Has your restaurant been a victim of reservation scalping? While restaurant reservation scalping has been going on for many years, the problem has gotten worse in recent years, and it’s received much media attention recently, especially with the launch of websites that facilitate the unauthorized sale of reservations, which turned it into a lucrative hustle. Now legislation A10215 (Bores) / S9365 (Fernandez), supported by the NYC Hospitality Alliance was introduced in the state legislature that seeks to prohibit the reservation scalping by requiring that third parties have an agreement with a restaurant to be allowed to facilitate the transaction (whether free or for a fee) of a reservation. We’ll keep you up-to-date as the bill advances through the legislative process and hopefully passes soon. The unauthorized online restaurant reservation market works like this: Third-party platforms directly secure or encourage scalpers to secure reservations at popular restaurants without the restaurants’ permission, and then they facilitate the sale of those reservations for a hefty fee on their websites and apps. These reservation scalpers often use bots to quickly secure the reservations online and take them off the market, so the average human customer can’t get access to that reservation without paying an unauthorized third party. The following are just some reasons why this is BAD for restaurants, workers, and consumers: - Why it’s bad for restaurants? When people and bots secure restaurant reservations and cannot sell them, it results in a “no show” customer, meaning the table goes empty and the restaurant loses out on that important revenue. Restaurants are also in the hospitality business and want to establish ongoing relationships with their customers (their likes, dislikes, food allergies, etc.), so when someone buys a reservation that is booked under someone else’s name and contact information it creates a communication barrier between them and their customer, and it may create other inconveniences such as the inability to contact the customer who purchased the reservation should they mistakenly leave their credit card or another personal item at the restaurant.
- Why it’s bad for workers? When people and bots secure restaurant reservations and cannot sell them, it results in a “no show” customer, meaning the table goes empty and workers lose out on the important tip income they rely on.
- Why it’s bad for consumers? When reservations are secured by scalpers who sell them, it removes table inventory from the market, making it harder for consumers to properly get a reservation at restaurants, and it forces them to pay a hefty fee to an unaffiliated third party for a reservation that the restaurant offers for free.
New York lawmakers have enacted laws in the past to rein in the exploitation of restaurants, workers, and consumers by third-party delivery platforms, and it is now time to enact a new law to stop the predatory business model of this other segment of third-party companies facilitating the unauthorized sale of reservations. This is common-sense restaurant, worker, and consumer protection legislation that will help end the predatory and unauthorized sale of restaurant reservations by scalpers, requiring that third parties have an agreement with a restaurant to be allowed to facilitate the transaction (whether free or for a fee) of a reservation. |
