Marketing

New York restaurants take aim at reservations pirates

The state's restaurant association has joined forces with lawmakers in hopes of preventing third parties from scarfing up reservations and reselling them, with none of the proceeds going to the restaurants.
The legal scalping can significantly drive up the cost of a dining-out occasion. | Photo: Shutterstock

Restaurants in New York are joining forces with state lawmakers in hopes of stopping third parties from scooping up hard-to-get reservations and reselling them at a profit.

The New York State Restaurant Association (NYSRA) said Monday that it’s backing a bill that would require the legal scalpers to obtain advance permission from a restaurant before they essentially act as a reservations reseller. The legislation, known as the Restaurant Reservation Anti-Piracy Act, has a sponsor in both chambers of the state legislature.

The proposal is believed to be the first of its kind in the nation.

The NYSRA alleges that the practice, enabled by new digital technology, wrests control of restaurant dining rooms away from their host establishments and forces patrons to navigate what it characterizes as “a shady black market.”

Because customers pay for the reservations, the practice also hikes the cost of dining at a restaurant, a significant detriment given the resistance consumers are already showing to the soaring price of a dining-out experience.

In addition, places whose seatings are scarfed up electronically by third parties tend to see a high incidence of no-shows from the buyers of the reservations, costing the establishments much-needed revenues, according to the NYSRA. Yet the resellers don’t share the pain because they’ve been paid already.

“These tables are hard enough to secure,” Melissa Fleischut, the NYSRA’s CEO, said in a statement. “Now, diners are contending with AI software and bots to get available seats—and paying extra just to get a table.

The high-tech systems lock up the reservations in big blocks as soon as the settings are available online, and then offer them to the public via auction.

State Sen. Nathalia Fernandez is championing the legislation in the legislature’s upper chamber, and Alex Bores is sponsoring it in the Assembly.

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