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Getting into a fancy restaurant 2.0 style

Getting into a fancy restaurant 2.0 style

A reservation for a table in a fancy restaurant is of real value. Some people are dying to get a table at a certain place, yet typically 20 percent of the lucky ones who DID manage to make a reservation, don’t show up. TableXchange spotted this problem and offers people a forum where they can trade the reservations.

People from New York, San Fransisco and the Hampton can sell or buy their reservations anytime, making it possible to get last minute access to a fancy place. A simple yet great idea. How did the founders come up with it?

Red carpetCo-founder William Geronimo tells us the story: “The idea for TableXchange was hatched in an University Bar while being an undergraduate at New York University in 2004. Myself and a group of friends didn’t have money to eat in nice restaurants too often. But on the rare occurance that we did, we wanted to go a nice place and often realized that last minute – or even a few days to weeks in advance – they were booked up. So we would wind up eating at mediocre restaurants and still spending a fortune, which never left anyone happy.”

This all sounds sort of ‘power to the people’ to me. Web 2.0 can make is possible for everyone with a little money saved to make a reservation at the fanciest place. Right?

“In a sense, yes. We simply believe that a reservation is a “real option” to dine and for a long-time people misunderstood the value of this option or abused it by not showing up and making a million reservations. The fanciest restaurants in New York have also put up so many barriers to entry, principally by pricing their food at outrageous levels and making reservations impossible to get. From a strictly economic standpoint it is one of the few things that do not obey the typical laws of supply and demand. As with anything else, as demand for a particular restaurant spikes so should the ‘cost’ of making the reservation.”

This all makes sense. But who are the people on the other side? The guys that make a reservation, and actually sell it on the web?

“First, there is a group of people who tend to make numerous reservations for a given night at the hottest spots, and once they figure out where their friends or loved ones want to eat they would typically cancel or no-show on the others. The other big group is opportunistic young people – lots of college kids – who recognize that they can buy a few reservations and for relatively little effort make 20 to 30 dollars. Obviously we have a number of security measures in place to make sure the system is not abused.”

As you might have sensed already, I’m a big fan of the idea. And I’m pretty sure I’m not alone. Using the web to beat those high-brow reservations managers sounds a bit like a hedonistic revolution to me. How are the restaurants facing their temporary loss? Any complaints yet?

Logo“The restaurants mostly have been fairly mum on the subject, but we know generally they are negative on the concept. We are trying to portray to them that their no-show rate will go down with TableXchange users, because people paying for a reservation are much more likely to show after shelling out $30 for the table. Secondly, having tracked our demographics, the types of people that buy tables have significant disposable income and will often spend additional money in the restaurant: they’ll buy that $200 bottle of wine instead of the $50.”

So in the end, it turns out that both sides win. We can get into a fancy place pretty easy, while they’re making more money. The only losing here, is the obnoxious reservation manager. Yet another reason to love Web 2.0.

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