Have you ever tried to make a reservation at the hottest restaurant in town only to be turned away time and time again?
You’re not alone.
To be sure, the low- and mid-priced restaurant businesses have struggled recently: McDonald’s (MCD) saw its U.S. sales decline in the second quarter, and Dine Brands’ (DIN) U.S. IHOP and Applebee’s sales fell 1.4% and 1.8%, respectively.
But fine dining, like the kind found on online reservation apps like Resy and OpenTable (BOOK), is seeing a rise in business: American Express (AXP) expects to spend $100 billion on food and beverage alone in 2023, Resy CEO Pablo Rivero told Yahoo Finance in an interview. (American Express acquired Resy in 2019.)
These are better days: An employee outside Carbone’s American Express and Resy sponsored outdoor dining area in New York City on November 29, 2020. (Alexi Rosenfeld/Getty Images) (Alexi Rosenfeld via Getty Images)
The $100 billion in restaurant spending is a record for American Express, meaning it’s on top of the “pandemic revenge” spending spree that has taken place in 2022. AmEx’s wealthy cardholders love to eat out; it’s a “passion area” for them, Rivero said, and that demand is translating into increased restaurant bookings on the Resy app.
Now in its 10th year, Resy recently surpassed 600 million bookings on its platform.
But Rivero said even high-end, trending restaurants are not without their challenges: Restaurants are struggling with rising rents, escalating food prices and labor costs, and the challenges vary from city to city.
At the same time, Rivero noted that new restaurants are still opening. New concepts like Resy’s Misipasta, which opened on Governors Island in New York, are also very popular and target a demographic willing to pay $450 for a seat, he said.
Why can’t I make a reservation?
Would you pay $450 per seat? Misi Pasta and Governors Island Pasta collaborate with Resy (Photo: Resy) (Resy)
Resy’s booking business has a dark side, with numerous complaints about bots flooding the online system, snatching up booking slots and reselling them at exorbitant prices.
In his final column, New York Times restaurant critic Pete Wells lamented the loss of personal touch at restaurants that have adopted online reservations or prepaid dining systems through other apps.
Reggie and Rivero said they’re fighting bots and “reservation fraud” in general, which they hope will alleviate some of the frustration felt by diners in high-traffic urban areas. Rivero wouldn’t say how the app is fighting bots, but other companies have done so by blocking certain IP addresses, tightening login procedures to keep out virtual users, or using third-party security services.
Customers aren’t the only ones affected by booking bots and scalpers: restaurants also suffer from unused reservations.
The story continues
Chef Mario Carbone speaks onstage during day one of American Express Presents Carbon Beach at Carbone in Miami Beach, Florida on May 5, 2022. (John Parra/Getty Images, Courtesy of Carbone Beach) (John Parra via Getty Images)
As patrons complained about bots, scammers, and not being able to get into new hotspots, Rivero tried to steer the conversation away from those complaints and towards how Resy could help users make reservations at lesser-known, low-key restaurants that are talked about locally but not widely known.
“How can we help? [restaurants] We aim to connect with more customers. We launched a new version of the app that lets you discover local restaurants that you may know. In other words, our focus is on connecting restaurants with customers and encouraging customers to go and try new restaurants.”
Resy says it is developing software that will help users identify hot spots before they are featured on food blogs such as Eater and Grub Street.
Translation: Trying a new hidden restaurant also means the possibility of securing an 8pm reservation, even on a Saturday night, making for happier Resy users.
As for “neighborhood hotspots” or hidden, out-of-the-way places you might sleep, Rivero outlined some options in New York City and Miami in the video above.
Pras Subramanian is a Yahoo Finance reporter covering the auto industry. X And on Instagram too.
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