Black market for reservations irks restaurateurs
A little-known but fast-growing website selling coveted reservations at the country’s top restaurants for hundreds of dollars — and in some cases thousands — has caught the attention of restaurateurs and big-name reservation companies.
This black market for many of the dining industry’s most sought-after seats, from New York City’s Carbone to Yountville’s the French Laundry, exists on a crude-looking website called Appointment Trader, run by a serial entrepreneur out of Miami. Anonymous sellers list reservations and share in the profits with Appointment Trader, which claims to have sold $1.2 million in reservations in the last year.
Its growth has frustrated prominent reservations platforms like Tock and OpenTable. Tock is considering legal action against Appointment
Trader, said founder Nick Kokonas, while OpenTable’s legal department has asked Appointment Trader to remove its affiliated restaurants from the website with no success, according to Appointment Trader founder Jonas Frey. OpenTable said it’s “actively investigating” the platform.
Concerned restaurants, meanwhile, have sent ceaseand-desist letters to the website, Frey said. Several Bay Area restaurant owners were unaware their businesses were listed on Appointment Trader until The Chronicle reached out for comment.
Selling restaurant reservations, like scalping concert tickets, is far from a new trend. Many high-end restaurants require nonrefundable, prepaid reservations, so someone who books in advance and then can’t make it for whatever reason must transfer the booking or eat the cost. In turn, unofficial networks and companies have cropped up to meet demand, from Reddit sales and Instagram pages to a 12,000-member Facebook group dedicated to buying and selling French Laundry reservations. In New York City, a group of investment bankers offered trendy reservations for free via online group #FreeRezy until it was shut down by reservations website Resy earlier this year. Resy itself got its start by partnering with restaurants and selling access to coveted tables.
Frey, a 34-year-old German native living in Miami, understands why the website gets a “hostile” response from restaurants and reservations giants. He expects to get hit with a lawsuit at some point. But he believes the website is helping, not harming, the industry by filling empty seats with enthusiastic diners and preventing noshows.
“We’re not a bot scalping website,” he said. “I actually think we’re contributing to this industry.”
How a reservations black market was born
Appointment Trader was born at a Department of Motor Vehicles office in Las Vegas last year. Frey wanted to design a solution to the difficulty of getting a DMV appointment during the coronavirus shutdown. Realizing that the idea of selling time slots could also apply to restaurants, Frey set out to “automate luxury” by making the pricey access of a high-end concierge available to the masses.
On Appointment Trader, people who book a nonrefundable restaurant reservation but then cannot go can sell it — and turn a profit. Or, diners looking for a specific booking that’s not listed on Appointment Trader can seek one by offering financial “rewards,” such as $125 for a table for two at the Michelinstarred Atelier Crenn in San Francisco on Nov. 29 between 6 and 7 p.m. They might be able to snag a reservation from someone who already booked a reservation for that time, or sellers might try to get those tables for the extra money, Frey said. A website FAQ states that Appointment Trader is not affiliated with the restaurants.
For prepaid reservations, Appointment Trader takes a 20% cut. For bookings that aren’t prepaid, the fee is 30%. The website also lists restaurants that use free reservations but are highly competitive, such as San Francisco’s Rich Table, and people can bid for them.
On the back end, Frey tracks cell phone data to measure how many times people go into restaurants across the world. He uses this, as well as weather, holiday, search and event trends, to create a “popularity score” that predicts how valuable a table on any given night might be. Bids for a reservation at the French Laundry on Tuesday, Nov. 29, for example, started at $200 compared with $2,300 for Friday, Dec. 2. (The $200 cost is actually a steal, given prepaid French Laundry reservations start at $350 per person.) Miami restaurant reservations that were selling for $70 a few weeks ago are going for $500, Frey said, because international art festival Art Basel starts this week.
Frey said the company never books and resells reservations, nor does Appointment Trader use bots to scrape data and scoop up coveted reservations en masse. Instead, anonymous users sell the reservations, and some “probably” use bots, Frey acknowledged. Frey tries to prevent scalping, which he called “the virus of capitalism,” by blocking sellers who “appear to upload reservations for the sole purpose of reselling them,” the website states.
Appointment Trader’s sellers make as much as $17,000 in a month, according to Frey. Some of them are hotel concierges booking multiple reservations in a single day at hot spots like Carbone to make extra cash, Frey said, while others he’s reached out to are Realtors, professors and psychologists working a side hustle. When they successfully sell a reservation on Appointment Trader, an encouraging message pops up on their screens: “Make it rain!”
Bay Area chefs are confounded
Appointment Trader hasn’t gained a lot of traction in the Bay Area. But some Bay Area restaurants are popular on the website, according to Frey: three-Michelin-starred finedining destinations where it’s notoriously difficult to score a table — the French Laundry, San Francisco’s Atelier Crenn and SingleThread in Healdsburg — as well as San Francisco hot spots Rich Table and Flour + Water.
David Barzelay, owner of Lazy Bear in San Francisco, didn’t know his Michelin-starred restaurant was listed on Appointment Trader but wasn’t surprised. There’s been a “gray market” for Lazy Bear tickets since it started as an underground supper club more than a decade ago, Barzelay said.
In lieu of reservations, Lazy Bear releases $275 tickets once a month that are nonrefundable but transferable via Tock. This helps keep restaurants in the loop about who is showing up and if they have any dietary restrictions or special needs, Barzelay said.
“I hate the idea of someone being scammed out of their money when trying to purchase Lazy Bear tickets, but I also think that risk should be pretty obvious to people if they are trying to purchase through unofficial channels,” he said. “If customers pay more, that may create higher expectations that we aren’t designed to meet, but that’s the flip side of selling nonrefundable tickets.”
Other owners were shocked to see their restaurants listed on a website they had never heard of, then confused by a website so elementary-looking that people on Reddit question whether it’s a scam.
“What the actual f—?” David Nayfeld of San Francisco Italian spot Che Fico said after learning the restaurant was listed on Appointment Trader. “Is it bots?”
Frey may have a hard time overcoming this kind of reaction. He said he set out first to grow Appointment Trader, then to work directly with restaurants one day in the future — but his approach has almost certainly contributed to growing friction. He’s refused most restaurants’ requests to be taken off the website. He initially removed acclaimed Chicago restaurant Alinea at the request of Tock and Alinea owner Kokonas, but the restaurant is back on the website. Alinea is not honoring reservations booked through Appointment Trader, said Kokonas. Tock is “taking action to notify customers who show up” on Appointment Trader, he said.
Frey has recruited one official partner to date: Call Me Gabby, an Italian restaurant in Miami that he frequents. The restaurant, which has a link to Appointment Trader on its home page, lists reservations directly with the company and gets 70% of any sales.
“We feel that we’re partners with the industry,” Frey said. “I think the industry doesn’t feel that, but we do.”
Kokonas says the rise of Appointment Trader could be attributed to pent-up demand due to the pandemic, which restaurants across the country are struggling to meet amid labor shortages and rising costs.
“Post-COVID demand is so high to go out, even with all the economic issues we have right now,” he said. “Anytime there’s a supply-demand imbalance, there are people figuring out how to make a dollar off of it.”