Restaurateurs call out reservation scalping trend: Fighting for our lives

Some individuals have turned reselling dining reservations into a profitable business.However, it is coming at a cost to both diners, who struggle to secure spots on platforms like Resy, and restaurants, which argue that these people are siphoning away their revenue.Lawmakers are working to dismantle third-party reservation services – such as Appointment Trader or ResX – that they argue are exploiting the reservation process and creating an unfair system.Platforms like Resy, owned by American Express, are also working alongside lawmakers and the National Restaurant Association to help “amplify” issues the most in-demand restaurants are facing, Resy CEO Pablo Rivero told FOX Business.The company said the issue is not unique to only high-end restaurants, but ones that are in high demand.New York was the first to take action against these services by passing the Restaurant Reservation Anti-Piracy Act.The legislation bans third parties from selling restaurant reservations without the establishment’s consent.The law went into effect in mid-February, and now California lawmakers are poised to follow suit. “Especially in New York, we’re just fighting for our lives,” Amy Zhou, executive director of operations at Gracious Hospitality Management, told FOX Business.

The management company owns and operates Michelin-starred COTE Korean Steakhouse restaurants in New York City, Miami and Singapore, as well as New York-based cocktail lounge Undercote and fried chicken restaurant Coqodaq. Zhou said restaurants typically see about 5% to 10% of their books no-show in a single night.In 2023, that jumped to 25% “seemingly overnight,” she said.Profit margins in the industry range between 5% and 10% when things are going well, so “if a quarter of your book doesn’t show up, that’s almost your entire profits that have just gone down the drain,” Zhou added.Zhou, who has worked in the business for more than a decade, said people program bots to understand ...