An increasing number of diners are using the network to make their restaurant reservations. In this column I will comment on a study conducted with people who use websites such as OpenTable to make reservations in different restaurants.
by Glenn Withiam*
For restaurant owners the question is whether participating in these online booking systems for multiple restaurants justifies the investment. While I couldn't say what's best for a particular restaurant, I can make available to you information that allows restaurant managers to determine their table reservation strategy.
For starters, despite the popularity of online bookings, the phone is still by far the most common method of booking. However, it is clear that many of the people who make phone reservations use a booking website to locate a certain restaurant. Once they identify a restaurant they are interested in on the network, these consumers pick up the headset. Those who prefer the phone, say they like to talk to someone or want to have a personal connection with the restaurant.
The popularity of online bookings is shown in a recent study, conducted with 474 American diners, led by Sheryl Kimes, a Cornell professor, and Katherine Kies, a graduate of the school of hotel management. Approximately half of the participants who responded to this survey had made a reservation online, both through booking websites for different restaurants and through the restaurant's own website.
Many of these online consumers also used a cell phone app to make their reservation.
Kimes and Kies found that customers who made online reservations tended to be younger than those who didn't use the internet. Beyond this age difference, customers who used booking sites tended to dine out more often than others. These young, active consumers preferred to have several restaurants to choose from and tended to rely on the reviews they found in online reviews.
Thus, we can imagine a situation in which a person wants to go out to eat at a restaurant, open a reservation website to see a list of available restaurants, and then consult online reviews to specify their options. At this point, this type of consumer can stay to book on the booking site or can go to the restaurant's website to make it. Or, as I said before, you can use the phone.
There is no doubt that for restaurant managers the cost of a reservation is higher if they implement this service through a website, compared to what it would cost to do it on the restaurant's own website or by phone. Part of this expenditure could be considered an investment in consumer information.
Kimes and Kies cite the case of The French Laundry, a restaurant in California's Napa Valley, which makes only one or two tables available to the online booking site. Thus, the restaurant gains in basic information about customers and can keep track of their preferences.
This strategy suggests the possibilities of using mixed booking channels. Participating in online booking sites for different restaurants can be a way to position the restaurant's name with new customers. Kimes and Kies acknowledge that with booking sites a restaurant may be paying for some bookings that could have been made through another channel, but, apparently, the potential for expanding means of bookings would offset some of this problem.
Regarding the above matter, the manager of a restaurant could consider the cost involved in using a multi-restaurant reservation site as a marketing expense, almost as a distribution cost. These sites offer associated services, such as e-booking books and a table management system.
In conclusion, the phone is still a privileged distribution channel, but given the demographic information of those who are using the network to make their reservations, restaurant operators must seriously analyze the costs and benefits of booking sites to make the best decision.
* Director of Publications for the Cornell Center for Hospitality Research.
