Podcast Summary
Restaurant Technology: Implementing online reservation systems can lead to a 25% increase in reservations and more customers for restaurants, helping them plan inventory, staffing, and operations more efficiently, ultimately impacting their bottom line.
Embracing modern technology, such as online reservation systems, can significantly boost a restaurant's business. Lisa Blunt, the marketing and PR director at Antoine's, the oldest family-run restaurant in America, joined her husband's team in 2013 and recognized the need to update their reservation system. Prior to this, they relied on traditional methods, which were not effective. By implementing Open Table and Rezi, they saw a 25% increase in reservations within six months. This translates to more customers, which is crucial for the restaurant industry where 80% of businesses fail within five years of opening. Online reservation systems help restaurants plan their inventory, staffing, and overall operations more efficiently, leading to a substantial impact on their bottom line. However, it's important to note that not all restaurants benefit equally from these systems, as some may face issues with reservation scalping.
Antoine's adaptation: Antoine's restaurant, founded in 1840, adapted to changing times by embracing new technologies and preserving its unique charm, attracting notable figures like FDR, Babe Ruth, and Walt Disney.
Antoine's restaurant, established in New Orleans in 1840, evolved from a simple Pensione to a renowned dining destination. Founded by a young French chef named Antoine Alseator, it initially functioned as a place to provide meals for travelers who stayed there. Over the years, with the changing times and increasing popularity, the restaurant was run by successive generations who employed innovative methods to attract customers. Antoine's son Jules used his charisma to draw in patrons, while Roy Alcya Torres, who took over in 1930, initially resisted the introduction of telephones for making reservations. Despite initial reluctance, the restaurant eventually adapted to the changing times and continued to thrive, hosting notable figures such as Franklin D. Roosevelt, Babe Ruth, Judy Garland, and Walt Disney. The story of Antoine's highlights the importance of adapting to new technologies and customer expectations while preserving the unique charm and traditions that have made it a New Orleans institution.
Technology in Restaurant Management: Effective use of technology, such as computerized reservation systems and online platforms like OpenTable, has become crucial for restaurants to optimize operations, enhance customer experience, and ultimately, thrive.
Effective use of technology, especially in managing reservations, has been crucial for Antoine's restaurant in maintaining its success over two centuries. Initially, Antoine's relied on paper calendars for managing reservations, but as technology advanced, they transitioned to computerized systems. This change allowed for more efficient tracking of reservations and better decision-making for the restaurant. Today, Antoine's uses OpenTable to manage its reservations, enabling the restaurant to plan staffing and food needs based on customer data. Moreover, the convenience of online reservation systems is preferred by 65% of diners, making it essential for restaurants to adapt and utilize these platforms. Despite the monthly fees charged by reservation apps, the benefits of increased efficiency and customer satisfaction outweigh the costs. In essence, technology has become an integral part of the restaurant industry, enabling businesses to optimize operations, enhance customer experience, and ultimately, thrive.
Restaurant reservations costs and risks: Restaurants face costs from cover fees and risks from no-shows, affecting approximately 10-12% of reservations, leading to lost revenue. Effective communication and management are crucial.
Restaurant reservations play a significant role in the dining industry, but they come with costs and risks for restaurants. OpenTable, a popular platform for making reservations, may charge a cover fee per person and allow restaurants to pay for a higher presence in their algorithm. However, no-shows are a common issue, with approximately 10-12% of reservations being missed, leading to lost revenue for restaurants. Some customers may make multiple reservations and not show up to any, while others prefer the walk-in approach. Popular restaurants may even have a secondary market for buying and selling reservations. New York City-based writer Adam Isko explored this phenomenon in a recent New Yorker article, "Why You Can't Get a Restaurant Reservation." Overall, the demand for reservations and the challenges they present highlight the importance of effective communication and management between restaurants and customers.
Alternative methods for restaurant reservations: Using high-end Amex cards, reservation apps like Dorsia, or buying reservations from other customers are alternative ways to secure a table at popular or high-end restaurants when traditional methods fail.
