Check out this trailer:
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Yes, that is a trailer for a restaurant. And, yes, that says you have to buy tickets.
Next Restaurant is the latest project for Grant Achatz, one of Chicago’s more prominent chefs. He currently has Alinea, an over the top room where the less expensive tasting menu goes for $150. Next is going to be priced significantly lower and while the trailer says “Movie!”, theater is the better analogy. The plan is that the menu will change four times a year and each will be on particular theme.
But that’s not the interesting part (at least for this blog). What I find intriguing is that you have to buy tickets — just like going to the Steppenwolf or the Lyric Opera. Here is how the New York Times describes the plan (In Chicago, the Chef Grant Achatz Is Selling Tickets to His New Restaurant, May 5):
Anyone wishing to eat at Next after its scheduled opening in the fall will pay in advance on its Web site. Like airlines, Next will offer cheaper tickets for off-peak hours. A table at 9:30 on a Tuesday night, say, would cost less than one for Saturday at 8. Ticket prices will also vary based on the menu, but will run from $45 to $75 for a five- or six-course meal, according to the site, nextrestaurant.com. (Wine and beverage pairings, bought with the ticket, will begin at $25.) … Subscriptions to a year’s worth of space-and-time coordinates will also be sold.
So this is a very different approach to demand management then one typically has for a restaurants. One of the things I have always wondered about restaurants is that customers value having a reservation but restaurants give them away. That goes away with this plan. If you really want a table on Saturday night, it’s going to cost you. Further, if you don’t show, you’re out of luck. That is, not only does the firm reap a reward for guaranteeing a seat at a popular time, it shifts risk to the customer. Getting a table of four will mean fronting several hundred dollars. You better be confident that the babysitter will show.
Beyond the demand management aspect, there are some other operational benefits:
“We now pay three or four reservationists all day long to basically tell people they can’t come to the restaurant,” Mr. Achatz said of Alinea. With Next, he intends to strip away those and other hidden costs of dining out. “It allows us to give an experience that is actually great value,” he said. “That’s the theory.”
But the plan would also have value for Mr. Achatz and his main partner in Next and Alinea, Nick Kokonas. By law, restaurants may distribute tips only to those employees who work in service. But the service charge included in the ticket price “gives him control over the money,” said Bill Guilfoyle, an associate professor of business management at the Culinary Institute of America in Hyde Park, N.Y. “He can give it to whomever he sees fit.”
On top of that, the article notes that there are some serious cash flow benefits to getting people to pay upfront; if a night sells out a month out, Achatz et al. get a month of float on several thousand dollars. They’ll have turned their restaurant into a mini-Amazon.com.
There are a few challenges I see in this plan. First, there is a question of how customers will react. I suspect that most of them will role with the time-dependent prices and paying upfront because Achatz is Achatz. The experience will undoubtedly be special and cost a whole lot less than Alinea. What I wonder is how far out people are willing to buy. Whether a given night works for an outing is hard to forecast weeks out. If you go to a standard restaurant, you can make a reservation ahead of time and have the flexibility to cancel. Here, you lose the flexibility to cancel. It will be interesting to see how quickly they sell out once the novelty wears off.
Another issue is what happens once customers are at the restaurant. I wonder whether they will be able to turn tables in a timely fashion. Here is what Achatz envisions happening in the restaurant:
But Mr. Achatz … hopes that people won’t be irritated once they enjoy the convenience of a meal with no decisions to be made and no check to be signed. “There’s no transactions in the restaurant at all,” he said. “So you can literally come in, sit down, start your experience, and when you’re done, you just get up and leave.”
My thought is that there is no better sign that it is time to leave than having the waiter drop off the bill. Once you do away with that, what is the classy way to nudge people out the door?