If it were a small fee (less than $5) and it guaranteed my party no waiting, then heck yes; especially for very popular places that have long waits or on special occasions when you want everything to go smoothly.
If I wanted to eat at a highly-acclaimed restaurant and was given the option of either waiting three months or paying some fee of $X to guarantee a reservation tonight, then there are some non-zero values of X in which I would gladly pay.
do you have a few minutes to chat over the next few days? would love to talk to you about this comment. working on a solution that would allow you to do just that -- with a twist. you can email me at josh at mptonight dot com.
If you want to do this for customer validation, don't bother, the market for this already exists. Sometime ago, there was a post here about a startup making a killing selling software which sells reservations for restaurants and bars.
No, but I'd happily make a non-refundable down-payment on my meal in exchange for a reservation, especially for short notice (<48 hours) reservations. I'd much rather such a system than any of (1) restaurant won't take any reservations, (2) no reservations for the next 2 months, (3) paying for a scalped reservation, (4) and/or waiting in line.
I rarely go to any sit-down restaurants, so my opinion may be worthless, but I think I would be fine with a nominal fee, or better yet a deposit that goes toward the price of the meal.
(a) Society is currently less stratified than pretty much any point in recorded history, so if you don't like stratification then don't complain.
(b) On the other hand, popular and in-demand restaurants already have schemes for letting rich and/or important people get reservations ahead of the plebs. When I went to French Laundry (after a six-month odyssey to get a reservation) the waiter mentioned that only about half their tables are actually open for reservation by the ordinary scheme, the others are reserved for booking by other means. If you're a rich dude who likes to bring clients there and always buys the expensive wine, you'd better believe that they're gonna give you the number for their secret reservation hotline.
> (a) Society is currently less stratified than pretty much any point in recorded history, so if you don't like stratification then don't complain.
In terms of the share of U.S. income going to the top 10% or 1%, the data would seem to imply that the U.S. is currently the most stratified it's been in over 80 years [1].
>(a) Society is currently less stratified than pretty much any point in recorded history, so if you don't like stratification then don't complain.
Terrible, cringe-worthy logic.
If stratification still exists, whether or not it is of a lesser degree than in the past is irrelevant. It exists, and you can complain about it. In fact, if you don't complain about it, that may be misconstrued as implicit acceptance. So complaining is actually the better move, provided you actually want said stratification eliminated.
Hi to3m -- do you have a few minutes to chat (gChat?) about this? currently working on a platform for this type of thing, would love to get your feedback. josh at mptonight dot com
Sorry, that comment was perhaps needlessly gnomic, and it's a throwaway line anyway :) I just imagined that the obvious way of marketing this would be (in addition to emphasising the convenience aspect) to somehow imply that if you love your family enough then you'll outbid other people, allowing you all to jump the queue.
There are a lot of good options that don't involve staying in a line or rushing to make a reservation.
I've heard about restaurants wanting charge for reservations by "prepayment of the meal", and it's somewhere I wouldn't go to.
"Alicia’s reluctance to user her and her restaurant’s name suggests one reason: customers are very sensitive not only to prices but to the perception of a rip-off."
It's interesting, I remember listening to NPR awhile back and they had a story about how high end restaurants are experimenting with a "ticket" system for reservations. Part of the problem is that even for restaurants where say you reserve well in advance for a holiday, it's surprisingly common for people to cancel at the last minute. So, some have tried to have people prepay for the meal. It might only work for rather pricey restaurants though...Here's the link:
http://www.npr.org/blogs/thesalt/2014/08/05/337834577/no-mor...
I think it's because there's a general cost in uncertainty for table occupancy. A reservation makes that go away.
If you have a restaurant that will always have a permanent line waiting on tables, then maybe you could charge. But it would be easier to hide that cost in the bill.
He same reason most economically obvious things don't happen in practice: transaction costs. But with mobile electronic payments, this is changing across the economy.
Reservations force tables to remain unoccupied, and even when they're occupied, diners feel no need to rush to make room for the next set of diners since they reserved their time slot. A restaurant that's not popular enough to fill up completely doesn't need reservations, and one popular enough that they have to turn away people is losing money accepting reservations. So, why do so many restaurants do it?
