Just before Christmas, at a loose end on a Tuesday night, New York-based Mitchell Hochberg asked his wife Suzan about dinner — where should they go, he mulled. “We hadn’t been to Carbone in a year,” recalls the real estate developer of the buzzy, booked-solid spot in Greenwich Village, “so I went onto Dorsia to see if anything was available”.
The members-only app offered him a table for two at 6pm — at least, as long as he guaranteed to spend $600 on supper. “We had a marvellous meal, and as you’re sitting there, you can check the app to see what you’ve spent.” Their tab was $600, almost to the dollar. “It works out great for someone like me,” he says.
Dorsia, a Miami-based start-up (named after the restaurant which American Psycho’s Patrick Bateman obsesses over) is just one player in an increasingly crowded niche on both sides of the Atlantic: companies aiming to simplify, streamline or shortcut premium restaurant reservations.
If you’ve ever tried to book a table at a vaguely popular spot and seen the next available booking is weeks away, you’ll see the appeal. Pricey concierge services and fixers have long been able to wangle such bookings; now these apps promise a more efficient, transparent solution for less.
Dorsia founder Marc Lotenberg says his company — now nearly three years old — works with the restaurants rather than on the black market. “The $300 they [diners] paid to get a table could have been $300 for a bottle of wine at the restaurant,” he says.
Restaurants will sign up with his service, he explains, mostly to help fill tables at quieter periods, such as that 6pm slot Hochberg booked. Due to the minimum spend, diners delivered by Dorsia will be higher spenders than typical early birders. “There’s no way for restaurants to weed out people who come and don’t spend a lot of money,” says Lotenberg.
Lotenberg’s business model has a two-tier revenue stream: Dorsia takes between 5-10 per cent of the total of a bill, before tax, depending on the agreement.
But it has also introduced a charge to users, having launched as an invitation-only service without a fee. Now users pay a $175 access fee, and can then opt for premium membership, for $5,000 per year, or premium plus for $25,000; sign up for the former, and you’ll receive over $400 in dining credits, doled out in equal, but expiring, monthly instalments and, for their US subscribers, a $150 cap per person on minimum spends. The latter has enhanced benefits, including $6,250 in dining credits, dispensed quarterly, and a reduced minimum spend.
Lotenberg says he had a user base of 140,000 when the platform was free. Since converting to the paid model around two months ago, he has seen 15,000 conversions, across all tiers. “We’re curating the ultimate dinner party for a restaurant,” he boasts of the calibre of diners he’s delivering. Some in the industry are keen to see him succeed: he recently received a $50.4mn investment from backers including Mario Carbone, co-owner of the eponymous New York restaurant, and the Reuben Brothers, valuing Dorsia at $146mn.
In London, 25-year-old Charlie Darwich is hoping for similar success when the app he’s been prepping for the past year launches. Darwich created Last Resort with a friend, Tiktok chef Ziad Hariri, after the pair found themselves charged £100 per head when they couldn’t make a long-booked reservation at a smart restaurant in west London.
“We had to book so far in advance, but when the time came, I was travelling on a business trip,” Darwich says, noting that sought-after reservations now almost always require a credit card guarantee. “Instead of incurring a fee, why not list it on a platform for someone else to use?”
Their mission isn’t to fill tables with higher spending diners, Dorsia-style, but rather to make sure that tables don’t go empty due to last-minute glitches. It’s much more affordably priced, too, and will earn revenue only from reservation sellers. Listing a standard booking on the site, he says, will cost 99p. If you’re selling a prepaid reservation — commonplace for tasting menu-style restaurants and other premium experiences now — sellers will be charged 10 per cent of the deposit as a handling fee: so a reservation which required a £200 deposit will cost £220 to offload via the platform.
Last-minute buyers pay nothing other than the bill at the end of the meal. “We wanted to be fair and keep it simplistic,” says Darwich, “And there’s no means to profit off a reservation. One of the last things we wanted to do was create a black market.”
Users of Appointment Trader can treat impossible-to-score reservations like commodities — and bank healthy margins from buying and selling.
It’s arguably the major player in this secondary market, predating Dorsia, and founded by Miami-based tech entrepreneur Jonas Frey after frustrations scoring a slot to get a driving licence renewal at the Department of Motor Vehicles. Four years ago, when he trailed a platform allowing users to sell appointments like this (hence the name), he realised there was a much larger potential market focused on restaurants. He wasn’t wrong: Frey says his site, with a user base of 80,000, realised revenues of $7.2mn last year and operates around the world, including the UK.
Appointment Trader operates independently of restaurants, allowing anyone with a booking to offer it on the platform. Frey created his own algorithm as a guideline for users to set the price of a given spot, whether a 6pm booking in Miami on a Monday or a prime slot on Saturday in Las Vegas (cannily, he used mobile phone data, purchased from Candy Crush and others, to determine the footfall in a given city at any time). Appointment Trader then receives between about 20 to 30 per cent of that fee, depending on whether the reservation is prepaid or not, as well as charging for the listing. “There are two things that are hard about what we do,” he says, “Number one, is pricing correctly, and then it’s [deterring] fraud.”
Frey has elaborate protocols in place to try to stymie any shenanigans: if a seller has to refund a buyer when a reservation goes wrong, for example, it will be logged, and if that refund rate exceeds 9 per cent the seller is banned from using Frey’s platform.
The board is community policed, too; he believes that user-run safeguards are likelier to result in better behaviour all round (and keep headcount costs low, as these are volunteer roles). He says some users have purchased more than 500 reservations, and suspects they are concierge companies effectively treating his start-up as a wholesaler.
Among his sellers, he says that last year’s top earner made $360,000 from the site, and more than half a dozen earned in excess of $200,000. He says these are all individuals, rather than companies, but there’s no way to discern whether or not they’re effectively professional resellers, perhaps using bots to book slots and then offering the free bookings to anyone willing to fork out a fee to have them transferred.
Many in the restaurant industry are unhappy — the reason Appointment Trader can no longer operate in New York. Last December, governor Kathy Hochul signed a new law, the Restaurant Reservation Anti-Piracy Act, precluding third-party reselling of this kind (Dorsia, which partners with restaurants, is unaffected). And the issue of professional reservation-squatting, where Instagrammers book tables to take photos rather than pay for a full meal, prompted several London restaurants, including Mayfair’s Gymkhana, recently to impose minimum spends.
Still, there are challenges for these services to overcome. The first is simple: embarrassment. Frey says that his average user books around a dozen tables via the site each year. “But our problem is virality. When people buy a reservation, they don’t really want to say they did. They want to look cool and not really tell people about it.”
Dorsia user Mitchell Hochberg has reservations about the membership fee — he remains a member but has converted to the paid-for service — “I wouldn’t do it for a few hundred dollars per month, use it or lose it,” he says. But he’s more concerned about the restaurants available. He’s seen buzzy spots use Dorsia to boost their bottom line: one casual bistro, for example, where the menu is largely burgers and fries, was insisting on a $250 per person minimum spend, which is likely to far exceed the typical bill.
More than anything, though, Hochberg says that if you’re looking for a somewhat reasonable minimum at any must-try restaurant, you’ll likely need to eat at antisocial times. At one hotspot he saw a $110 per person minimum spend offered on a Wednesday at 5pm, still within the typical workday. “I eat out seven nights a week, and I want to be able to get a reservation at a satisfactory time at any place I want to eat,” he says, “And the problem is: the more successful [these apps] are, the more members they have. And there are only so many slots.”
