market for this (which there isn't)...

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I think you are misjudging the market. There are an awful lot of dinners served every night in New York, for which an extra $25-45 would be a trivial add-on. There are plenty of people who call at the last minute, and when they are told no tables are available, that is the end of it. In principle, I am sure a good deal of those people would pay a small premium, if it meant their request could be accommodated.

There would be, of course, a psychological barrier, since we are not used to dealing with restaurants this way. But such barriers can be overcome. As noted above, people already doing it to an extent (holidays, lower prices at lunch, pre/post-theatre pricing, and so forth). This would merely be extending the concept.

In addition, PTT poses additional barriers, because you have to join first before you can participate, and membership isn't instantaneous. If premium pricing is going to exist, it's much more efficient if it comes from the restaurant.

Edited January 24, 2007 by oakapple (log)

[tommy]

Well, if there really is a large market for this (which there isn't)...

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I think you are misjudging the market. There are an awful lot of dinners served every night in New York, for which an extra $25-45 would be a trivial add-on. There are plenty of people who call at the last minute, and when they are told no tables are available, that is the end of it. In principle, I am sure a good deal of those people would pay a small premium, if it meant their request could be accommodated.

i tend to agree. having some experience with taking clients to dinner, and associating with many others who do, i can say with some level of confidence thati would often consider this service for business alone. i can't tell you how many times a client has decided where they want to go on the day of, and you find yourself in the position of having to say "uh, let's go elsewhere." the 45 dollars is trivial in a client dinner situation, and well worth it.

not sure if anyone has come across it yet, as no one has mentioned it, but Broadway theaters offer "premium seats", which can run at least twice the cost of regular seats. i generally buy those seats as i don't have to plan 8 months out to see a play, and still get good seats. obviously all the money goes to the theater, and i don't feel so bad about it. not that the theater business model is even close to the existing restaurant business model, but i'm just sayin'.

[Simon_S]

Likewise, restaurants bend over backwards to create an illusion of egalitarianism in a wildly non-egalitarian business. Customers want to believe they're in an environment of democracy and equality

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I think you do the average diner at a high-end restaurant a disservice if you think they aren't aware that restaurants are businesses. Of course they are businesses, and if those businesses need to change their booking policies to ensure success and survival, then so be it.

What surprises me is the robust defence of a third party attempting to put a price on something that is currently free. Are we *that* blindly accepting of free market economics that we just shrug our shoulders? "Oh well, maybe I'll have to pay for that table in the future, but hey, that's the market?" Nobody can argue that there's a potential demand there, and that the people behind this service may make some money out of it, but I don't have to like it, and I don't have to think that it's all fair game. Furthermore, the illusion alluded (ha) to above is a crucial part of the restaurant business, and I don't see how it benefits me to feel even more 2nd class by facing the prospect of having to pay a third party for a primetime table. Of course, that's a long way down the road, but (like the transfats ban) this is a slippery slope. If the business model proves successful, it would be ridiculous to think that it wouldn't expand.

The industry fears that credit-card guarantees and a hotel-like cancellation policy would cause the public to wake up one day and realize that, heaven forbid, the restaurant business is a business, that restaurants serve you food not because they're your friends but because you pay them.

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I'm not buying this either. If "the industry" started doing this across the board, punters would just suck it up and deal with it. New Yorkers are hardly going to stop going to restaurants. This is common practice in certain restaurants over here coming up to Christmas for example. When faced with it, people generally shrug their shoulders, say "well, I suppose that's only fair", and get on with it.

This Prime Time Tables service has brought the house down on itself not because it does anything unethical, but because it challenges the illusion. And that upsets people. But the illusion is just that: it's not real.

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No, the reason it upsets me has nothing to do with illusions being challenged. I simply don't want to have to pay for something that right now I can get for free. It upsets me because if I'm visiting NY and want to eat at some of the premier restaurants, I want to be able to book in advance. I don't want to go head-to-head in the queue with a corporate entity of 50 people hitting redial the moment the reservations open (an exaggeration, but nonetheless). I don't want to relinquish my table to a business that will now charge me for it. Bar a few "assurances" that this surely won't happen, it just feels like a slippery slope to me.

