There's nothing new about restaurant reservation apps. Calling a restaurant to speak with an actual person was long ago replaced by sites like OpenTable and Yelp Reservations. But now, new dining apps promise access to tables at popular restaurants at peak hours -- at a cost.
Resy and Table8 have both recently launched in Miami. Both work with about a dozen or so Miami restaurants like Khong River House, Cleo, and Mignonette, and both allow you to reserve tables at those establishments. The difference between these newbies and OpenTable are the fact that your reservations are either free or not, depending on the day and time of your desired meal. For instance, a recent search showed a two-top available for 8:30 on a Saturday at Khong River House required a $10 fee on Resy and was free on Table8. Through Table8, a 9 p.m. reservation at Juvia for the same evening will cost $20.
The question becomes, who would pay for a table at Miami restaurant?
Table8's founder, Santosh Jayaram, says his audience consists mostly of business travelers, with some locals mixed in. The cities that Table8 serves, like D.C., San Francisco, Los Angeles, and now Miami, are filled with executives and conventioneers with expense accounts and little free time to research decent restaurants in the area. The app is also part of Concur Technologies, a leading provider of travel services for Fortune 2000 companies. That means that a travel planner at a major corporation can now book airfare, hotels, a car, and dinner in one fell swoop.
Jayaram says that Concur approached Table8 during the funding stage, saying their research showed that out of a $35 billion business travel industry, about $8 billion is spent on dining. They didn't have a horse in the dining race.
Jayaram points out that restaurant owners like business travelers saying, "a restaurateur told me recently that a good week is when my restaurant is full, but a great week is when my restaurant is filled with business travelers."
He says that these busy executives are happy to pay extra for the curated access an app like his provides. "Our restaurants are fantastic and if they're on the list, they're guaranteed to have prime time seating."
Jayaram admits that although he knows good food when he eats it, he's not a foodie, so he's enlisted the guidance of a San Francisco/Bay Area Zagat editor, Virginia Miller, to help choose the restaurants, with about 20-25 different restaurants being the sweet spot -- not too many choices, but enough for a good selection.
How, exactly, does the pricing work? Jayaram was quick to point out it's not like Uber Surge pricing, although it sounds like it. "Our prime time in San Francisco is 7 to 8 p.m.; in Miami it's 8:30 to 9 p.m. That's when we typically charge for a reservation."
So, is this a virtual method of the age-old method of greasing a palm with a $20 to get a table in a packed restaurant? Jayaram says yes, in a way. "I believe you can still do that. However, there are places where you can't. There had never been an application that marries both curation and availability."
It comes down to what you think things are worth. Jayaram points out that many services, like flights and hotels, have different levels of pricing and restaurants are behind in this concept. "I can get a flight last minute, I can get a hotel last minute, but God forbid if I want a restaurant reservation last minute. Restaurants take a tremendous amount of risk on lost seats and lost traffic because you, as the customer, have the ability to cancel without penalty. If you balance it all out, this makes sense. Because once people are happy, suddenly you've made an incredibly lucrative and loyal customer."
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