If the restaurant savants at Zagat are correct, more than half of diners make their reservations over the internet. Folks in San Francisco and Washington D.C. jump significantly above that number, while only 21% of Portland hipsters would stoop as low as to be so technologically mundane. Snobs aside, going online has become the de facto way of securing a favorable table time.
Even in a crowded marketplace, online dining reservations remains a popular frontier for budding food-tech entrepreneurs. The top layer of the market is dominated by Open Table, offering huge breadth –but little depth — in terms of customer options. The key differentiator for Open Table, which services 21 million diners across 40,000 eateries, is the vast number of restaurants it serves. For each reservation made via its website or app, the company receives a fee as well as revenue from a propriety reservation/CRM-like terminal it offers to its clients.
The top of the res-tech space is rich with mammoth players. Open Table was purchased for $2.6 billion in 2014 by Priceline Group. Open Table has leveled the playing field by acquiring such competitors as Quickcue and Rezbook. Following in the big fish eats little fish scenario, Yelp purchased Seatme, Michelin Travel bought U.K.-based Bookatable and Tripadvisor put European online res company La Fourchette into its fold for $140 million. Some acquisitions added new features to the mothership such as improving wait times for tables while others added more client bases.
Sensing opportunities to provide more in-depth services, newer entrants such as Scottish-based Eveve, Table 8, Resy, Nowait and Nextable are digging deeper into layers of value that go beyond clicking for table times. Newer firms are working to create communities between eating establishment and their patrons. Going far beyond loyalty clubs, the goal of these hopefuls is to maximize mobile technology and data to create dining experiences where the maître d knows his or her customer’s favorite table and server.
Among those with a new vision for the online res space, Table 8 suggests it can provide seating priority at restaurants that don’t take reservations; Nowait attempts to empower customers by upgrading the waiting in line experience; and Seven Rooms goes deep into CRM, allowing eateries to gather sophisticated data about their diners.
Included in this new crop of restaurant tech companies is Reserve. Offering what it calls “premier table management software” for restaurants which allows its clients the ability to more efficiently with a CRM component to understanding the behaviors of its diners. This includes “identifying VIPs and tracking visit history, learning about diners with social media profiles and food/beverage/service tags, searching for guests via any detail in their notes, and sharing diner data across locations in a group.” The company says it differs from Open Table in that they select a curated list of establishments it and charges establishments a monthly fee, as opposed to a per reservation fee.
With all the established players and newcomers to the res-tech space, a crucial opportunity seems to be falling by the wayside. As most online reservation spaces provide some sort of feedback loop, those comments—especially the harmful negative ones that make their way to social media—are not easily managed through current reservation systems. To handle a review crisis, restaurants rely on all-purpose social media management firms such as Bazaarvoice or specialty consultants like Reputation Ranger.
It seems fairly obvious that one way of competing with the online reservation Goliaths is to provide the tools to forestall social media disasters. Res-tech wannabes, take note.