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New York law aims to kill 'black market' for restaurant reservations
By
Catalina Gonella
Published Jan 7, 2025
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By
Catalina Gonella
Published Jan 7, 2025
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Scalping restaurant reservations is about to become illegal in New York.
The Restaurant Reservation Anti-Piracy Act, which goes into effect in mid-February, will prohibit third-party services from arranging reservations without an establishment’s permission. It was created in response to what officials describe as a “black market” in which restaurant reservations are scooped as soon as they are posted and then sold for a premium.
Scalping has been an issue within the restaurant industry for years, according to the New York City Hospitality Alliance, an industry group. But the alliance's Executive Director Andrew Rigie said third-party websites and bots have exacerbated the problem, hurting restaurants’ bottom lines.
“ If a bot or even a person books a reservation for the purpose of selling it and doesn't sell it, it becomes what we call a no-show — meaning the table sitting there empty and no one shows up,” he said.
The restaurant loses money, Rigie said, and the workers lose out on their tips. He added that restaurants like to know whom they are serving “and don't want some fake name and person coming in using the reservation.”
Gov. Kathy Hochul, who signed the bill into law last month, said at the time that ending the “predatory black market” for reservations would protect both consumers and businesses.
“New York is home to some of the best restaurants in the world, and whether you’re returning to your favorite local spot or trying out the latest in fine dining, you deserve a fair system,” she said.
Amy Zhou, a partner at the hospitality company that owns COTE Korean Steakhouse and Coqodaq in the Flatiron District, said she first noticed a problem in 2022, when the restaurants began experiencing an unusually high percentage of no-shows for reservations. She said the rate was as much as 25%, compared to a typical rate of 5%-10%.
A smaller amount of no-shows can be mitigated with a waitlist, Zhou said, but higher amounts over time can wipe out restaurants' expected earnings.
Zhou said she eventually read a New York Times story about Appointment Trader, a platform that lets people buy and sell all kinds of appointments — including restaurant reservations — and realized the problem could be restaurant scalpers armed with technology. She said she then started working with the New York Restaurant Association on legislation to curb the practice.
On Tuesday, Appointment Trader’s site showed several restaurant reservations among its listings for “trending Places in New York City”: Le Café Louis Vuitton for an average price of $170, the Corner Store for $245, Tatiana for $130 and, topping the chart, the Polo Bar for $330.
But Appointment Trader founder Jonas Frey said his site opens up reservations to people who would otherwise have a hard time getting them. He said diners who want to get into exclusive restaurants usually either need to know concierges or pay even more to other sellers, like ones who have agreements with restaurants.
Frey said the new law would hurt his company, and also added that “it’s going to impact New Yorkers.”
“Right now, anyone that's willing to pay between $50 and $100 can go to Carbone or 4 Charles Prime Rib at a moment's notice," he said. "If they can't buy reservations in New York, you just can't do it, because Appointment Trader didn't create the problem that there is no availability. Appointment Trader was successful because people could not get restaurant reservations.”
Frey said his site already has measures in place to prevent issues such as no-shows, like requiring members to sell more than 50% of their reservations and banning profiles that fall below 25%. He said he would support a law aimed at banning the use of bots in the practice, such as the federal Bot Act, which targets ticket-scalping bots.
Many of the sellers on his site are regular diners, Frey added. “ A lot of the … interesting supply comes from people having a reservation who changed their mind and, you know, want to dine somewhere else,” he said.
But Zhou, the hospitality company partner, said she considered sites like Appointment Trader to be misleading for consumers.
“We don’t want our brands represented by someone that we didn’t give permission to,” she said. “At the end of the day, they’re not only taking our reservations, they’re also taking our likeness, our branding ... when in fact they are not our partners, they don't share our values, they don’t share our commitment to hospitality, and when things go wrong for the diner, they don’t take any responsibility for it.”
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economy
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Catalina Gonella
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Gothamist is funded by sponsors and member donations
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