« Any way we can, David? | Main | Let's see one ISP come out against the two-speed Internet »


James MacAonghus

I knew someone who ran a market in reservations for The Ivy. As long as you were happy to appear under imaginary names, he could "sell" you a table.

I didn't understand your point though. I don't see how OpenTable changes the ages-old process of booking. OpenTable won't magically make tables at the Fat Duck appear.

I use OpenTable because as a geek I'd rather book online than talk to someone on the phone. Not to mention it's usually quicker. I have no allegiance to OpenTable and no interest in what they do - they are just an app on the restaurant website and if the restaurant wrote their own, or used the same app from someone else, I'd click on that. It is all the same to me.


James - if you don't know what I'm on about I've obviously not said it right. I'll have another go tomorrow.


It's such an obvious idea I can't help but wonder if it's already been tried! It strikes me that an individual restaurant could, if it was usually in a position to turn potential customers down, try charging for reservations without disadvantaging itself (though obviously this only creates the primary market, the secondary market would have to wait until the idea gained traction).

My fear is that if restaurants did start charging for reservations, booking a table would quickly become as soul-draining an experience as booking a flight, and diners would have to deal with 'table touts' (granted, in the rarefied world of economics, touts are a force for good...).

Nourishing food for thought in any case - thanks. Have started a discussion on it over at Citywire (http://www.citywire.co.uk/money/markets-in-everything-restaurant-table-reservations/b450448) - will be interesting to see the response.


I'm not sure this is true for all restaurants since reservations generally aren't a scarce commodity.

A reservation at the Ivy might be scarce but in my experience getting a reservation at the other 95% of restaurants isn't hard.

What is scarce is my time. OpenTable and others provide an aggregation service that has value for the customer.

If I know I want to go to the Ivy then I can call them and (try to) make a reservation and might fail. However, if I want to find a restaurant near the theatre I'm going to, for example, then reservations in aggregate aren't scarce. Reservations might be scarce at a particular restaurant but I don't want to spend time calling any given restaurant to find out if they have space when OpenTable already has that information for me.

Your proposition that reservations have value has some merit, but I think that at present the value of the reservation for 95% of restaurants is less than the transaction costs.

Account Deleted

Wow, I realize that the demand and supply situation is skewed in favor of the restaurant owners.

But if Opentable or any such aggregators are the need why can't restaurant owner demand a share of the booty that Opentable collects. A combined bargaining power will work.


Michael - interesting point, but we are talking about disrupting Opentable which caters to 14k restaurants. There are - I see from a glance at the first result on Google - about 800k restaurants in the US alone. So Opentable doesn't even handle bookings for 5%. Admittedly we don't know the crossover though.

Sringaneshr - collective bargaining could work, of course, which seems to be what the original article I linked to was proposing.

Rich - thanks for the link. And welcome to Twitter, I think - I seem to have been your third tweet!


The restaurant would not benefit from a secondary market in reservations in any case. You may profit from selling a reservation, but that does not guarantee that the diner you sell to will spend as much as you would in The Ivy. Indeed, if we presume you booked The Ivy to commit a Food And Splishy Error, and whoever you sold it to bought your reservation in order to breathe the same air as a B-List Celeb, it's likely they'll pay The Ivy less than you would, unless The Ivy works out a way to sell celebrity-tainted air.

For the most part, though, Opentable is not in the business of turning Glutton reservations into Celeb-chaser reservations, they are the business of turning lossmaking empty tables into profit-neutral online reservations. If our restaurateur in SF feels that Opentable is converting more profitmaking tables into profit-neutral tables than it is converting lossmaking empty seats, well, he just needs to stop using the service, because he doesn't need it. Oh look. He did stop using it. Well done him.

The comments to this entry are closed.

Related Posts Plugin for WordPress, Blogger...