If you want to get a table at a hot new restaurant in New York or Los Angeles, you’ll have better luck if you’re an American Express (AXP) cardholder and can pay the required fees of several hundred dollars.
American Express announced last week that it is buying Tock, a booking app for about 7,000 restaurants, bars and other venues, for $400 million.
American Express already owns Resy, a competing restaurant reservation app, and gives Amex customers special access to tables not available to other customers. American Express Platinum cardholders ($695 annual fee) and Delta SkyMiles Reserve customers ($650 per year) get exclusive reservations at hard-to-reach restaurants and priority for cancellations.
Rajesh Bhardwaj, owner of Junoon in New York City – one of the first Indian restaurants in the U.S. to receive a Michelin star – and other restaurants, said Amex has helped his restaurants attract new customers and develop events and curated menus to specifically target Amex customers.
“This is good news for the restaurant industry,” he said of Amex’s involvement in Resy and now Tock.
But experts say Amex’s takeover gives the credit card company more control over access to the dinner – and who is excluded. It could make it more difficult for people without an Amex card to get a reservation.
In recent years, it has become nearly impossible to reserve a table at trendy restaurants in major cities, in part due to social media and the proliferation of food-related influencers and websites. Bots, table sellers and “private reservation agents” have popped up to help well-off customers get a table. New York recently passed a law cracking down on the black-market reservation system.
Companies have long segmented their customers based on loyalty or purchasing power, and there have always been VIPs and special perks for customers who pay more: stalls at the theater, boxes at the stadium, and first-class seats on airplanes.
But in recent years, this trend has seen a huge upswing thanks to new technologies such as online booking software, targeted mobile advertising, and sophisticated data and analytics on customer behavior.
Credit card companies such as Amex are increasingly attracting their cardholders with exclusive discounts in the catering and leisure sectors, such as advance concert tickets or access to airport lounges.
A credit card company using its influence over who can sit in a restaurant is the next step in segmenting customers based on how much money they can or want to spend, according to restaurant experts.
Amex’s move shows that companies are “further categorizing consumers,” said Joseph Nunes, a marketing professor at the University of Southern California, in an email. “By determining who gets what spot in line (or access) to high-demand restaurants, Amex is creating a new form of status for itself and making its card a must-have.”
For restaurants, the impact of Amex is mixed.
This could help restaurants attract Amex customers with deeper pockets, says Alex Susskind, a professor of food and beverage management at Cornell University.
But it makes Amex a middleman between customers and restaurants. Restaurant owners and merchants have also complained about the fees credit card companies charge their businesses. This could open a new door for fees.
“American Express is the broker and controls the relationship,” he said.
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