Restaurants turn to pre-pay reservations
At noon on a recent Wednesday in May, San Francisco’s Lazy Bear restaurant began taking reservations for June. Just 45 minutes later, nearly every seat for the entire month was sold out.
Not reserved. Sold. As in, every meal for almost every seat for a month paid for in advance.
That’s because Lazy Bear uses an increasingly popular ticketing system model for its “reservations” that asks diners to pay upfront for meals much the way theatre patrons pay for their seats. The tickets cannot be refunded or changed, though they can be given to someone else, much as one could with tickets to a concert or a baseball game.
Lazy Bear and other restaurants across the U.S. are using technology to change the way customers book and pay for restaurant meals, and maybe even the way they think about eating out.
“The main issue is trying to manage risk, trying to incentivize patrons to keep their reservations,” said Northwestern University microeconomic theorist Jeffrey Ely, noting that ticketing systems transfer all the risk to the diner. “These are things that have always been goals or needs of the restaurant market. The only reason they’re now manifesting themselves is that the technology is there.”
Restaurant-goers have been making online reservations since the advent of Open Table in the late 1990s. But platforms such as ticketing and a bevy of new apps — think table auctions and a digital concierge — could mean more seats for eager diners and fewer empty tables for restaurants.
The ticketed reservations model was pioneered in 2011 by Nick Kokonas, co-owner with Grant Achatz of the innovative Chicago restaurants Next, Alinea and The Aviary. Kokonas said this summer he expects to release a commercial version of the computer software he uses called “Tock.” Tock will allow restaurants to manage table inventory and create different types of tickets, from fully prepaid meals to ordinary reservations. For example, one variation would let restaurants collect deposits during the reservation process that later would be applied to the food and drink tab.
“When people buy a ticket or put down a deposit they show up at a much greater rate,” said Kokonas, who estimates the number of people who ditch unpaid reservations at about 10 per cent.
Restaurants in nine U.S. cities are testing the system, Kokonas said. When Tock is ready to go, he expects to offer the program to restaurants for a flat fee of $695 per month.