Because customers are willing to pay higher food prices in exchange for reliably being able to arrive at the establishment at a particular time and be seated.
I've been to restaurants that don't take reservations, and instead take a wait-list. It took something like 3 hours of waiting to get a table.
I could never go there for a client or investor dinner, because the unreliability of the table timing means I can't schedule it in. Considering a meeting like that is worth tends of thousands of dollars and requires that people with busy schedules all be around at the same time, I don't mind the extra $50-100 a person meals at those places tend to run.
tl;dr: They do charge a reservation premium, it just gets mixed in to the food expense rather than being a separate item. Additionally, people scheduling tend to bring large parties or are there for special events, which tend to spend more money.
Because reservations affect popularity, both in general and with specific, potentially desirable customers. All else being equal, I am more likely to eat at a restaurant that takes reservations than one that does not because I know I'll have a table when I get there, and I doubt I'm the only person who feels that way. This is particularly true for higher end restaurants where the "experience" is a bigger part of meal. And waiting around to sit down is probably not the experience you had in mind.
And it's worth noting that a reservation is valuable even if there isn't always a wait. Unless the customer is a regular, he's unlikely to know what the wait would be like in the first place, and things vary depending on the day and time. A reservation removes that uncertainty for the customer, which is valuable even if a reservation wouldn't have been required.
Chez Panisse charges a $25 deposit for reservations, that goes towards your meal. But they have two seatings per night, so it is more difficult to fill tables for no-shows. It's still impossible to get reservations there.
That's a good system - presumably if you cancel your reservation, you get back your deposit, and it allows the people on the waiting list a chance at the seat.
What I've never understood is the opposite, is those restaurants which have insane lines, as in 2+ hours waiting outside to get a seat, why they don't simply raise their prices by $1 or $2.
There was a restaurant that everyone in college in Vancouver went to back in 1993-1994, Antons Pasta, and you always had to wait incredibly long for - the place was packed 100% of the time at night.
I would see this line (fresh from my economics class), and wonder, instead of charging $5 for the tortellini, and have a 3 hour line, why don't they charge $5.50, or heck, even $6.00, and only have a 1 hour line. It's not as though having a 1 hour line is going to result in any lost business.
I'm thinking that part of this is the fact that a long line outside, means there will always be business inside, and there is always some paranoia in a restaurant of having empty seats inside, and better to have slightly missed profit opportunity, than to have some seats go empty and make a "reasonable" profit.
Because lines are marketing/publicity/advertising. The longer the line, the more effective your publicity is, and the more long-term popularity you are stacking up.
It's probably a short-term profit to have the restaurant charge more and to have shorter lines, at the expense of foregoing the free/best publicity possible long-term.
Because most restaurants only get busy on certain nights of the week, and even then only during certain seasons. So they'd need to start with the high prices and then have special offers or cheaper menus during lunch or midweek etc. Some restaurants do this , but it tends to be chain restaurants so it's seen as a bit declasse.
Isn't it the case that restaurants have separate lunch and dinner menus for this very reason?
I see further down that Antons is still in business, and still has a line - so perhaps we shouldn't second guess them - apparently they know what they are doing.
There's also the fact that not all restauranteurs are thirsty entrepreneurs. Honestly, if you were, you likely wouldn't get into the restaurant business as it's hardly a great market - most restaurants end up closed and in financial ruin.
Many restaurant owners (and I know a couple) are quite happy to earn enough to live comfortably, and to be - for want of a better term - a cultural hotspot. I bet the owner of Anton's Pasta loves that his restaurant is that popular.
Sure. I'd wager (anecdotally) that there are more big successes in the startup world, though. Even the most phenomenally successful restaurants don't go on to have IPOs unless they become massive national chains. And you can transfer your startup experience to a high paying job at Google, Facebook, etc. - being a failed restauranteur doesn't have the same marketability.
I don't understand how this constitutes an explanation:
"Why don't restauranteurs maximize their profits? They're leaving money on the table," said Alice.
"They don't maximize their profits because, if they did, they wouldn't be running a restaurant in the first place. The fact that so many of them end up destitute is proof of that," replied Bob.
That seems to me more like a reaffirmation than an explanation. Doesn't it still seem mysterious when you put it that way?
