3rd party reservations unappetizing to restaurants and customers

When the pandemic ended, consumers went out of their way to satisfy their pent-up desires to dine out and travel. Demand for reservations at hot restaurants grew, making them even harder to get. As a result, they became a commodity to be resold, and five years later those third-party reservations remain troubling for operators and consumers.
 
Technology has made it easier for individuals and companies to scoop up reservations from restaurant websites or restaurant-approved reservation sites, like they do with high-demand concert tickets. The brokers then sell the reservations on unauthorized online resale sites and social media. 

“The more technology helps us find efficiency in our daily lives, the more it also creates new ways for people to game the system,” says Mike Whatley, the National Restaurant Association’s vice president of State Affairs and Grassroots Advocacy. “We saw something similar in the early days of third-party delivery, when some companies were putting restaurants on their platforms without contracts or permission from the restaurant. It created chaos for the restaurants and consumers. To solve this, many states took steps to regulate the relationship between the operator and the delivery companies to give control back to the restaurants. We believe the same kind of relationship between reservation resale sites and restaurant operators should be required here.” 

Dealing with no-shows and managing expectations

This disconnect in the reservation process is causing operational challenges for restaurant operators, like costly no-shows. It’s also requiring staffers to not only manage the expectations of customers who purchase the reservations – sometimes paying hundreds of dollars – but the potential damage to a restaurant’s brand and reputation as well. In addition, they’re making dining out at certain restaurants artificially more expensive, and reservations practically impossible to obtain.  

“These third-party reservation sellers contribute nothing to the dining experience,” says Steve Woodruff, general manager of Commander's Palace in New Orleans.  “They don’t make the food better, the service more seamless, or the atmosphere more enjoyable. They simply make it more expensive and frustrating—for everyone."

As this emerging black market proliferates across the country, customers are growing frustrated with the practice, and restaurant operators are concerned about their loss of control over customer connections. To address this, state governments are working with the restaurant industry to create a regulatory framework to fix the system and give back control of reservations to restaurants.  

In a survey of diners who’d recently visited a full-service restaurant, nearly 2 in 5 of them were aware that third-party websites had charged diners for reservations. In fact, almost 15% said they’d been charged for reservations.

According to the research, more than two-thirds of consumers said unauthorized third-party restaurant reservations are harmful and are worried about the impacts unauthorized reservation companies are having on restaurants and their customers. Another 7 in 10 said they support legislation to prevent the unauthorized sale of reservations in their cities. 

Taking back control

"What these third-party reservation scalpers are doing is not helping restaurants,” says Rob Mosher, co-owner of Monteverde in Chicago. “It’s an entirely separate business that exploits the system without contributing to the experience in any way. Restaurants are built on hospitality, on making people feel welcome, and on ensuring they have an incredible experience from the moment they walk in. When third-party scalpers and bots scoop up reservations, it completely negates that. Guests go online, see no availability, and assume they’re shut out. We want people—whether they’re locals or visitors—to be able to book a table easily, without extra fees, without insider knowledge, and without jumping through hoops just to enjoy a meal with us."

In 2024, the state of New York was first to regulate the relationship, passing the Restaurant Reservation Anti-Piracy Act, which requires third-party online reservation sites to enter into a written agreement with restaurants before being able to list reservations. Florida, Hawaii and Nevada have passed similar legislation, while bills in Louisiana and Illinois await their governors' signatures. The California and New Jersey legislatures are still considering provisions.

Whatley says he’s encouraged by the number of legislative wins this year. “Customers and restaurants want the system fixed so that it’s fair and works for everyone.”