Crack Down on Restaurant Reservations Scalping

Governor Kathy Hochul today signed legislation to crack down on the ‘black market’ for restaurant reservations. The new law prohibits third-party restaurant reservation services from arranging unauthorized restaurant reservations with food service establishments. This will put an end to a predatory marketplace that placed a cost on consumers before they even entered a restaurant, and made dining inaccessible to those who refused to pay. 

In other words, third party sites scoop up and sell restaurant reservations. Thereby creating a system which it is extremely difficult to get a reservation at a top restaurant without paying a fee for it. If the reservation went unsold then the third-party site would cancel the reservation and the restaurant would lose the meal. 

With the advent of AI, coveted reservations would be targeted and sold for a profit. All without the knowledge of the restaurant. This has led to increasing ‘no-show’ rates at many establishments which has a cascading impact on restaurants. Food and beverage orders, employee schedules, and many other aspects of a restaurant rely on accurately predicting how many customers will show on a given night.

NYC Hospitality Alliance Executive Director Andrew Rigie said, “Restaurant reservation scalping deprives businesses and workers of needed money when the seats do not sell and the table goes empty, and it creates a barrier between them and their customers when unknown guests show up. Reservations are not a hustle for unauthorized third parties to sell for profit.

For the cynical people, what this law does is prohibits reservation scalping without the involvement of the restaurants. The smart sites will include the restaurant in the process and cut them in for a piece of the profit. Time will tell if we are now able to get reservations at the hard-to-get restaurant.

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