Dynamic pricing for dinner? Some Chicago restaurants experiment with charging more for prime tables

When Frank Sinatra sang in Chicago, he’d often dine afterward at Gene & Georgetti, a white-tablecloth steakhouse in River North.

Sinatra would come to dinner after hours in search of privacy, said managing partner Michelle Durpetti, whose family has operated the restaurant since 1941. Though no plaque at the oxblood leather booth commemorates Sinatra’s years holding court there, the table is in demand from those in the know, Durpetti said. So is the booth next to it, which has hosted many famous diners, including Sting, Nat King Cole and members of Fleetwood Mac.

Now, Gene & Georgetti has found a way to capitalize on those starry legacies. Diners eager to guarantee a meal at either booth can pay to reserve their spot on a booking platform called Tablz, a Toronto-based startup that allows restaurants to charge fees for desirable tables.

The platform, which went live in spring 2021 and entered the Chicago market last summer, hosts about 80 to 85 restaurants in Canada and the U.S. Tablz is betting diners will be willing to pay a premium to guarantee the best spots for their meal. Unlike booking deposits made on some other reservation platforms, the reservation fees on Tablz are not applied to diners’ final bills.

“We’ve had a great response,” Durpetti said. “It books several times a day, at least several days a week.”

Though consumers are used to forking over extra cash for airline seats with more legroom or concert tickets closer to the stage, restaurants have not generally asked diners to do the same for better seats at dinner, at least not through any formal process. (Durpetti notes that in the past, some diners would slip cash to a maitre d’ for preferential treatment.)

Both airlines and ticket vendors have come under fire recently for their pricing practices. Ticketmaster faced widespread criticism and a Senate hearing after its bungling of Taylor Swift ticket sales last year, with much of the criticism focusing on the company’s use of dynamic pricing and fees and its dominance in the industry.

After pressure from the Biden administration directed toward the airline industry, including a callout from the president himself during the State of the Union, United said it would no longer charge families extra to sit children near their parents.

At the same time, other industries are getting into the pay-to-play game, notably the movie theater chain AMC, which announced in February its own plan to charge more for certain seats. At the AMC Dine-In at 600 N. Michigan Ave., moviegoers could choose from about 16 so-called preferred sightline seats for the 4:40 p.m. and 8:45 p.m. Saturday showings of “Avatar: The Way of Water” in 3D for an extra $2 per seat, for a total of $25.74 including taxes.

When a restaurant joins Tablz, it gets a 3D scan so diners can search for a table to book as if they’re walking through the restaurant looking for a place to sit, said Gabriella Lenzi-Littleton, who leads Chicago-based partnerships at Tablz and is a cousin of Durpetti. Restaurateurs work with Tablz to decide how much to charge for each booking; prices vary depending on day of the week and the reservation time.

At Gene & Georgetti, Sinatra’s favored booth is available to book for free in the late afternoon Friday, but it goes for $25 after 8 p.m. A prime-time Friday-night table for two at Roka Akor in River North costs $15. Old Town Pour House charges patrons $200 a table to watch March Madness games from the bar’s communal table section, which can seat eight to 10 people each.

Just over a third of bookings on Tablz are free, Lenzi-Littleton said, and the average price for a paid booking is about $27.

In 2022, diners booked about 10,000 tables through the platform, Lenzi-Littleton said. Most participating restaurants put somewhere between a fifth and a quarter of their most desirable seating on the platform, she said. In the Chicago area, about 10 restaurants have joined so far, including Marchesa, Jinsei Motto and Blue Sushi Sake Grill.

Restaurants don’t pay a fee to be on the platform, but Tablz takes 30% of each booking fee. Top-earning restaurants can make between $65,000 and $90,000 in a year, Lenzi-Littleton said. On average, restaurants make about $21,000 a year. That revenue is coming at a time when restaurants — which operate on notoriously thin margins — and diners alike are struggling with high inflation.

“What’s really interesting about that revenue is there’s no cost of goods or labor attached to it,” Lenzi-Littleton said. “It’s pure profit.”

Defenders and critics alike agree Tablz is following the playbook of airlines, concert ticket sellers and, now, movie theaters. They disagree over whether or not that’s a good thing.

“This is for high rollers and for suburban customers who want no chance of any adventure in their lives,” said Michael Roper, owner of Uptown brewpub Hopleaf.

Roper said he doesn’t want to charge people for something intangible. If Hopleaf customers want to sit close to the fireplace, or if they have a mobility limitation that requires a certain type of seating, they’ll be accommodated without paying extra, he said.

If he started charging for seats, Roper said, his customers would think Hopleaf had gotten “greedy.”

“I just want to charge people for beer, wine and spirits, and food,” Roper said. “I’m not in the real estate business.”

Tablz shrugs off accusations of nickel-and-diming, arguing that diners who are interested in paying a premium for the best seats should get the chance to guarantee their spots, and that others are free to skip the platform. Restaurateurs who use the platform say they have not received backlash from diners.