Making a restaurant reservation through traditional methods like reservation apps or calling the restaurant directly may not always guarantee success, especially for popular or high-end establishments. However, there are alternative ways to secure a table. For instance, having a specific type of high-end American Express card grants access to a concierge service that can help book tables at partnered restaurants. Another option is using a reservation app like Dorsia, which caters to exclusive customers and restaurants, allowing you to prepay for a meal upfront. Lastly, buying a reservation from another customer through websites like Appointment Trader is another possibility, although it comes with a hefty price tag. These methods provide additional avenues for securing a table at sought-after restaurants, shedding light on the hidden dynamics of the restaurant reservation process.
Restaurant reservation resale market: Individuals can make significant sums of money by selling restaurant reservations on the secondary market, but this practice can lead to empty tables and financial losses for restaurants
The secondary market for selling and buying restaurant reservations, facilitated through platforms like appointmenttrader.com, has become a lucrative business for some individuals. These hustlers, often college students or hotel concierges, can make significant sums of money, estimated to be between $70,000 to $80,000 annually, by selling reservations for a premium. They may make these reservations themselves or use bots to secure them faster than humans. However, this practice poses a significant problem for restaurants, which can face empty tables on busy nights due to resold reservations that don't get filled. This can result in substantial financial losses and impact the overall profitability of the establishment. This issue isn't limited to New York but extends to other cities with thriving food scenes, such as Las Vegas, Miami, and LA. The resale market might not last long, but its impact on the restaurant industry is already substantial.
Restaurant reservation fees: 25% of NY restaurants on Rezi charge cancellation fees, some economists suggest treating tables as commodities and charging for them, NY State lawmakers passed a bill to ban resale of reservations without consent, cancellation fees seen as valuable revenue source for operators
Restaurants are implementing strategies to combat the issue of bots making reservations and online resellers. These strategies include cancellation fees and even charging for reservations themselves. While some consumers find cancellation fees to be a barrier to entry, many restaurant operators see them as a valuable source of additional revenue. In New York, 25% of restaurants on Rezi, a reservation platform, charge cancellation fees. Some economists argue that tables at high-demand restaurants should be treated as commodities and charged for, but most chefs and owners prefer to keep their restaurants democratic. In response to these issues, New York State lawmakers passed a bill that would ban the resale of reservations on third-party services without the restaurant's consent. This is a first-of-its-kind piece of legislation intended to combat the secondary market for reservations. The bill is still awaiting the governor's signature. Overall, the restaurant industry is exploring various ways to manage the challenges of online resellers and bots, with cancellation fees being a popular solution for now.
Technology in Restaurant Reservations: Technology is transforming restaurant reservations through apps like Tables with a Z, reducing wait times and monetizing seating. Some restaurants opt out for line-waiting services and buzz, leading to a mix of benefits for consumers and businesses.
The restaurant industry is adapting to changing consumer behaviors and preferences in various ways. One such adaptation is the use of technology to monetize seating and reduce wait times through apps like Tables with a Z. However, some restaurants opt out of reservations to manage overhead costs and generate buzz, leading some diners to pay for line-waiting services. The overall impact of reservation apps has been positive, bringing in more and different diners, particularly in cities like New Orleans where foodie experiences are sought after. Restaurants are leveraging technology and open dialogue to enhance the dining experience and meet the evolving needs of consumers.
Personal touch in restaurant reservations: Despite the convenience of technology for managing reservations, making personal phone calls adds a personal touch and creates a sense of power and intimacy for customers.
While technology like OpenTable can be incredibly useful for managing restaurant reservations, there's still value in the personal touch of making a phone call to confirm reservations and build a connection with customers. Lisa Blunt, the general manager of Antoine's, uses OpenTable extensively but still prefers to make personal calls to her customers. This approach not only helps Antoine's stand out but also creates a sense of power and intimacy. Meanwhile, we learned about an unusual restaurant feature from the past - a 25-foot pond with swans inside a table at Domenico's. This just goes to show that unique experiences, whether old or new, can leave a lasting impression on customers. For the Economics of Everyday Things, I'm Zachary Crockett. This episode was produced by Julie Kanfer and Sarah Lilly, and mixed by Jeremy Johnston. We had help from Daniel Morris-Raphson. The Freakonomics Radio Network. The hidden side of everything.