Your Reservation Has Been Canceled

April 22, 2020 Admin 0 Comments

How apps like OpenTable, Tock, and Resy are pivoting to keep themselves — and restaurants — afloat in a world without bookings

Gregory and Daisy Ryan opened Bell’s, a 35-seat French bistro in Los Alamos, California, in 2018. The pair had worked in restaurants in New York, Los Angeles, and Austin before returning to Daisy’s hometown. The couple had several choices when it came to online reservation booking platforms and ultimately went with Tock, a system that they say worked so well, the restaurant didn’t even need a phone. “I didn’t want to have people sitting at the bar and listen to me explain something that someone can find on the internet,” says Gregory Ryan. “I didn’t want that to ruin someone’s experience.” During a typical dinner service pre-COVID-19, about 80 percent of guests had reservations.

Because of its location, in a small town near California’s central coast wine country, Bell’s wasn’t beholden to the early occupancy reduction mandates, and later closures, that happened so quickly in major cities like New York and San Francisco in response to the spread of COVID-19. “It wasn’t until the second week of March that we knew something was on its way — but we didn’t know what it looked like yet,” Gregory Ryan says. He tried to figure out a way to use Tock to accommodate takeout instead of reservations and events in an effort to stay open. Plus, the restaurant didn’t ever offer takeout before. “Not because we think we’re too good for it, or anything,” he says. “Because we only have two [chefs] on the line.”

But before he could figure out a technical solution on his own, he says, Tock contacted him offering a new online ordering system he could implement quickly. When he first considered takeout, Gregory Ryan says, “I was like, ‘Oh, shit, am I going to have to get a phone?’ My staff was like, ‘No, absolutely not.’” Today, Bell’s remains phone-free.

“We opened a restaurant for certain reasons,” he says. He didn’t ever expect takeout to be his business’s lifeline.

Since the spread of COVID-19 began forcing restaurants across the country to cease dining room operations, there’s been much talk about its effect on both individual restaurants and the industry as a whole. But what about the industries that support it? Reservation services like Tock, OpenTable, Yelp, and Resy are big business, and make their money by charging restaurants to use the software. Diners use them to book available tables, and restaurants also use them to manage their dining rooms’ floor plan and record notes about customers. It’s how the host knows where to seat you when you show up for your 8 p.m. booking.

Plans vary, but a restaurant can expect to pay at least several hundred dollars per month for a basic plan that includes both reservations and table management. Prices go up from there depending on additional features like custom messaging, ticketed events, or, in OpenTable’s case, the number of people it brings in the door. OpenTable collects a per-diner commission fee on each reservation it facilitates, and busy restaurants can expect a monthly bill that easily stretches into thousands of dollars.

Of all the brands, OpenTable is the largest reservations service in the U.S. In mid-March, as the national rollout of dining restrictions was just beginning, the company released year-over-year data that showed a 45 percent diner reduction in Seattle, 40 percent in San Francisco, 30 percent in New York, and 25 percent in London, Los Angeles, and Chicago. Ten days later, on March 23, every market listed on OpenTable’s COVID-19-inspired state of the industry dashboard showed a 95 to 100 percent reduction in bookings. That is: There were essentially zero reservations booked at the nearly 60,000 restaurants the company supports worldwide.

In response to the slowdown, OpenTable and its competitors have been forced to pivot as quickly as the restaurants they serve. All fairly quickly suspended most fees they charge restaurants to use their software. They’ve also proactively begun making changes to their apps and website to reflect the realities of the restaurant business today, offering both temporary and permanent solutions for restaurants that saw their operations upended overnight.

OpenTable added a grocery feature, allowing shoppers to reserve a shopping time slot at a store the same way they’d book a seating time at a restaurant. According to Andrea Johnston, OpenTable’s chief operating officer, the idea came from an OpenTable advisory board member — a restaurateur himself — who noticed that many restaurants were operating as small grocers to stay open. So far, in OpenTable’s hometown of San Francisco, just a handful of businesses offer the service, but Johnston says the company is actively onboarding several large regional grocery chains, with more to come. She confirmed that the service is free for all grocery stores and restaurants-turned-grocers, whether or not they’ve worked with OpenTable in the past.

