Show Us the Money

Are pay-to-play restaurant reservations and booking services here to stay?

Asking diners to open their wallet before sitting down to a meal is gaining ground. But the dining public still needs convincing. 

Milwaukee restaurateur Dan Jacobs understands the crippling effects of no-shows and last-minute cancellations. By securing reservations with advanced payments or deposits on meals, online restaurant reservation systems such as Resy and Tock are eliminating one of the costliest variables in running a restaurant. 

When Jacobs and his partner, Dan Van Rite, opened EsterEv, he turned to Tock to secure advance payment for its 40 seats. Within months, however, the restaurant reverted to OpenTable, whose online restaurant booking also offers marketing muscle and collects data about diners like Resy, Yelp and Reserve. 

“Paying in advance was not what our guests wanted,” Jacobs notes. “I’d love it if we evolve to where we can go back to Tock, but you can’t ignore customers.” 

Restaurateur Nick Kokonas, who revolutionized the industry when he introduced Tock in 2014, says Milwaukee – or any city – is ready for Tock’s capabilities, including instances where up-front cash is part of the pact. While its 600 restaurant clients are dwarfed by 45,000 that use Priceline-owned OpenTable, he says that a vastly improved product, high degree of restaurant-controlled customization and 24/7 customer service will continue to drive growth around the world. 

On the Clock

The good news for Tock is that some high-profile restaurants, including French Laundry, Eleven Madison Park – as well as Alinea, Aviary and Next, of which Kokonas is a partner – use Tock. Sports fans and concert goers pre-purchase tickets and agree to non-refundable contracts, so why shouldn’t restaurants do the same? Tock’s online booking system comes with advantages: no-shows are virtually nonexistent, while food purchasing/prep and restaurant staffing can be controlled as the number of covers is known. Plus, money is banked before guests walk in the door. Pre-payments are only one option on Tock. Clients can also choose industry-standard bookings or deposits that are later applied to the diner’s tab. Kokonas says that pre-paid reservations represent only a sliver of the business, making sense only when demand for tables exceeds supply – i.e., red-hot restaurants with prix-fixe menus. “A restaurant that often has empty seats would not be the right candidate,” he cautions. With roughly 2,500 U.S. restaurant clients, Resy holds a middle ground, size-wise, between OpenTable and Tock; it pins growth to e-capabilities on its website and app. Launched last spring, a revamped site and app allow guests to book more simply. For operators, a restaurant inventory optimization program “helps minimize gaps between reservations,” said a company spokesperson – in other words, fill tables at all hours. Resy, too, offers pre-pays and deposits as options and like Tock, it has a wait-list option that can help fill tables when reservations are canceled. Flexibility among such platforms is important, such as allowing the diner to apply the deposit when a missed reservation is rebooked, considering the cost of OpenTable’s $1 per reservation charge. 

Up with Down Payments

Christopher Muller, professor of the practice at Boston University’s School of Hospitality Administration, says technology is driving change. “We’re the industry that stands with arms outstretched saying, ‘Come in, come in.’ We do it for free. Hotels and airlines don’t, and that helps consumers accept it from restaurants.” This summer Tock struck a partnership with Chase and Chase Pay that Kokonas says will extend reach and raise visibility. The company also picked up McDonald’s as a client, not for its burgers and fries but for special events at its new Chicago headquarters, a sign that the times may, indeed, be a changing.