American Express is taking control of restaurant reservations
An American Express credit card is seen here in New York in October 2023. American Express announced last week that it’s buying Tock
By Nathaniel Meyersohn, CNN
New York (CNN) — Trying to get a table at a buzzy new restaurant in New York or Los Angeles? You’ll have better luck if you’re an American Express cardholder and pay the requisite hundreds of dollars in fees.
American Express announced last week that it’s buying Tock, a booking app for around 7,000 restaurants, bars and other venues, for $400 million.
American Express already owns Resy, a rival restaurant booking app, and gives special table access to Amex customers that are not available to other customers. American Express Platinum cardholders ($695 annual fee) and Delta SkyMiles Reserve customers ($650 a year) receive exclusive reservations at hard-to-get restaurants and first dibs when cancellations pop up.
Rajesh Bhardwaj, the owner of Junoon in New York City — one of the first Indian restaurants in the United States to earn a Michelin star — and other restaurants, said that Amex has helped his eateries connect with new customers and develop events and curated menus to target specific Amex customers.
“It’s good news for restaurants,” he said of Amex’s involvement in Resy and now Tock.
But experts say that Amex’s acquisition gives the credit card company more control over velvet rope access to dinner — and who is shut out. People who don’t have Amex cards could have a harder time landing reservations.
Reservations at hot restaurants have become nearly impossible to snag in major cities in recent years, in part due to social media and the rise of food influencers and websites. Bots, table resellers and “private reservationists” have emerged to help deep-pocketed customers secure tables. New York recently passed legislation cracking down on the black market reservation system.
Businesses have long segmented customers based on loyalty or how much they spend, and there have always been VIPs and special perks for customers who pay more: orchestra seats at theaters, boxes at stadiums and first class seats on airlines.
But it’s been turbocharged in recent years thanks to new technology, like online booking software and targeted mobile advertising, and sophisticated data and analytics on customer behavior.
Credit card companies such as Amex are increasingly dangling exclusive perks in hospitality and leisure for their cardholders, such as pre-sale tickets for concerts and access to airport lounges.
A credit card company using its leverage over who can sit down at a restaurant is the next step in segmenting customers based on how much they are able or willing to spend, hospitality experts say.
Amex’s move marks companies’ “continued tiering of the consumer,” Joseph Nunes, a marketing professor at the University of Southern California, said in an email. “By locking in who gets what place in the queue (or has access) to high-demand restaurants, Amex gets in on a new form of status and makes their card a must have.”
For restaurants, Amex’s move is a mixed bag.
It may help restaurants attract Amex customers with deeper wallets, said Alex Susskind, a professor of food and beverage management at Cornell University.
But, in turn, Amex becomes the middleman between customers and restaurants. Restaurant owners and merchants have also complained about the fees credit card companies charge businesses, and it could open a new door for fees.
“American Express is the broker and they control the relationship,” he said.
The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
