The Right Reservation System for You
From Resy to Tock, Competition Is Heating Up for Online Platforms
We’ve gotten to a point in life where we can’t hide from technology. Our homes talk to us and our cars drive themselves. The restaurant industry is, of course, aboard the technology train, especially when it comes to reservation systems.
"OpenTable rules the market space,” says David Massoni, owner and operator at the Brooklyn-based Three Kings Restaurant Group, which owns The Heights, Massoni and Talde. "I will always stick with whomever has the largest customer base and continues to grow."
OpenTable boasts seating more than 23 million diners per month. Though the company has dominated the reservations space for 20 years, it's being confronted by an onslaught of players entering the crowded arena. Through Reserve, Yelp Reservations, Resy and Tock, restaurants and diners alike have plenty of options for taking (and making) reservations.
We used to live in a world where guests visited OpenTable's site to book reservations. If it wasn’t available for a particular restaurant, the guest called the establishment and talked to a real person who asked questions like "Is this a special occasion?" or "Do you have allergies?"
Now diners find themselves on a restaurant’s website with links to potentially unknown reservation systems, forcing diners into a new way of booking, making it even more important for newbies to woo the biggest names in the biz.
“Resy partners with a carefully curated group of restaurants worldwide that strive to deliver the same elevated service, exceptional food and unique personal touches that our diners care about and expect," says Stephanie Cohen, who acts as head of sales for the company.
Some of the top restaurants in America use alternatives to OpenTable. Chicago's Monteverde and New York's Blue Hill at Stone Barns use Reserve. Chicago's Kai Zan and farmerbrown of San Francisco use Yelp Reservations. And many of the country’s most-lauded restaurants, such as New York powerhouse Eleven Madison Park and minibar of Washington, D.C., require diners to buy tickets or make a deposit in advance through Tock, Nick Kokonas’ reservation system.
Kokonas is co-owner of Chicago-based Roister, Next, Aviary and Alinea—a three-star Michelin establishment universally heralded as one of the best restaurants in the world. "Restaurant owners are relentless when it comes to giving their guests a flawless experience, yet they were dependent on a reservation system built on 1998 technology," he says.
"They deserved better," Kokonas continues. "We built Tock to give restaurateurs the ability to maximize profit and cut down on costly no-shows, putting them back in control of the reservation experience. It’s time restaurateurs raise the bar for the technology they use every day." Since its inception, Tock has processed more than $250 million in pre-paid reservations.
“We charge a flat $249 monthly fee no matter how many reservations you book. We do not charge per cover,” says Greg Hong, CEO and founder of Reserve.
“The biggest thing is that diners and restaurants alike were getting a suboptimal experience. … being able to deliver better tools is what they’ve been asking for a long time. If we could serve both constituencies better, everyone would win.”
Yelp Reservations also costs restaurants $249 per month; its fee includes a link to book reservations on partners’ Yelp pages. OpenTable charges a $249 per month system fee and $1 per diner. If a diner books through an OpenTable link on a restaurant’s website, it still costs the restaurant 25 cents per diner.
For Patrick Cullen, owner of Presidio in Chicago, that means almost $2,000 per month in extra fees for a 44-seat dining room. “The biggest reason for changing (from OpenTable to Reserve) was the difference in pricing structure," he says. "The biggest difference I see with Reserve is that they are a partner to restaurants, supporting them, as opposed to OpenTable, which uses the restaurants to manipulate their own bottom line. We did not see any noticeable change in reservation traffic, which was our biggest fear, but never a reality.”
Tock charges a flat fee under its pro plan of $699 per month. There are introductory plans that cost less but require a small percentage of pre-paid tickets (two percent to three percent). Resy avoids per-diner fees by charging between $189 monthly for a basic plan and $899 monthly for a premium one.
"We built Tock to give restaurateurs the ability to maximize profit and cut down on costly no-shows, putting them back in control of the reservation experience."
– Nick Kokonas, founder of Tock
With all these options, OpenTable is feeling the heat. Over a three-month period, including last Valentine’s Day, an OpenTable employee booked hundreds of fake reservations at Reserve restaurants, resulting in hundreds of no-shows. Presidio was affected by this scheme and Cullen was not amused.
“OpenTable’s reacting to competition in the market by targeting people instead of becoming more competitive.” He received a personal phone call from OpenTable’s CEO, Christa Quarles, in the wake of the scandal.
“I think at the end of the day, it’s very clear we are a true competitor to the incumbent in the space,” says Hong. “We definitely saw inbound (inquiries) as a result from restaurants that said ‘I’ve seen enough of this and I don’t want to continue to support it.’”
When asked why restaurants are switching to Reserve, he continued, “They want to save money, but they see the vision for what we’re doing. We have so many former operators on our team that are talking to restaurants about what they’ve always wanted, which is the holy grail: to have tech integration from start to finish.” Reserve’s plans for 2018 include full POS integration from booking through payment