Zagat’s restaurant handbook with its citizen ratings was about the only US guide for diners to nibble on in 1979. Almost a decade later, OpenTable spiced things up with online reservations. iPhone mobile apps introduced another element. Now the restaurant industry is being whipped up again with a new generation of reservation services, to help celebrate your favorite graduate, host a rehearsal dinner, or laugh with dad.
Boston has recently seen the debut of Yelp SeatMe searches and reservations, mobile-only Reserve is another system, and a youthful rebranding of OpenTable includes an app that pays the tab. At least one area restaurant, Journeyman in Somerville, uses an online reservation and prepaid format developed by an owner of Chicago’s Michelin-blessed Alinea.
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Meanwhile, new systems are being tested in New York, San Francisco, and Los Angeles. Using mobile apps Resy, Killer Rezzy, and Table 8, diners can pay a fee ($2 to $50) for tables at hot restaurants and buy reservations from scalpers like Shout. “The industry is evolving in front of our eyes,” says Ron Schneidermann of Yelp.
Now many startups are pushing into the market, offering unprecedented opportunities. “Online reservation systems have become more important than anything else [restaurant owners] are doing,” says Christopher Muller, a professor at Boston University School of Hospitality Administration and its former dean. “They have leveled the playing field. The smallest, most local business can be competitive.”
Diners also benefit. “Five years ago, weekend foodies might have hesitated to try something new,” says June Jo Lee of The Hartman Group, a research and consulting firm in Bellevue, Wash. Today, she says, with the new apps, they’re “being exposed to the wider world through eating.”
In 2013, industry leader OpenTable had as members more than 40 percent of the 55,000 reservation-taking restaurants in North America. But that’s a fraction of the potential. There are almost 673,000 restaurants (about 444,000 independents and about 229,000 chains) in the United States, according to CHD-Expert, a data company.
Greg Hong, CEO and cofounder of Reserve.
Reserve, though a recent addition, is challenging OpenTable’s dominance (the app is not connected to UReserv, a Belmont-based app). Reserve, which operates in five cities, including Boston, closed on $15 million in venture capital investments in February. The app aims to provide a curated experience and tries to secure difficult-to-book tables. “We’re very much a dining concierge,” says CEO and cofounder Greg Hong.
Deborah Hansen, chef and owner of Taberna de Haro in Brookline and a former OpenTable user, was among the first locally to join Reserve. “They’re vetting customers for us and the customers thus far are very restaurant savvy,” she says. She found OpenTable “terribly expensive,” with diners focused on getting times they wanted.
About 60 Boston-area restaurants have partnered with Reserve (the system is free to them). Diners submit a table request and receive text updates from Reserve confirming availability. Once the meal is finished, diners are automatically charged a $5 fee on the credit care on file. Comments about the experience are shared privately with the restaurant.
OpenTable, free to diners, charges restaurants for monthly services, and installation fees for equipment that helps manage the system. Restaurants pay $1 per seated diner booked on the app, 25 cents if booked on a restaurant’s site. The app requires restaurants to surrender some control over their tables, and many are OK with this tradeoff. Area Four in Cambridge began using OpenTable in October. “It gives us more visibility and guests expect to be able to reserve online,” says Joe Barone, director of operations. The system also tells him if a guest has been there before. “Then I go over and I say hello.”
The Hartman Group finds that 46 percent of adult smartphone owners “recently used a restaurant review or booking service” and the majority are millennials. New systems are clearly targeting them. Whether millennials will pay for reservations is another question. Reserve’s $5 fee doesn’t trouble Floyd Miller, 28, of Cambridge, who uses Reserve because “I like the concierge part. A real human is finding me a table and a table not posted anywhere else.” But Nina Jreige, 23, also of Cambridge, who uses OpenTable through her laptop and phone, is leery. “If I dine out 15 times a year, then 15 times $5 seems excessive,” she says.
Ultimately, the biggest challenge for all the apps is to convert restaurants disengaged from the Web. “A lot of places still use pen and paper to manage reservations,” says OpenTa-ble executive Scott Jambol, “and 80 percent of reservations still happen via phone.”
Yelp’s Schneidermann believes Web holdouts are finally catching on. “Restaurant owners now realize the Internet is not going away,” he says.
– Reserve app gets you seated at that table
Peggy Hernandez can be reached at [email protected]