OK, a story that combines two pet topics: restaurants and ticket scalping. As I wrote last week, Next is back in the news and is now set to open. This the new Chicago restaurant that plans to have customers pay in advance — buying a ticket for a meal as opposed to merely making a reservation. There is quite the buzz about this place (I have been striking out trying to get tickets over the last couple days) and that has led to a market in second-hand tickets. That is, people are scalping their seats (Bidding Frenzy for Tickets to Eat at Next in Chicago, Apr 9, New York Times).
Taking equal inspiration from Wrigley Field scalpers and the city’s grittiest pawn shops, food- and cash-obsessed Chicagoans have started a vibrant trade in tickets to a new restaurant, with bidding in one case hitting $3,000 for a group of seats overlooking the kitchen. …
As first reported by Eater.com, dozens of tickets have been offered for resale, ranging from $500 (a table for two, on a Wednesday at 9:30 p.m.) to six times that for a table for six at the chef’s elbow. (That seller later decided to keep the seats.)
So what does Next say about “transferring” its tickets? Here’s what their web site says:
Tickets are transferable, but we strongly encourage anyone considering buying tickets to Next from any other source to refrain from doing so without confirmation from us.
For our opening menu, with nearly 20,000 people signed up to buy tickets, we recognize that some people may try to resell tickets. Therefore we have capped sales for every user at 2 tables. Anyone purporting to have more tickets to sell is likely unscrupulous.
We will soon have an automated system in place to authenticate and transfer ticket ownership. In the meantime if you transfer, gift or sell your tickets you must email us at email@example.com, provide the name and email address for the recipient, and we will generate a new confirmation number for them. We will not honor any ticket holders without proper authentication.
So they are effectively trying to slow down scalpers although the chef, Grant Achatz, opines to the Times that he is OK with re-selling seats. It is worth pointing out that various firms have in fact tried to function as restaurant reservation scalpers. TableXchange, for example, fancied itself as a StubHub for restaurant reservations but failed in the recession as overall demand for restaurant reservations in New York dropped. That is, scalping is profitable when there is scarcity and Next certainly has that. An advantage they have over run of the mill restaurants is that they have your credit card and name. They can make sure it is you showing up for your reservation. That makes it really hard to re-sell without their blessing.
A final point, the Wall Street Journal had a nice essay on scalpers — and why they always get a bad rap (Don’t Blame a Scalper When You Think You’ve Been Fleeced, Apr 8).
Or maybe scalpers just get the blame—unfairly so—for what the market will bear. Last year, when the University of North Carolina hoopsters were having a dismal season, the street price of tickets to their games collapsed. An article in the student newspaper titled “Scalpers Feel Team’s Blues” elicited such comments as “Seriously. Am I supposed to feel bad for the scalpers when just last year they were charging double face value and acting like they were doing you the favor?” But the complaint here is actually one about what other people are willing to pay.
I once heard a dealer in vintage cars explain what market value is all about: “A car is worth what some son of a bitch will give you for it.” If you don’t like the price of a car—or a ticket—it makes more sense to blame the buyers than the sellers.
Coming back to restaurants, I would argue that scalping Next tickets is a lot less offensive than scalping regular restaurant reservations. When scalping regular restaurant reservation, the scalper hasn’t had to front any money. He just had to call before regular customers. Further, he is imposing a risk on the firm since they will lose sales if the scalper is unable to find a buyer. At Next, the scalper would at least be nominally taking a risk while the firm has already been paid.