Si

[Nathan]

"In addition, PTT poses additional barriers, because you have to join first before you can participate, and membership isn't instantaneous. If premium pricing is going to exist, it's much more efficient if it comes from the restaurant."

Are you arguing my side or yours? This would appear to support my position.

[Sneakeater]

I should just note that Simon pretty much says what I've been trying to say, except he says it a lot more clearly.

[Simon_S]

As an aside, I thought I might share this unusual coincidence. I was looking up the information for a restaurant in Dublin that I wanted to book, and happened across this on the restaurant website.

Si

[oakapple]

"In addition, PTT poses additional barriers, because you have to join first before you can participate, and membership isn't instantaneous. If premium pricing is going to exist, it's much more efficient if it comes from the restaurant."

Are you arguing my side or yours?  This would appear to support my position.

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I thought you were saying this service is a good thing. I am saying it's a bad thing.

[Nathan]

those barriers evince the fact that it is a very limited service aimed at a specific niche

[Fat Guy]

What surprises me is the robust defence of a third party attempting to put a price on something that is currently free.

If you pay hundreds of dollars for dinner at a fine restaurant, was your reservation still free? A reservation is similar to an option. When saying that reservations are currently free, what we mean is that right now restaurants give customers free options on meals. A third party has now come along and said that option has value. Undeniably, it does. So either somebody will make money from it, or there has to be rationing.

In addition, while there is no charge right now for reservations, the fact that reservations are free options certainly does carry other kinds of costs. It's the reason restaurants have an overbooking problem, and it's therefore the reason parties aren't seated on time at so many restaurants. It also increases the cost of a meal, to the extent restaurants have to over-purchase inventory by a certain amount in order to address the unpredictability that cost-free cancellations cause.

Of course, that's a long way down the road, but (like the transfats ban) this is a slippery slope.

Whether or not there's a slippery slope, this event is only one small part of an existing pattern. For one thing, this is not by any means the first-ever attempt to sell or broker reservations -- it's simply the most brazen we know of to date. For another thing, restaurants already engage in many yield-based pricing practices, such as charging more for dinner than lunch, offering pre-theater discounts, and charging more for menus on holidays -- so we are already quite far along the slope towards also charging a premium for prime time tables. And for still another thing, the top restaurants already hold back most of their prime time tables for repeat customers and other VIPs. You're not competing with Prime Time Tables for the entire universe of prime time tables. You're competing for the small percentage of those tables that are made available to random callers. For that matter, Per Se is already using a credit card guarantee system, which essentially makes this whole "problem" go away -- once again leading the way into the future for other restaurants.

I don't want to relinquish my table to a business that will now charge me for it. Bar a few "assurances" that this surely won't happen, it just feels like a slippery slope to me.

A slippery slope to what? What's the worst case scenario here? We're talking about a very limited impact, even if every prime table gets assigned, say, a $50 premium (whether we think of that as "paying for the reservation" or a prime time surcharge is really more of a psychological issue than an economic one). We're talking about Thursday-Saturday nights at the very most popular restaurants, for the seatings between 6 and 9. So, if you don't want to pay extra for a table, you eat Sunday-Wednesday any time, or you take a 5:45 or 9:30 reservation Thursday-Saturday. It's no big deal.

[Simon_S]

In addition, while there is no charge right now for reservations, the fact that reservations are free options certainly does carry other kinds of costs. It's the reason restaurants have an overbooking problem, and it's therefore the reason parties aren't seated on time at so many restaurants.

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Now this is something I'm simply not familiar with, so I can't comment. I'm assuming the over-booking and consequent inability to seat diners on time is an NY problem. It doesn't really exist in my local market.

