2631124751_964d0e2820_z
Paddy Padmanabhan
The Fancy Restaurant Fallacy

Is a fancy restaurant name inversely correlated to the quality of the restaurant experience?

I routinely fall victim to airport restaurants with fancy names – Brioche Doree, La Tapenade and suchlike- which are actually notorious for bad, overpriced food. I have succumbed to this bias many times in the course of picking restaurants in general. Over time, though, I have become somewhat mistrustful of establishments with pretentious names. High end restaurants, in particular, where everyone from the hostess to the snooty sommelier and the waiter will have you at their emotional mercy and you end up ordering something fancy and pricey that inevitably will fall short of expectations.

You know what I’m talking about.

Dimly-lit places where the food comes in small quantities, large plates, and an enormous bill (with a 25% service charge added for your convenience). On the other hand, a Jimmy’s Pizza sounds decidedly down-market, but I have found that pizza could be delicious in these owner-run holes-in-the-wall that lovingly craft individual pizzas. They’re much lighter on the wallet.

2631124751_964d0e2820_z

We see this all around us. The illusion of reliability, trustworthiness and quality is carefully cultivated by skilled marketers with degrees from top business schools through clever imagery that the public has been conditioned to for a long time. I have often wondered why bankers, lawyers, money managers and strategy consultants always work in suits (Confession: I attended an interview with a bank many years ago in jeans and golf shirt. I did not get the job. I think both parties escaped a catastrophic alliance on that occasion). Would we trust these people less if they wore jeans and sandals and had visible tattoos and sported a ponytail, goatee or a soul patch?

Peter Thiel, billionaire founder of PayPal and the first ever outside investor in Facebook, talks about this in his new book Zero to One, and offers some interesting theories. He talks specifically about the spectacular boom-bust of the alternative energy industry in the US, especially solar, which was decimated in the 2009-2010 period by cheap Chinese products that were subsidized heavily by the Chinese government.

He proposes that the solar industry’s woes were brought on by CEOs who were sales guys in suits who had no idea about the technology and even less about the hard questions that needed answering for the business to be viable over the long term. He clinches his point with an interesting visual contrast between Brian Harrison , the urbane, grey-haired and immaculately suited CEO of the now defunct Solyndra on the one hand , and a jeans-and T-shirt clad Elon Musk, head of luxury electric car-maker Tesla. Moral of the story: Trust the hoodie, ditch the suit.

In their book Freakonomics, Steven Levitt and Stephen J, Dubner talk about how Warren Harding was the Republican nominee for the Presidency in the early 20th century mainly because of his good looks which would appeal to women voters (women had received the suffrage in 1920). He was indeed voted into office, but no one remembers him today as one of the finest Presidents of the nation.

Anyway, I thought I would do a little test on the restaurant name hypothesis. I went to a common public data source on restaurant ratings, TripAdvisor, and picked Bangalore, India, for my sample study. Remember, my hypothesis is that a fancy restaurant name is inversely correlated to the quality of the restaurant experience.

I looked at the top 10 restaurants by price, to start with, and tabulated the main criteria that patrons voted on after their experience (prices are indicated wherever provided, and are the low end of the published ranges). The total sample is around 3,700 restaurants in Bangalore.

PaddyTable1

If I consider restaurants with at least 20 ratings (arbitrary, but presumably more than what an owner can directly buy through the loyalty of his immediate family and friends), the highest rank in the top 10 most expensive restaurants goes to the Royal Afghan at # 8. As the name implies, it’s an Afghani food establishment. The name suggests food fit for Royals, thereby justifying a premium price.

The worst performer is Casa Del Sol with rank # 966 which seems to have closed down. The name would have suggested Italian or Spanish to me- apparently it’s a Mediterranean place (Most people I know would call Italian food Italian, not Mediterranean). All the indicators were down for this unfortunate establishment.

Note that Chez Nous, arguably the most pretentious name in the list and possibly a snooty French restaurant, comes in at # 845.

I also looked at the top 10 most popular places in town to see if there was anything interesting there and whether there was some correlation to how expensive or cheap it was. The results are in the table below.

PaddyTable2

The Royal Afghan makes the list; it’s a restaurant that’s expensive as well as popular. The public doesn’t seem to mind expensive, as long as the restaurant is good (It makes me rethink whether a mere 22 ratings is enough to claim legitimacy for restaurant with this profile). As I looked at the others, I rejected # 1 because it was clearly made up of the owner’s family giving themselves perfect scores.

The big surprise for me was Brahmin’s Coffee, at # 3 in the overall rankings. How much more plain can a restaurant name be? And yet, the average rating is 4.5 across a whopping 224 ratings.

The same with Karavalli at #10, which has won the Traveller’s Choice Award and has 152 ratings.

Now, that’s brand equity for you.

There are obviously many more factors that we need to consider, such as the location of the restaurant, the type of cuisine, the tendency of some restaurants to “game” the system (I was at MTR in Singapore recently, and the owner handed out business cards with Tripadvisor website details asking us to give them a good rating), and so on. Even after adjusting for all that, there may be something here.

Whether we like it or not, there is inbuilt bias that most of us carry when it comes to highly subjective qualifications like reliability, prestige, and quality. Beware of these biases the next time you pick a restaurant to take your family out for dinner.