New tech is poised to fix a broken business model diners take for granted.
Photo: Drew Myers / Corbis
If you’ve ever made reservations at a fancy restaurant then failed to show up for dinner, you’re an asshole. And you’re not alone. Empty reserved tables cost restauranteurs thousands every year while preventing diners who show up with hopeful eyes and empty stomachs from sitting down. It’s an unbalanced system maitre d’s resent, everyone else accepts as given, and technology might be on the verge of fixing. An app called Resy is allowing diners to be impulsive and avoid waits by buying tables. Yes, it’s the latest venture capital-funded instant gratification engine, but it’s also something more: a new approach to high-end dining.
“Reservations cost us something,” says Robert Bohr, owner of the hip Downtown Manhattan eatery Charlie Bird. “Commitments matter in the service business. You have to pay when you don’t show up to a dentist appointment or a massage or basically everything else because that business has allotted time to serving you. The restaurant business is a service business and restaurants should operate like businesses.”
Bohr seems like a mellow guy, but he gets heated about reservations. And no wonder: The modern reservation system is, to put it mildly, outdated. Food historian Rebecca Spang theorizes that the system is derived from the 18th century practice of reserving private rooms in early restaurants. During the early 19th century, when the idea of dating became popular, it was still considered improper for men and women to consort in a private room so reserved tables in public rooms allowed for public courtship. Essentially, Bohr is taking a hit so that 19th century flibbertigibbets don’t rumormonger. That doesn’t make a lot of sense.
And the problem is two-fold: Not only are reservations a one-sided commitment, the densely packed calendars they create make it almost impossible for hip restaurants like Charlie Bird to build relationships with individual clients – to have regulars. That’s why Bohr refuses to reserve almost half of his tables and doesn’t care about the money he splits with Resy (roughly 10 percent of his restaurant’s average tab) when a user buys a table.
“We’d do it for free because the diners we get are the right kind of people – people who really want to be there,” says Bohr. “In New York, you open up and you get food tourists for six months before people forget about you. It’s really the neighborhood that supports a restaurant. Resy customers are already coming back. We’re giving the table money to charity.”
Because diners that buy tables are more likely to be invested and enthusiastic, Resy is actually making Charlie Bird a better restaurant. An app isn’t going to improve the food (which is great by the way, get the rabbit), but customers affect ambiance and ambiance matters. Ben Leventhal, Resy’s founder, knows this better than most. Since creating the blog network Eater a decade ago, Leventhal has been the high priest of foodie culture. He nerds out on restaurants and he’s the first to admit that while the current iteration of Resy works there are many ways improve the table booking experience, which – he doesn’t dance around the point - “sucks.”
“The margin at a four-star restaurant right now is eight percent,” says Leventhal. “That’s indicative of a broken system and inventory being misallocated."
Leventhal, who has also invested in the bill splitting and tipping app Cover, has considered auction systems and pricing models based on time before the meal, but he’s using the simple buy-a-table system to get Resy off the ground. It’s easy to explain to restauranteurs, which is presumably why big-name spots like Minetta Tavern, Toro, and Gotham Bar are already participating in the pilot program and angel investors have funded the start-up to the tune of$2 million.
"What we want is for our users to tap twice and be confirmed at the best restaurant for them on that night,” says Leventhal. “When we created Eater, we basically looked at blogging technology and tried to figure out how to layer that on top of restaurants. Now we’re doing the same with this app technology.”
In short, Resy isn’t really in the tech business so much as it’s in the modern restaurant business. And the modern restaurant business is different than the industry that brainstormed the idea of free reservations. As Leventhal puts it, “it’s no longer dinner and a movie; it’s just dinner.” Dining has become an event and reservations are morphing into tickets. Tickets cost money. Is the parallel exact? Absolutely not, but today’s restaurants are more similar to yesterday’s cabarets than they are to the eateries where dapper factory lectors brought their switchboard operator girlfriends (or whatever) a century ago.
The food has become the show. Those front row seats should’t be empty.
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