Doors could close soon on high-end restaurant reservation trading in Louisiana

A nascent industry for buying and selling restaurant reservations could meet its end soon in Louisiana. State lawmakers unanimously advanced a bill Thursday that forces such trading platforms to officially partner with the restaurants whose tables are going to the highest bidder. So far, the trading has taken place without any input or involvement from the dining establishments.    

House Bill 90, sponsored by Rep. Troy Hebert, R-Lafayette, cleared the Louisiana House of Representatives in an 89-0 vote without debate. It seeks to ban companies such as Appointment Trader, Dorsia and ResX from arranging reservations through their platforms if they do not have explicit contracts with the restaurants. 

Hebert said he doesn’t want to ban the trading apps’ existence; he just wants them to get the restaurants’ permission before operating in Louisiana. 

Reservation trading platforms allow diners with hard-to-get table reservations to sell them online in auction-style transactions similar to eBay. Prospective buyers can also use the platforms as a concierge service, offering a flat fee to anyone who can secure them a table at a particular establishment. 

While the practice of paying for restaurant reservations is more common in places such as New York and Miami, the trading platforms came under scrutiny in Louisiana after the Illuminator reported on the high-dollar trades in the New Orleans market during Super Bowl weekend. They included a $2,138 reservation for a table of four at Antoine’s.

Hebert amended his bill on the floor, adding a provision that would allow the Louisiana attorney general to seek restitution on behalf of anyone who purchases an unlawfully sold reservation. Some diners are buying reservations without realizing the restaurants are not actually selling them, he said. 

Someone paid $2,138 for a reservation at a French Quarter restaurant. Should this be outlawed?

“We’re not talking about Chik-fil-A here,” Hebert said in an interview after his bill was approved. “It’s a select group of restaurants they’re doing this to …They’re profiting off of a restaurant’s brand, and the restaurants don’t even know about it.”

The bill originated from a dispute between online restaurant booking platforms — such as OpenTable and Resy — and the newer reservation trading platforms.  Hebert sponsored the legislation on behalf of the Louisiana Restaurant Association, which modeled it after a state law New York adopted last year with the backing of booking sites.

If trading platforms can secure partnerships with restaurants, they would pose a threat to the established booking apps. The trading apps make money by taking a percentage of the winning bid price for each trade, whereas OpenTable and the other booking platforms make their money by charging restaurants a fee every time someone reserves a table through their sites. 

Appointment Trader founder Jonas Frey said he is currently offering contracts to restaurants that will give them an equal share of the winning bids for every reservation. It would give dining businesses a new revenue stream from something that currently costs them money, he said. 

The viability of the reservation trading business model depends on whether there is genuine demand for seats at a particular restaurant or whether that demand is artificially inflated just to cash in on wealthy tourists. 

Hebert told his colleagues he believes the trading platforms use software bots to snap up reservations on OpenTable and Resy and then list them for sale on their sites. 

Hebert’s bill heads next to the Senate for consideration.