If the market for restaurants were far from competitive (due to say, a law sharply limiting the number of restaurants in a town) I could understand that sort of attitude. It seems to me, though, that even though there's a lot of product differentiation, there are still many restaurants per cuisine type in every major city and ultimately, a meal is a meal. We should be able to learn something by granting that the market is competitive. So that in the long run marginal revenue equals marginal cost, and firms that can't do that, exit.
Given that, why are so many restaurants run as labors of love according to principles that would make a freshman econ major wince? And does that explain why so many restaurants that are run that way are run into the ground? Doesn't this state of affairs (which is pretty much public knowledge to anyone who's ever had a friend who worked in a restaurant) imply the existence of a large stack of $20 bills on the sidewalk for a profit-maximizing restaurant to swoop in and pick up?
That question isn't rhetorical; I find restaurant economics genuinely confusing, to the point where I am willing to believe that the most parsimonious explanation involves legions of chef/owners irrationally blowing their credit ratings on a mid-life crisis. A mid-life crisis with waitstaff and sanitation permits.
I won't wait more than about 30 minutes in line at a restaurant for dinner, I don't care how good or cheap it is. For lunch if they don't have a table immediately available I move on. I don't understand how people have time to spend hours waiting for a meal.
Gary Becker actually came up with a very elegant theory to explain this phenomenon: an individual consumer's desire to eat at a given restaurant is often driven by the observation that other consumers are eating at the same restaurant. Long lines give restaurants the social proof they need to maintain profit-maximizing levels of demand.
San Francisco, where allocating resources by paying for them is vulgar. You should instead come by them honestly, such as by telling the concierge at the Four Seasons that you wish to partake in the cultural delights of the city.
I've encountered another approach in NYC which I haven't seen mentioned here. Some higher-end restaurants require a credit card number (over the phone, maybe online is possible too) which they tell you they will charge e.g. $25 per person for no-shows. The first time I was a bit put-off (giving out CC numbers on the phone never feels great), but now I'm more sanguine about it.
Aside: in central London, booking is essential. Many decent (not even high-end) restaurants have most of their tables booked in advance. I did a double-take the first time I walked into a place with two-thirds of its tables empty and was turned away. "Fully booked" seems a lot more common there. I never knew a restaurant to charge for booking, but I did know people who paid "unofficially" to get tables, or had office assistants scramble for them.
My opinion is that having a long queue, possibly longer than any of the competitors' queues is more important for the owners than a few more bucks, especially in the long run.
Amongst their peers, chefs are more interested about their fame than their pockets.
48 comments
[ 0.25 ms ] story [ 100 ms ] threadPersonally, I would not... I imagine that is why.
If you believe you can execute it, go for it.
(b) On the other hand, popular and in-demand restaurants already have schemes for letting rich and/or important people get reservations ahead of the plebs. When I went to French Laundry (after a six-month odyssey to get a reservation) the waiter mentioned that only about half their tables are actually open for reservation by the ordinary scheme, the others are reserved for booking by other means. If you're a rich dude who likes to bring clients there and always buys the expensive wine, you'd better believe that they're gonna give you the number for their secret reservation hotline.
In terms of the share of U.S. income going to the top 10% or 1%, the data would seem to imply that the U.S. is currently the most stratified it's been in over 80 years [1].
[1] http://economix.blogs.nytimes.com/2013/09/10/the-rich-get-ri...
Terrible, cringe-worthy logic.
If stratification still exists, whether or not it is of a lesser degree than in the past is irrelevant. It exists, and you can complain about it. In fact, if you don't complain about it, that may be misconstrued as implicit acceptance. So complaining is actually the better move, provided you actually want said stratification eliminated.
Think.
But perhaps I shouldn't be surprised people don't think of this, what with them not loving their family enough, etc.
I've heard about restaurants wanting charge for reservations by "prepayment of the meal", and it's somewhere I wouldn't go to.
"Alicia’s reluctance to user her and her restaurant’s name suggests one reason: customers are very sensitive not only to prices but to the perception of a rip-off."
Exactly
If you have a restaurant that will always have a permanent line waiting on tables, then maybe you could charge. But it would be easier to hide that cost in the bill.
