Customer pays $2,138 just to be seated at a New Orleans restaurant

People are buying and selling table reservations at iconic New Orleans eateries for eye-popping amounts via third-party websites, often without the restaurant’s knowledge.

Critics want lawmakers to ban the burgeoning online business they consider a racket, arguing that it undermines the fine-dining experience and could potentially leave restaurants with empty tables. However, proponents of the practice say it benefits both diners and restaurants when done properly.

Some iconic restaurants topped the list during a recent scan of the New Orleans section of Appointment Trader, one of several platforms designed to let people with scheduling conflicts sell highly coveted reservations on the open market. A Saturday night reservation at Brennan’s later this month is available for a suggested bid of $235 — a discount compared to the whopping $2,138 someone paid for a four-top at Antoine’s during the Super Bowl weekend.

Are those prices based on genuine demand for seating at the restaurants, or is it artificially inflated by technology built to cash in on wealthy tourists desperate to dine in the city’s elite culinary corners?

That’s a question Louisiana lawmakers will try to answer in the coming months as they consider House Bill 90, sponsored by Rep. Troy Hebert, R-Lafayette. The legislation could ban companies such as Appointment Trader, Dorsia and Wuw Wuw from operating in Louisiana.

Specifically, Hebert’s bill prohibits third-party companies from offering or arranging reservations at any restaurants that have not agreed to the service through a contract.

Hebert could not be reached for comment, but the Louisiana Restaurant Association, a trade group that asked Hebert to file the legislation, said it is modeled after similar laws recently enacted in other states such as New York. They all describe the legislation as a measure to prevent “restaurant reservation fraud.”

Appointment Trader, founded in 2021, lets users buy and sell reservations and appointments of all kinds through auction-style bidding. Sellers can set their own asking prices, and bidders can make offers at any rate. Additionally, prospective buyers can use the platform as a concierge service, offering a fee to any user who can secure them a reservation at a particular establishment.

In its early days, the platform was limited mostly to hotspots such as New York, Los Angeles, Chicago and Las Vegas. It has since gained popularity and expanded into smaller markets including New Orleans and virtually anywhere else one has a reservation they want to sell. As of Thursday, the platform had clocked over $6 million in trades within the last 12 months.

In a phone interview, Louisiana Restaurant Association spokeswoman Wendy Waren said platforms like Appointment Trader are selling reservations without the restaurants’ permission or knowledge. If no one buys the reservations, tables just sit empty, which can cause seating delays or prevent genuine customers from getting a reservation and actually bringing business to the restaurant, she said.

“It creates artificial scarcity,” Waren said. “It’s like somebody’s hijacking the process.”

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New York hospitality trade groups have accused the platforms of using software bots to snap up reservations and sell them on what they call a “black market.”

Appointment Trader founder Jonas Frey said he is just trying to solve a problem with a legitimate service that can benefit all parties, particularly the restaurants. The 37-year-old software engineer is a German immigrant who came to the U.S. five years ago and came up with the idea for his platform while waiting in a long line at his local motor vehicles office in Las Vegas. He now lives in Miami with his wife and is serious about maintaining legitimacy on his platform, he said.

“I’ve basically lived in a computer all my life, and nothing gives me more joy — well almost nothing — than when thousands of people use the software I built to solve a problem in their life,” Frey said.

In phone interviews this week, Frey explained how users on his platform must sell at least half of the reservations that they post or risk account suspension. This prevents people from trying to book all the available tables and hoard them to create artificial demand. Also, the free-market style platform means that unsold reservations put downward pressure on the prices in a given area, he said.

The app is still quite new in the New Orleans market as there have only been a handful of transactions, so the current 90-day average bid prices have been skewed by reservations sold during special events such as the Super Bowl. Frey said those “one-offs” are not the norm.

In a market such as New Orleans, diners can typically get reservations without paying if it’s a normal weekend, but it can be next-to-impossible at certain restaurants in other big cities across the country. Reservation trading lets people sell valuable bookings that they, for whatever reason, can’t use or no longer want.

When someone has a coveted reservation but encounters a scheduling conflict that prevents them from using it, they might not bother calling to cancel, leading to what restaurants call “no-show reservations.”

Jonas Frey, founder of Appointment Trader. (Submitted)

Just a few no-shows can disrupt a restaurant’s operations and cost it thousands in lost sales. Approximately 28% of American diners have admitted to ghosting on their reservations, according to a 2021 OpenTable survey.

“Wouldn’t it be better for everyone if you could just resell it?” Frey asked.

Lisa Blount, director of marketing for Antoine’s, said she’s all in favor of entrepreneurs figuring out new ways to make money in the restaurant industry. She’s less worried about no-shows because Antoine’s requires credit cards to make reservations, but she does have a few other concerns.

At Antoine’s and other fine dining eateries, the staff take a lot of time to learn about their customers when they make a reservation, Blount said. They might be on a tight schedule, have diet restrictions or could be visiting for a special occasion. This kind of information allows the restaurant to make preparations with food ordering, shift scheduling and other arrangements.

“There’s a lot more to coming to our restaurant than just buying a ticket,” Blount said. “We try to know a lot about you before you even get in the door.”

Blount said she worries that trading or selling reservations to unknown customers could stymie a restaurant’s ability to offer its best level of service. She also said she hates the idea of an unwitting customer paying for a reservation and then showing up and seeing empty tables because it turned out to be a slow evening. The customer would feel scammed, and it could damage the restaurant’s reputation, she said.

Still, Blount said she’s open to the concept of reservation trading if there are ways to control for those kinds of issues.

Frey said he is actively trying to partner with restaurants to make the app better for all parties. His platform currently takes a 30% cut of each transaction, and he offers partner restaurants an equal share of the net proceeds. So far, Frey said he has not landed any partnership agreements as he tries to keep his company alive through an onslaught of state legislation.

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Bans on reservation trading apps are already in place in New York and Arizona, and a similar bill is currently pending in the Illinois legislature.

Some large corporations could lose a chunk of their business if reservation trading catches on. Restaurant booking platforms such as OpenTable and Resy make money by charging restaurants a fee for every reservation customers make through their app.

Platforms like Appointment Trader threaten to disrupt the online booking sector by flipping that business model on its head. Under Frey’s partnership model, restaurants would get paid just to let customers inside.

But all that depends on genuine demand existing in a particular market area.

“There’s so many restaurants here,” Blount said from her New Orleans office. “We’re not New York.”