Reservations abound over Web-based table bookings

Nation's Restaurant News,  Oct 29, 2007  by Elissa Elan

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NEW YORK -- Manhattan restaurateurs are expressing serious reservations over the growing number of Web-based businesses selling access to this city's hottest restaurants, saying the services devalue the dining experience and have the potential to hinder sales and congest waitlists.

Websites such as Table XChange.com and PrimeTime Tables.com offer members the ability to buy reservations at popular restaurants like Babbo and Gramercy Tavern. At Table XChange.com, an online community of buyers and sellers, reservations at restaurants in New York or the Hamptons go for as little as $15 and as much as $40. PrimeTimeTables.com charges an annual fee of $500 and $45 per reservation and claims access to reservations at hot restaurants in Philadelphia, New York and the Hamptons. Similar sites featuring eateries in other big cities also are popping up. At Table Pronto.corn, which was launched this month, reservations can be purchased at hard-to-get-into restaurants in Los Angeles and Las Vegas for $10 to $25.

"We passionately don't like the process because, first and foremost, it changes the value equation of our value business," said Richard Coraine, chief operating officer of Union Square Hospitality Group, which runs such higher-end establishments as Union Square Cafe, Gramercy Tavern, Eleven Madison Park and Tabla. "We feel we charge an appropriate amount of money for our food and wine. If something extra is added on--if someone pays $100 for a reservation--then they're already going in plus 100 in their minds. We want to set the entire value equation, and this totally skews it for us."

Gabriel Erbst, a former banker who with two partners launched TableXChange.com this summer, said his website is providing a service to foodies who want to eat in the city's hot spots, usually on weekend nights, but don't want to wait the requisite month or longer to score a table for two or more.

"When we started, my partners and I were all finance professionals and huge foodies, but more often than not we were still in the office at 10, 11, 12 o'clock at night because work was so hectic," he said. "We realized there were lots of people in finance who don't make reservations four days in advance and were completely locked out. I knew if there was a restaurant I wanted to go to that was completely booked, I'd pay $20 bucks [to get in.]"

The TableXChange.com site, which Erbst said operates like a "marketplace for buyers and sellers" of restaurant reservations, has a number of governing rules and regulations. For example, members who post their reservations for sale are the ones who set the price, not the site's founders, he said. He also noted that he and his partners are not the ones who reserve the tables sold on the site.

In addition, no reservation sells for more than $40 or less than $10. Prices go up in $5 increments at the seller's discretion.

"Lots of times the reservations only sell for $15 or $20,"he said.

Registered users of the site can post their reservations for free, but the site charges a 10-percent commission on sales, which Erbst noted covers his costs. He further indicated that all sellers whose reservations remain unsold are responsible for canceling them.

"We remind them to notify the restaurant on three separate occasions if they cannot use the reservation," he said.

Buyers, who can search the database of around 100 restaurants by date, time and name before purchasing a reservation, are obligated to use the name under which the reservation originally was made and cannot make any changes to it. Furthermore, the website expressly states the company is not "affiliated with any of the restaurants ... listed."The website also recommends that the buyer does "not mention TableXChange to a restaurant for any reason," and that it will resolve all issues that may occur as a result of the purchase. Erbst, who, along with his partners, recently was named to BusinessWeek magazine's "Top 25 Under 25" list, further indicated that buyers are asked to contact the restaurant and confirm their reservations.

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At Peter Luger Steak House, the high-end steakhouse chain based in New York, Jodi Storch, vice president of operations, said she was unaware her restaurants were even listed on the TabelXChange.com site and was not happy upon discovering it.

"It sounds like you're buying a ticket to a hot concert, like buying from a scalper," she said. "I don't think it's in any restaurant's best interests. It's not right. You want to be fair to your customers, and ours really make an effort to call early. People call months in advance for a Friday or Saturday night, and I want my customers to have an equal opportunity to get a reservation without having to pay for one."

But while restaurateurs are none too happy about the reservations websites, operators appear to have little recourse.

According to the Manhattan District Attorney's office, brokering restaurant reservations at a price is not illegal.