Reservations force tables to remain unoccupied, and even when they're occupied, diners feel no need to rush to make room for the next set of diners since they reserved their time slot. A restaurant that's not popular enough to fill up completely doesn't need reservations, and one popular enough that they have to turn away people is losing money accepting reservations. So, why do so many restaurants do it?
"Arrive at 8 and be seated by 8:10" is a different thing than "Maybe you'll get a table".
I've been to restaurants that don't take reservations, and instead take a wait-list. It took something like 3 hours of waiting to get a table.
I could never go there for a client or investor dinner, because the unreliability of the table timing means I can't schedule it in. Considering a meeting like that is worth tends of thousands of dollars and requires that people with busy schedules all be around at the same time, I don't mind the extra $50-100 a person meals at those places tend to run.
tl;dr: They do charge a reservation premium, it just gets mixed in to the food expense rather than being a separate item. Additionally, people scheduling tend to bring large parties or are there for special events, which tend to spend more money.
And it's worth noting that a reservation is valuable even if there isn't always a wait. Unless the customer is a regular, he's unlikely to know what the wait would be like in the first place, and things vary depending on the day and time. A reservation removes that uncertainty for the customer, which is valuable even if a reservation wouldn't have been required.
Yes, as long as you cancel more than 48 hours before the reservation.
There was a restaurant that everyone in college in Vancouver went to back in 1993-1994, Antons Pasta, and you always had to wait incredibly long for - the place was packed 100% of the time at night.
I would see this line (fresh from my economics class), and wonder, instead of charging $5 for the tortellini, and have a 3 hour line, why don't they charge $5.50, or heck, even $6.00, and only have a 1 hour line. It's not as though having a 1 hour line is going to result in any lost business.
I'm thinking that part of this is the fact that a long line outside, means there will always be business inside, and there is always some paranoia in a restaurant of having empty seats inside, and better to have slightly missed profit opportunity, than to have some seats go empty and make a "reasonable" profit.
That's the only theory I could come up with.
It's probably a short-term profit to have the restaurant charge more and to have shorter lines, at the expense of foregoing the free/best publicity possible long-term.
I see further down that Antons is still in business, and still has a line - so perhaps we shouldn't second guess them - apparently they know what they are doing.
Many restaurant owners (and I know a couple) are quite happy to earn enough to live comfortably, and to be - for want of a better term - a cultural hotspot. I bet the owner of Anton's Pasta loves that his restaurant is that popular.
Isn't this also the case for most tech startups?
"Why don't restauranteurs maximize their profits? They're leaving money on the table," said Alice.
"They don't maximize their profits because, if they did, they wouldn't be running a restaurant in the first place. The fact that so many of them end up destitute is proof of that," replied Bob.
That seems to me more like a reaffirmation than an explanation. Doesn't it still seem mysterious when you put it that way?
If the market for restaurants were far from competitive (due to say, a law sharply limiting the number of restaurants in a town) I could understand that sort of attitude. It seems to me, though, that even though there's a lot of product differentiation, there are still many restaurants per cuisine type in every major city and ultimately, a meal is a meal. We should be able to learn something by granting that the market is competitive. So that in the long run marginal revenue equals marginal cost, and firms that can't do that, exit.
Given that, why are so many restaurants run as labors of love according to principles that would make a freshman econ major wince? And does that explain why so many restaurants that are run that way are run into the ground? Doesn't this state of affairs (which is pretty much public knowledge to anyone who's ever had a friend who worked in a restaurant) imply the existence of a large stack of $20 bills on the sidewalk for a profit-maximizing restaurant to swoop in and pick up?
That question isn't rhetorical; I find restaurant economics genuinely confusing, to the point where I am willing to believe that the most parsimonious explanation involves legions of chef/owners irrationally blowing their credit ratings on a mid-life crisis. A mid-life crisis with waitstaff and sanitation permits.
The original paper: http://www.unc.edu/~fbaum/teaching/PLSC541_Fall06/Becker%20J...
Aside: in central London, booking is essential. Many decent (not even high-end) restaurants have most of their tables booked in advance. I did a double-take the first time I walked into a place with two-thirds of its tables empty and was turned away. "Fully booked" seems a lot more common there. I never knew a restaurant to charge for booking, but I did know people who paid "unofficially" to get tables, or had office assistants scramble for them.
Amongst their peers, chefs are more interested about their fame than their pockets.