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Why SF Chef Daniel Patterson Ditched Reservations and Started Selling Tickets

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This is one of two companion pieces on the topic of tickets, an up-and-coming alternative to making restaurant reservations. Below: Amy McKeever spoke with San Francisco chef Daniel Patterson, who recently adopted the system for his two Michelin-starred restaurant Coi. For an economic consideration of tickets, Ryan Sutton crunched the numbers on using a ticketing system versus using OpenTable.
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[Photo: Carlo Cruz]

Earlier this week, San Francisco chef Daniel Patterson announced that his fine dining destination Coi would switch from reservations to the ticketing system devised by Nick Kokonas of Alinea, Next, and The Aviary in Chicago. In this system, diners purchase tickets ahead of time for tables that vary in pricing according to the demand; for example, early or late evening weekday tables might be cheaper than a primetime Saturday night booking. Coi's tickets — which range from $145 to $195 — are now available for the two-Michelin-starred restaurant for dates from September 1 onward.

In the following interview, Eater talks to Patterson about how no-shows prompted his decision to take up ticketing, the one thing he thinks customer lose in the new system, and why he believes this is overall better for hospitality at Coi.

How long have you been talking to Nick about switching over to tickets?
Nick showed me the system two years ago for the first time and explained how it works. He said he thought it would work really well for us. That was the first time I'd ever heard of it. So we've been talking on and off for two years and this year seemed like the right time to try it.

Why?

About 15 percent of diners either cancel or no-show within the last 48 hours.

We've gotten a lot busier this year, and the demand for the reservations has been much higher. So I've noticed much more the rate of no-shows. It hasn't gone down; it actually has probably gone up a little bit. About 15 percent [of diners] either cancel or no-show within the last 48 hours. And within the last seven days about 30 to 40 percent of the reservations turn over. The problem is we're a special occasion restaurant for most people, not a spontaneous decision. So people will think about coming to our restaurant a month or two months in advance. A very large percentage of people who make reservations a month or two in advance will cancel them or not show up within the last week, and it's very hard to re-book them.

To show you how dramatic this is, when we leave Saturday night, we might have 45 reservations for the following Tuesday. So we'll make all our orders and preparations in terms of the things that we need to do in advance. And then when we come in on Tuesday morning, we'll find that there's, for example, 31 people. We might gain a little bit during the day, but it's still going to be substantially below what we were anticipating, which means we have to throw a lot of food out because it doesn't keep.

What's the re-booking rate during that last week? How many of those cancellations are you able to fill at the last minute?
Some. To have a full dining room, we have to book it twice, the way it is now, on average. Sometimes a little less, sometimes more. What that means is that basically somewhere between 40 and maybe even as much as 80 percent of those reservations will cancel and then be replaced by another one. And, in the process, they don't all get replaced. So really the main reason right now that we're not full all the time is last-minute cancellations. If we were a restaurant that was more casual, that had a lot of walk-in business, it wouldn't really matter as much. But we're not.

With the ticketing system, we can reduce prices because the no-show rate drops.

There's a second part of the answer. There's something from the customer's standpoint that is very beneficial about the ticketing system, which is the idea of variable pricing. Some tables are more in demand than others. Right now, we charge a little bit more to account for no-shows, basically. Because we know that not everyone's going to show up for their reservations. With the ticketing system, we can actually reduce our prices because — at least based on the data that Nick has from Next and Alinea and also from Trois Mec, and from what I know — the cancellation and no-show rate drops quite a bit. So we're able to pass on that savings to customers. That I like a lot.

What would be the cost right now if you weren't accounting for no-shows?
Probably right around where our pricing is right now, which is about $175-$180 on average. The amount of tables we have at each price point, I think if you were to add them up and divide by the number of tables, it'd be right around there, about $175. I think we have about as many [tables] below $175 as we do above.

How did you decide what price range you wanted to go with the tickets?
Oh my god, I threw a piece of spaghetti at the wall. I had no idea. I wanted to reduce prices a lot, like noticeably, to make a point about the benefit of this system because I think it's significant. And, also, I wanted to understand the effects of variable pricing on the shoulder times, very early in the night and very late in the night. Would it drive more business? I don't know. This is brand new for us and it's brand new for me. Every market is different, so someone else's experience isn't going to be the same as ours. We're just going to see how it goes.

One thing that I do like, though, and one of the reasons that I priced the lower-priced tables as low as I did is that we get about 20 or 25 percent of our business from people in the restaurant industry. I think most people in the restaurant industry, given the choice, will take the early or late lower-priced table because none of us makes very much money in this business. It's a nice thing to do for industry tables.

We put one table somewhere in September that is $100 per person.

The other fun thing that we did was we put one table somewhere in September that is $100 per person. It's kind of like finding a golden ring or something. It's an idea that came from Nick, which I think they do, and I thought it was a great idea. It adds an element of fun and interest to the whole thing. You have to actually look through all of the days to find it.

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[Photo: Maren Caruso]

Obviously the ticketing system helps resolve the no-show problem, but what other benefits does it bring to you to switch over?
That's something I've spent a lot of time thinking about. As a chef who is a restaurateur, there is nothing more important than hospitality, than taking care of people. Every decision that leads us closer to taking better care of people is a good decision. Every decision that leads us away from that is a bad decision. More or less.