“It’s no different than booking your seat in a movie theater,” said John McDonald, founder of Mercer Street Hospitality, which owns Lure Fishbar, a Chicago restaurant on the platform. “You’re going with your kids, your wife, your girlfriend, and you know you’re going to sit second-row middle, you’re willing to pay a premium.”

One Chicago-area restaurant that had decided to skip joining Tablz in the fall reached out again after AMC announced its new pricing policy, Lenzi-Littleton said.

The restaurant, Lenzi-Littleton said, realized that dynamic pricing “really is the future.”

Table pricing on the platform is done by hand for now, but Tablz plans to introduce a demand-based algorithm within the next year to determine pricing, Lenzi-Littleton said, though restaurants will be permitted to opt out.

“Restaurateurs can do this with the real estate in the restaurant. They can’t do it with the menu,” she said. “Could you imagine going into a restaurant and having a salad on a Tuesday be $10, but have it be $40 on a Saturday? That would be absolutely insane.”

Steak and sushi restaurant Roka Akor has had three Chicago-area restaurants on the platform, in River North, Oak Brook and Skokie, for about four or five months. Billy Pyroulis, the general manager of the River North location, said he was “rather apprehensive” about charging for reservations, but the platform hasn’t received any pushback from diners.

The Roka Akor team estimates about 7% to 10% of the reservations made at the Chicago-area restaurants come in from Tablz. Steve Tindle, director of operations, said people are booking through the platform for higher-stakes meals such as dates or business dinners. About 10% of the River North restaurant’s seating is available to book through Tablz, including booths near the restaurant’s wall of wine, at its sushi counter and tables for two lined along street-facing windows.

“If you’re going on a first date, it’s nice to be able to look ahead, you’ll kind of look in the restaurant and be like, OK, this looks like a quiet spot where we can have an intimate conversation,” Tindle said.

On other online reservation platforms, such as OpenTable and Chicago-based Tock, restaurants sometimes charge deposits for reservations — though diners typically get to apply those fees to their final bill. Tock has considered allowing restaurants to charge fees in the way Tablz does, said Dan Nelson, the platform’s senior director of product and design, but has no plans to do so.

“We want to empower restaurants, but we also want to make sure there’s an equally great experience for the consumer, and this just doesn’t align with both,” Nelson said.

Deposits can still help restaurants bring in more revenue by increasing check sizes, he said — some charge as much as $50 or $75 a person for hard-to-get reservations — but diners still see the money back at the end of the night.

For several years now, some credit card companies have offered special experiences to customers for a premium, such as a multicourse meal with wine pairings at a specific table at a nice restaurant, notes David Barriball, operations director of One Off Hospitality.

One Off, which owns Chicago establishments including Avec and The Violet Hour, doesn’t use Tablz, Barriball said, but he’s not opposed to the concept. “If people are willing to pay a premium to have a premium table in a restaurant, I see nothing wrong with it,” he said.

Pricing tiers like the kind announced by AMC could be becoming more common because technology simply makes them easier to manage, said Avner Strulov-Shlain, a professor at the University of Chicago Booth School of Business who studies behavioral economics. If extra revenue from premium seats helps keep restaurants afloat, then all diners might benefit.

But just because consumers are used to paying more for better seats at Broadway musicals doesn’t necessarily mean they’ll be receptive to paying for better seats when they go to the movies or to dinner.

“Trying to predict how norms will change is a fool’s errand,” Strulov-Shlain said.

There are two kinds of restaurantgoers, Barriball said. There are those who want to be totally prepared: They look at the menu online ahead of time and pick out what they want to order before they arrive at the restaurant. Others want to be surprised by the whole experience. “It appeals to different people,” he said. Tablz is banking in large part on the desires of the first group.

Roper, for one, considers Hopleaf a “serendipitous kind of business” where neighborhood customers might stop in to enjoy the fireplace on a cold winter day or enjoy the patio in the spring. But he can see how the platform might make sense for other kinds of establishments that are courting other kinds of diners.

He can understand, for instance, that suburban customers who are driving 20 miles for dinner might want to guarantee they’ll have the table they want when they want it, he said.

“No one I know is going to go for this,” Roper said. “But that doesn’t mean they’ll fail.”

On recent Friday afternoon, Chuck Domiano of Cincinnati sipped bourbon after a lunch of calamari, sausage and peppers and an Italiano sandwich at Gene & Georgetti.

Domiano, who was in town with family, said he wouldn’t use Tablz for everyday reservations. But he said he would consider it for special occasions. “An anniversary or a birthday, something along those lines, then yeah, absolutely,” he said while seated at the bar. “Whatever amount it is to reserve the table is a trivial amount.”

Domiano, a freight broker, said he’s been coming to the restaurant in River North for more than two decades. He’s never dined at Sinatra’s table, and if he booked a reservation through Tablz, he’d probably choose to sit there.