Can NFTs Really Save the Restaurant Industry?
When the COVID-19 pandemic nearly decimated the restaurant industry, leaving business owners scrambling to turn a profit off of meal delivery and employees floundering through furloughs and layoffs, certain entrepreneurs tried to think of ways to keep their favorite establishments afloat. An emerging, semi-controversial methodology has to do with crypto and the blockchain.
This week, writer Maya Kosoff tweeted a screenshot of a listing for the Greenwich Village seafood restaurant Dame that includes an interesting sidebar—reservations at the popular Dame are hard to come by, but patrons have the option of buying a custom-made, $1,000 NFT offered by the restaurant that allows preferential booking via Dame’s Affable Hospitality Club. The Daily Beast reached out to Dame for comment.
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“I will bravely say it: NYC restaurant reservation culture has gone too far,” Kosoff commented, and many respondents to her tweet seemed to agree.
But Phil Toronto, co-founder of Front of House, the curation platform for “off-menu digital collectibles...for people who love restaurants” says that the work FoH has done for Dame, Emmet’s on Grove and Hanoi House (all located in New York City) establishes fresh income streams for the eateries we’d all like to see survive.
By offering diners extra perks such as quarterly tastings, preferential reservation access and custom-made birthday cakes with the purchase of a collectible NFT, restaurants are increasing their chances of converting casual visitors into regulars, Toronto said.
The Daily Beast reached out to Emmet’s on Grove and Hanoi House for comment.
The NFT reservations idea is coming at an interesting juncture for the restaurant industry. Due to inflation, Union Square Hospitality Group founder Danny Meyer says, many restaurant workers who fled the industry during the Great Resignation are being lured back to their eatery gigs by higher tips.
Similarly, while higher-end restaurants suffered during the peak of the pandemic, fast food chains are doing better than ever: in June of this year, quick service restaurant sales shot upwards by 14.4 percent, proving that in times of uncertainty, Americans are turning to the comfort of Big Macs. In other words, restaurants are far from dead, but chic big city eateries could use a boost.
“My day job is in consumer venture capital, and right before the pandemic, the idea was to put together a fund for restaurants and kind of operate in a similar way that tech startups do, where we provide extra services to restaurants” Toronto told The Daily Beast. “The idea evolved probably a year into the pandemic as NFTs and collectibles started to take off. We were like, ‘Hey, we could drive some revenue to restaurants from this crazy fake internet money.’ The underlying desire is just to make a restaurant’s business model more robust, and drive different revenue streams to them that doesn’t require putting diners in seats.”
In addition to the perks, of course, when restaurant-goers purchase an NFT, they’re also adding a piece of digital art to their collections.
Front of House only just went live in June, so it’s a bit early to determine whether the NFT reservation idea has long-term potential, but Toronto is optimistic. “Our business model is the restaurant gets 80% of all revenue and we take 20%, just for the heavy lift of minting the NFT and organizing the art,” Toronto said. “But the majority of the revenue flows to the restaurant itself.”
“This is such a new thing that we are not seeing widespread adoption,” Kelly Healy, Marketing & Member Relations Director at the New York State Restaurant Association, told The Daily Beast.
When reached by The Daily Beast to ask whether he’d consider implementing an NFT reservation program at one of his many eateries, including Balthazar, Pastis and Minetta Tavern, iconic NYC restauranteur Keith McNally had this to say: “What’s an NFT?”
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