So the question is not really about why is it better for restaurants. Why is it better for customers? I think there's really two reasons. Maybe three reasons. One, clearly the transparency of the system is incredibly refreshing. You're not hunting and pecking. We hold one or two tables a night, but that's it. Everything that's there is everything that's there. We don't hold back any inventory. So, as a customer, you really understand where things stand in terms of the reservation. Pricing is a big factor, the fact that the pricing is a little less through this system. And the other thing is that our restaurant is about perfect consistency, to do something at a very, very high level every single time. Every table, every customer, every dish perfect. The most important thing is not just that it's great once in awhile. Anyone can be great once in awhile. The hardest thing is to do something really great every time.

This system, because it would diminish these huge ups and downs, what it will do is allow us to staff more appropriately, to spend more time focusing on the guests that are actually coming in and not just moving reservations around, which occupies many hours a day. Obviously people will come in late sometimes, a flight will be late or traffic, but it will be much less than the fully variable system that we have now. So we'll be able to be more prepared and really do a better job. I really feel like one of the benefits is we'll be able to improve our quality.

You lose something too...the complete freedom to cancel or move a reservation at any time.

All those things being true, you have to say that you lose something too. What do I lose? I lose the complete freedom that I have now to cancel or move a reservation at any time. And, sure, we have a no-show policy, but that has really proven to be no deterrent. We don't even charge people that often. So that's what you lose. You lose freedom to do whatever you want. But what if customers were told 15 percent of the time that the restaurant wouldn't accommodate them? If they made a reservation and showed up and the restaurant said, "Oh, we can't find your table for you, I'm sorry." That wouldn't be very acceptable. But that's basically what we have now is that people are saying, "We told you we were going to show up, but we're not."

And so I think we have to be realistic. You don't get every benefit in the world without any kind of counter-balance. And, in this case, the counter-balance is that when you make a commitment to come in, either you have to come in or transfer or sell your ticket to someone else and they'll come in. Because you can still do that. It's not like you're bound to it. There's a system through Facebook where people can get in touch with each other, kind of a secondary market for it. So if we're totally sold out, someone can look online and find that someone was trying to get rid of a ticket for that night.

Yeah, I know that's how they do it at Next and Alinea, too, but in terms of the people who missed their flight or had some last-minute emergency, is there any recourse under the ticket system at Coi?
No, it's a final purchase. I mean, we'll certainly try if we can to find someone from our own customer list to see if someone else can take the table. If an emergency came up, I'm very sympathetic about that. It's kind of a Pandora's Box. I guess the best thing I can tell you is that all sales are final, just like they would be if you had a concert ticket and all of a sudden you had to work or something came up. That being said, I understand the question, and it's definitely something that I'm thinking about. I'm wondering if there's a way to resolve it, those particular situations, in a way that everyone wins.

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[Photo: Maren Caruso]

Will you be tinkering with all these elements as you start using the system?
Yeah. I mean, this is totally new for us. In a way, it's no different than the system we have now. The difference is the moment when you pay. That's the only difference. We're going to do everything the same way we do it now: We're going to call in advance, we're going to find out if [diners] have any dietary restrictions, if it's a special occasion. We're going to cook the same way and serve the same way, hopefully better because we're always trying to improve. The only difference is the way that the reservations happen.

In the process of that, I'm sure things will come up that we don't anticipate now. And we'll learn from them and hopefully get better at that as well. But I think it's really important to point out that I've talked to Nick quite a bit about his experience in the last three years, and it's worked very well for them. And the guys at Trois Mec, it works very well for them. So I don't know why it wouldn't work for us.

I know some of the elements are different under your version of the system, so how did you decide what you would adopt directly and what you would change?
Everything is pretty similar. I would say one big difference is that they have a no walk-in policy. I just felt like if we had a table and we could accommodate someone, I'd rather say yes. That being said, it doesn't happen very often. In those unusual occasions, we said, okay, we'll do it on a case-by-case basis. Single diners, same thing. Email us and we'll accommodate them as best we can. Those are really the only significant changes that I can think of.

We went with the system because it works and people are happy.

Other than that, I think we pretty much went with the same model because it works and people are happy. It's not like the system impinges on people's happiness or people's experience. That's been [Next and Alinea's] experience and also at Trois Mec. So I think that's the important thing.

Are tickets as opposed to reservations the future? At least on the fine dining level.
I think on the fine dining level, yes. I also think that the system they have at Aviary where it's $10 to $20 just to make a reservation and then they apply it toward your bill is brilliant. Because you're not paying for everything. It's not very much money. But, at the same time, it kind of weeds out people who are serious about coming in versus not serious. I see that being widely adopted.

I think the big complaint that I've heard from the customer's standpoint is the lack of ability to do whatever they want, irregardless of what that means for the business or for anyone else. The feeling around it is less hospitality, but I don't see why. We work really, really hard to make people happy. As a cook, that is all you want to do, to make people happy. That's why I got into this business. But if they're not in my restaurant, I can't make them happy. And there's not one molecule of my being that feels any differently about how important it is to be 100 percent focused on hospitality and people's happiness. And everyone in the restaurant feels exactly the same way. In fact, we think it'll get us closer, that this will actually improve us.

Technologically, the world is changing.

I understand there might be some resistance, but most of the people I've talked to have been like, "Oh cool. Good idea." Technologically, the world is changing. San Francisco is very much the center of new ways of thinking about how we interact with the world through new technology and people are already making most of their reservations online, so it's not really much of a shift in that regard. So is it the future? I don't know. But I feel like the more people do it, the more it will become accepted and kind of normal, not remarkable. All new things are a little bit startling at first until you get used to them.

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Coi

373 Broadway St, San Francisco, CA 94133

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