Consumer Trends

Big names vie for a seat at the table

Why online reservations are the hot ticket.

To quote the host of  CNBC’s Mad Money, Jim Cramer, “There’s a war going on for your handheld!” In the past 13 months, four big fish—Priceline, TripAdvisor, Yelp and Google—have gobbled up companies in the online-reservations business to the tune of more than $2.8 billion.

Restaurant bookings are a natural extension, analysts say, for Priceline, which acquired OpenTable in June, as well as for TripAdvisor, that finalized  its buy of  LaFourchette, known as the “The OpenTable of Europe,” in May. Yelp’s and Google’s moves are a bid to strengthen their ties to local businesses by offering a package of web services, including online reservations.

They’re not likely to get much pushback from restaurateurs. Danny Meyer, who invested in OpenTable 15 years ago and serves on its board, told Cramer previously that restaurants love the service, because they get to fill tables that would otherwise go unturned. Plus, its big-data capabilities,  “give us a chance to know who is dining in our restaurants,” he said.

TripAdvisor’s purchase of LaFourchette adds another player to the arena dominated by OpenTable, which handles half the reservation-taking restaurants in the U.S. While LaFourchette currently operates in Spain, France and Switzerland, expansion is in the near future (though it hasn’t specified where).

Also, where restaurants pay $1 to OpenTable when a diner makes a reservation (plus setup and subscription fees), Yelp’s SeatMe offers an alternative, charging a flat fee of $99 a month. Yelp Reservations, which rolled out in May, is no frills and free. As one operator using SeatMe told the Idaho Statesman newspaper, “I hope that breaks the OpenTable stronghold. It needs to be a fair market.”

For consumers, more access to online reservations is a win, too. According to a 2013 National Restaurant Association study, 41 percent of people have used a computer to make online reservations, view menus or order food, and 70 percent say the ability to make reservations is an important feature in a restaurant’s smartphone app

Meet the players

ServiceWho's behind itReach
SeatMeYelp400 restaurants
Yelp ReservationsYelp"Thousands of restaurants
TripAdvisor13,000 restaurants in Spain, France and Switzerland
OpenTablePriceline24,000 restaurants in North America, 7,000 overseas

*Google immediately absorbed Apetas and its talent to work together to “create something even better.”

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