It was bad enough that outfits such as Ticketmaster and StubHub found a way to corner the market on show tickets. But now, brokers are cornering the market on luxe resto reservations. And two NY state lawmakers are on the case…
A famous prime Rib at 4 Charles St, NYC. The ultra-exclusive
eatery has been plagues by reservation no-shows…
A plague on the industry
“It really just causes chaos for a restaurant,” state Sen. Nathalia Fernandez (D) told The Washington Post. She and state Assembly member Alex Bores (D) are sponsoring a bill to end the practice.
High-profile reservation middle men like Appointment Trader and Cita claim they’re not the bad guys. They say other folks are making dozens of reservations online, under fake names, and selling them on the black market – for hundreds and even thousands of dollars. These shady characters make themselves known to hotel concierges and other ground-level functionaries such as cab drivers, who are often asked about the availability of exclusive tables.
Like the ticket brokers, the reservation hustlers charge a hefty ‘premium’. Boston University student Alex Eisler told Business Insider he pocketed more than $70,000 last year ‘trading’ reservations through Appointment Trader. Other, full-time traders can make much more.
But let’s not forget, restaurant reservations are not supposed to cost anything at all.
Abandoned reservations
One of the most serious issues facing higher-end restaurants these days is a plague of abandoned reservations. Commonly known as ‘no-shows’. And resto operators say it’s the brokering industry that causing the problem.
Brokers may make dozens of reservations under fake names at popular eateries. They then sell them through ‘innocent’ ground-level vendors at a markup commensurate with the exclusivity of the venue. The reservations they don’t sell are simply abandoned. And that’s a dead loss for the restaurants targeted. And that hurts everyone involved – from the rest owners, to the dishwashers. Empty tables are lost revenues. And revenues are thin enough these days, as it is.
Simple solution
Fernandez and Bores say the problem is easily solved. They want to outlaw reservation middlemen, and make pricey dining in The City That Never Sleeps more equitable for all involved.
Bores introduced lower-house legislation this past week that would compel third-party reservation brokers to negotiate written agreements with the restaurants whose reservations they offer. Cheaters could be could fined up to $1,000 per day for each restaurant. Diners and restaurants could also sue brokers to recover the cost of reservations.
“The idea is, once this passes, this market should not exist,” Bores said.
A big market
And than would mean the disappearance of a huge grey-market for reservations. Appointment Trader founder Jonas Frey told The Post that, “the market exists for a reason, and his company proves it’. Reservations for more than 375,000 restaurants in some 350 metropolitan areas around the world have been sold on his site.
“That includes nearly 16,000 restaurants and bars in New York [City]. In the past year, the site has done nearly $6 million in business.”
My take
The proposed anti-brokering bill is a good example of the kind of measure governments should be taking to curb unfair practices on the greater food universe. Whether supermarkets should be chastened for high prices by capping their soaring profits at some reasonable level remains to be seen. But when Canadian supermarket mega-chain Loblaw’s reports a profit increase of more than 10 percent over just one fiscal quarter, it’s clear something must be done.
More and more Canadians are slipping below the poverty line each month. More and more of them are faced with desperate choices, such as whether to keep the lights on or buy decent food for their families. I believe there is a breaking point, and we will reach it soon. But then what?
And, if the Fernandez-Bores bill passes, should governments next propose legislation to impose similar regulations and sanctions on ticket brokers?
~ Maggie J.