Meeting demand – and about time
High-street retailers have been at it for more than 100 years. Cinemas and theatres and nightclubs have been doing it for almost as long. In recent times, airlines have got it down to a fine art. Even hotels have cottoned on. And now restaurants are at it as well.
What are we talking about? Yield management, that's what.
Department stores have a tradition of putting up their prices before Christmas when demand for goods is high, and they sell off unwanted stock cheaply in the January sales.
Airlines put a premium price on August flights to Florida, and run at a loss to Murmansk in winter. In hotels, room rates go up in the week when there's heavy business traffic, and come down at the weekend when customers are scarce.
It makes such obvious business sense that no one really questions why it never happened in the "old days". Equally, no one really questions why restaurateurs, in general, still turn their noses up at this practice.
Too often, restaurateurs believe that the cost of an egg is the cost of an egg, end of story. Charge the customer the cost of the egg, plus a bit more for cooking and service and that's the price, full stop. Same price, regardless of demand.
Until now. A US operation called DinnerBroker has the UK in its sights and has begun to target the high-value London restaurant market.
The idea behind the company is that customers looking for a peak-time table at a top restaurant (at the moment around 40 of London's top eateries have been approached) can do so through this booking agency, paying up to £20 per table for the privilege. This premium is split between the restaurant and the agency.
Outrageous, traditionalists will say. Fancy that! Putting a premium on the eight o'clock tables! London restaurants really are getting too big for their customers.
Except that they aren't. Customers will continue to pay what it takes - the same as they pay what it takes to stay in a five-star hotel in London, or go to the theatre on a Saturday night or fly to Paris at nine in the morning. Where there's demand, the price will be high.
The fact that customers are prepared to pay ridiculous prices for what they think is trendy or chic or what they need for business purposes is, arguably, not the fault of the jewellery maker, clothes designer or, in this case, the restaurateur. No - it's the fault of the customer.
Why shouldn't restaurant owners jump on the bandwagon too? High demand may not last forever (there are signs that the London bubble is, if not about to burst, slowly deflating), so what's wrong with cashing in while the going's good?
The customers who complain will be the same customers who book tables at three different restaurants on the same evening and no-show at two of them; who book a table of six and turn up as a couple; who book at eight o'clock, along with half the restaurant, and complain that the food is slow.
No, if customers want what everyone else wants and at the same time, they're going to have to pay for it.
If yield management has come to the restaurant world, good luck to the principle of DinnerBroker. It's about time.
Forbes Mutch, Editor, Caterer & Hotelkeeper