Nonetheless, I think there are two issues being confused here. Whether restaurants have these problems or not is not relevant to the issue at hand. Whether I'm paying for the "free" option in some other way is not the issue at hand. I'm in agreement that the system doesn't quite work. What I don't accept is that a third-party charging for bookings is in any way a good thing for me, and as a consequence I don't have to like it! Of course it's good for some people, there wouldn't be a business model if it wasn't, but I'm one of the "little guys" and I don't want anything to make it more difficult/more expensive than it already is, especially not if it's going to line the pockets of someone selling something that I personally don't believe should be theirs to sell. Even if I *am* currently paying for the free option, this service won't mean restaurants reduce their prices, so no matter what way you swing it, I'm coming out worse.

The top restaurants already hold back most of their prime time tables for repeat customers and other VIPs. You're not competing with Prime Time Tables for the entire universe of prime time tables. You're competing for the small percentage of those tables that are made available to random callers.

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Precisely! So at the moment I'm in a competition for a very limited number of tables that this business will now ensure are even more limited. Gee, great!

A slippery slope to what? What's the worst case scenario here? We're talking about a very limited impact, even if every prime table gets assigned, say, a $50 premium (whether we think of that as "paying for the reservation" or a prime time surcharge is really more of a psychological issue than an economic one). We're talking about Thursday-Saturday nights at the very most popular restaurants, for the seatings between 6 and 9. So, if you don't want to pay extra for a table, you eat Sunday-Wednesday any time, or you take a 5:45 or 9:30 reservation Thursday-Saturday. It's no big deal.

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Says you. I think it's a big deal. In this example, "before PTT" I could eat the way I wanted to eat, "after PTT" I can't. There's a change, I don't like it, and whether anyone here things it's no biggie, or $50 isn't that much, or worse things happen at sea, or whatever, it impinges on my enjoyment and I'm not happy about it.

Of course, given the fact that I only make it to NY for a few days every few years, it's not going to impinge on me directly, but it's the principle of the thing. I'm certainly surprised that something, no matter how small, that potentially deprives us of the chance to dine and offers the chance to the highest bidder instead is receiving such support in a place like eGullet.

Si

[Busboy]

The service feels annoying more because the people running it feel like leeches than because there's anything wrong with it.

But really, they're just pikers, ten-percenters, under-assistant West Coast promotion men or whatever. And I'd pay good money to get a reservation to Per Se on my next trip to New York. Any attempt to make a reservation there is such a pain in the ass that I'd gladly pay to have it reduced.

But, what I really wanted to say, is why don't restauranteurs like Keller take the law of supply and demand and just auction off every table every night? This is the menu, this is the minimum bid, and you must include wine? Top bidders get first choice of table time, every pays up front with a credit card, and the free market triumphs.

[Fat Guy]

Simon, would you be more comfortable with the situation if the premium charged for prime time tables subsidized lower prices at other times?

[oakapple]

But really, they're just pikers, ten-percenters, under-assistant West Coast promotion men or whatever.  And I'd pay good money to get a reservation to Per Se on my next trip to New York.

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By the way, Per Se is the one hard-to-get restaurant that you can't reserve with this service.

I think the difficulty of reserving at Per Se is over-stated. I know numerous people who've done it. You just have to be ready to hover over the phone at 10:00 a.m. exactly 60 days before the date you want to visit. It doesn't work well if you're a short-term planner, but otherwise it's not that difficult.

[Sneakeater]

I want to amplify something Simon said.

I'm not sure I see the inextricable connection between the "stood up" reservations/overbooking problem and this service.

As FG says, that problem could be solved by requiring credit card guarantees of reservations. You don't need reservations brokers to solve that problem.

[Fat Guy]

But, what I really wanted to say, is why don't restauranteurs like Keller take the law of supply and demand and just auction off every table every night?  This is the menu, this is the minimum bid, and you must include wine? Top bidders get first choice of table time, every pays up front with a credit card, and the free market triumphs.

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Well, hotels don't do full-on auctions either. There are too many variables. So-called yield management pricing strategies are more fitting. It might be possible to auction a few tables, but to auction the entire restaurant would be unwieldy. In addition, full advance payment reduces the restaurant's opportunities for upselling. And restaurants still have to account for their repeat customers -- it wouldn't be wise to push them into an auction situation because then there's less incentive for them to return to your restaurant instead of bidding on tables elsewhere.

