Certain Issues are Perceived Deceptions

Certain Issues are Perceived Deceptions

New York Cracks Down on Black Market Reservation Platforms

In a move aimed at ending the predatory practices of secondary market reservation platforms, New York Governor Kathy Hochul signed a bill into law on December 19. The legislation prohibits third-party platforms from arranging unauthorized reservations, marking an effort to tackle the black market for restaurant reservations in the state.

According to the Governor's office, the new law specifically targets the resale of reservations, effectively banning these platforms from operating without the venues' permission. The National Restaurant Association and NYC Hospitality Alliance have spoken in support of the legislation, stating that it is crucial for the industry's criticality.

However, some concern has been raised regarding the impact of the legislation. One article reported that the biggest problem facing restaurants today is the bots that scoop up online reservations for high-profile establishments, such as Carbone, Polo Bar, Corner Store, Cote, and Don Angie. But according to Branded, a leading platform in the hospitality industry, no restaurateurs believe that bots are the biggest issue facing their businesses.

Branded argues that the legislation represents over-proliferation of legislation, with restaurant operators contending that such over-reach is a greater threat to the hospitality industry than the bots. The restaurant industry, with over $1 trillion in sales, is vast and complex, with only a small subset being impacted by reservation bots. Branded's position is that the legislation will have little impact on the industry and on the specific issue it is trying to target.

While Branded doesn't support platforms operating without permission, it believes that the bots problem is solvable using technology solutions and good management, rather than systemic legislation. In a previous newsletter, Branded identified the emerging trend of these reservation platforms, arguing that they were wolves in sheep's clothing. However, despite the dislike for these platforms, Branded advocates for a free market approach, allowing the issue to be resolved through market dynamics.

Branded sees other challenges facing the hospitality industry as more pressing, including increased homelessness, crime, deteriorating infrastructure, heavy taxes, over-the-top regulations, and litigation-empowering laws. The bots issue does not rise to the level of challenges that require the government's attention, according to Branded.

Enforcement of the law and its impact on the secondary market reservation platforms remain to be seen, with concerns raised about the effectiveness of the crackdown. The software market for reservation platforms is expected to reach $24.5 billion by 2031, representing a constant annual growth rate of 10.13%. The vast majority of restaurants still take reservations the old-fashioned way, paying for services provided by these platforms.

Branded invites readers to explore its portfolio companies and investment strategies through the Access Hospitality Network. This week, Branded highlights its partners at LDV Hospitality and Monterey, offering a shoutout to their remarkable work and recognized positions among the best restaurants in New York City.

References:[1] Branded Strategic. (2023). To Reserve or Not to Reserve, That is the Question. [Article] Retrieved from https://brandedstrategic.com[2] Zion Market Research. (2023). Global Restaurant Reservations Software Market Size, Share & Industry Analysis, By Component (Software and Services), By Distribution Channel (Web, In-store Kiosk, and Mobile Application), By End-User (Independent Restaurants and Chain Restaurants), and Regional Forecast 2023-2030. [Report] Retrieved from https://www.zionmarketresearch.com[3] MarketsandMarkets. (2024). Restaurant Reservation Software Market by Component (Software and Services), by Deployment Mode (Cloud and On-premises), by End User (Restaurants, Hotels, and Bars), and by Region (North America, Europe, APAC, Middle East & Africa, and South America) - Global Forecast to 2030. [Report] Retrieved from https://www.marketsandmarkets.com

1. Branded, a leading player in the hospitality industry, argues that the new law targeting black market reservation platforms might not make a significant impact on the hospitality industry, as restaurant operators claim over-reach by the legislation poses a greater threat.
2. Despite concerns about bots scooping up online reservations for high-profile restaurants, such as Carbone and Don Angie, Branded maintains that technology solutions and good management can effectively tackle the issue, rather than systemic legislation.
3. In a free market approach, Branded advocates for resolving the issue of unauthorized reservation platforms through market dynamics, rather than government intervention.
4. While the legislation aims to tackle the black market for restaurant reservations, there are other pressing challenges facing the hospitality industry, according to Branded, such as increased homelessness, crime, deteriorating infrastructure, heavy taxes, over-the-top regulations, and litigation-empowering laws.
5. For readers interested in exploring the sector, Branded invites them to explore its portfolio companies and investment strategies through the Access Hospitality Network, highlighting its partners at LDV Hospitality and Monterey.

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