[Sneakeater]

Simon, would you be more comfortable with the situation if the premium charged for prime time tables subsidized lower prices at other times?

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Don't you think this might be a root reason why some of us are bothered by the fact that this fee is charged by a third party who has no connection with the restaurant and provides no service beyond maintaining a pool of reservations?

[Simon_S]

Simon, would you be more comfortable with the situation if the premium charged for prime time tables subsidized lower prices at other times?

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Hmmm, I know where you're going with this question and it's a good one.

Ultimately, my unease stems from the riskless profiteering aspect of the business. I simply don't want a middle-man in my dealings with a restaurant, even if it balances out in my favour sometimes. If the restaurant implemented this policy themselves I'd understand and while I wouldn't necessarily be "comfortable", I would accept it. But as long as there's someone in the middle taking a cut that could be going towards another bottle of wine, I'm not going to be happy.

Si

[Sneakeater]

And maybe one of you economics guys can explain to me why I'm particularly bothered by the fact that they're maintaining a pool. If this were a pure concierge-type service, where you told them what reservation you wanted and then they went to the trouble of getting it for you on a case-by-case basis, I wouldn't be bothered at all.

[Nathan]

"Says you. I think it's a big deal. In this example, "before PTT" I could eat the way I wanted to eat, "after PTT" I can't."

Except that you can't in NY. there are certain restaurants in NY where the only possible way to eat at those times on those days is to call 60 (or 30 in some cases) days in advance at precisely 10 a.m. and then constantly pushing the redial button in the hope that you get through. for many of us, this is not an option. and even if it is, an hour of my time is worth more than $45. throw in the aggravation that there is no one I can count on to eat at one of these restaurants with me on a date certain 60 days in advance. I had to cancel a Friday 8:30 reservation at LB the other day for this precise reason.

so, bizarrely enough, in theory this service actually increases the odds that I can dine when I want, where I want. and the same certainly goes for you (unless you really want to pay transantlantic phone charges to be on hold for a half hour). of course, in actuality it doesn't affect me at all since I'm generally reserving two-tops, not four or six-tops.

[Fat Guy]

You just have to be ready to hover over the phone at 10:00 a.m. exactly 60 days before the date you want to visit.

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I agree with the factual claim there, but would add that being ready to hover over the phone at 10:00 a.m. exactly 60 days before the date you want to visit is very much a "cost." Doing so is not "free" except to the person whose time has no value. The burden is not easily assigned a monetary value in the abstract, but the Prime Time Table service indicates that to many people it's worth $50 to avoid that cost.

[Fat Guy]

Simon, would you be more comfortable with the situation if the premium charged for prime time tables subsidized lower prices at other times?

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Don't you think this might be a root reason why some of us are bothered by the fact that this fee is charged by a third party who has no connection with the restaurant and provides no service beyond maintaining a pool of reservations?

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I'm just trying to isolate the objection. If the issue is that you'd rather pay the money to the restaurant than to a third party, I'm not sure I disagree in principle -- but the reality is that, for now, the restaurants aren't offering this service and the third party is.

[Nathan]

"but the reality is that, for now, the restaurants aren't offering this service and the third party is."

as I've suggested, if there really is a large unmet demand for this service, one of two things will happen: a. the restaurants will start doing it themselves; or, b. (more likely), the restaurants will agree to give some prime time reservations to these services (saving others for VIPs and regulars) in return for a kick-back of the reservation fee earned by these services.

the thing is, if this happens, opentable will be the one getting the piece of the action. (why? because virtually every computerized restaurant in the U.S. uses opentable's reservation software. many -- especially in NY -- use its online booking service as well (opentable kills dinnerbroker in online bookings because opentable's online booking service blends seamlessly with the opentable software that every restaurant uses).

in other words, PTT's business model fails if there is too large a demand for this service. if the naysayers here are right and there really are a lot of people willing to pay cash for prime-time tables - restaurants will start offering prime time tables at a premium through opentable (with both taking a cut)....and this will probably drive PTT out of business.

so, yeah, it behooves PTT to keep this very narrowly targeted.