Johnston says she’s also encouraging partner restaurants to update their profiles to reflect current operations, including delivery, takeout, gift cards, and fundraisers, which are then displayed in the OpenTable app. The company is waiving gift card fees through June; previously, restaurants paid $25 per month to sell gift cards through the OpenTable system. And at this point more than 1,500 restaurants have added their fundraising efforts to their listings, Johnston says.

OpenTable had already added a delivery category to its app in 2019. Listings are in partnership with companies like Uber Eats and Caviar, which each charge their own fees on top of the booking service. In the last month or so, clicks on delivery options within the app have grown 172 percent.

A reservations app probably isn’t the first stop for a diner looking to support local restaurants right now, and in response, these companies have had to modify their marketing strategies. To diners, OpenTable, Tock, and Resy have all begun sending emails with lists of partner restaurants open for delivery or takeout. To restaurants, they’re sending a steady stream of news, ideas, and tactical information to survive. OpenTable has launched a dedicated restaurant resource center to share news and product information related to the coronavirus pandemic, and hosts a weekly webinar series for restaurants. Resy, too, just announced a new industry-focused podcast in partnership with the Welcome Conference.

“It has been nice to see that for the most part they’ve been doing what they can to support us — obviously knowing that supporting us supports them in the long run,” says Gina Buck, general manager of Concord Hill, a small Brooklyn restaurant that uses OpenTable. The restaurant remains open for takeout, serving food and cocktails seven days per week from noon until 10 p.m.

Speaking from the middle of her new busy workday fielding, packaging, and distributing to-go orders, Buck says she isn’t sure what more reservations services could offer to help. “I think the normal before this has completely died and will never exist again,” she says. “We’re able to stay open. We’re doing okay. It’s just two of us — we can’t afford to bring anyone else in at the moment, but we are getting through this.”

OpenTable competitor Resy has also shifted its strategy to support eating at home. Instead of reservations, diners can order takeout food directly through its app and website. They select a meal option, choose a pickup time, and pay, all through the Resy platform.

Greg Lutes is chef-owner of 3rd Cousin, one of the handful of restaurants in San Francisco that’s currently offering takeout via Resy. “It’s useful, but there’s not much volume in it,” he says, noting that they’ve sold “a few meals” through the platform. He also signed up with Uber Eats and DoorDash for the first time, but says most customers just call orders in to the restaurant directly.

When a customer books a pickup on Resy, it’s communicated to the restaurant the same way a reservation would be: in an app that’s meant for a front-of-house staffer to manage. Lutes was recently surprised by a customer who showed up at the restaurant to pick up a family meal he had only just ordered. Even so, he plans to continue offering takeout through Resy, and isn’t worried about accepting orders from multiple sources. “We need all the revenue we can get,” he says. Resy has also modified the format of the restaurant pages on its website to allow operators to link to outside initiatives, like fundraisers. “It’s so that customers can see all of the preferred ways that their favorite restaurants are asking for support,” says Resy co-founder and CEO Ben Leventhal.

While all the big booking services have adjusted their functionality to meet the moment, reservations and event ticketing service Tock, used by more than 3,000 restaurants worldwide, went a step further, building out an entirely new product — in a week. Tock To Go launched March 16 for existing and new Tock customers. It allows customers to reserve and purchase restaurant meals for pickup or delivery and charges the restaurant a fee of 3 percent per order. (Tock has waived its regular monthly fees.) “We cannot operate without doing that,” says Nick Kokonas, Tock’s co-founder and CEO, who’s also the co-owner of Chicago’s Alinea Group restaurants.

Tock’s To Go system has allowed restaurants to sell completely new, exclusive-to-takeout offerings, something that’s proven useful for the kind of fine dining and higher-end establishments that Tock has become known for. In New York, Dan Barber’s Blue Hill restaurants are offering takeaway boxes of various goods at both the Manhattan and Tarrytown locations. Customers can select from a variety of options, including stews and purees, garden vegetables, grass-fed beef, dry-aged pheasant, bread, and even a sommelier-selected bottle of wine to accompany a diner’s selections.

In San Francisco, Tosca Cafe recently reopened under new ownership in the midst of the pandemic by selling family-style dinners — shrimp alfredo, spaghetti alla Norma — to go on Tock, and in LA, sister restaurants Bestia and Bavel are both offering weekly changing menus that have sold out within days of being listed on Tock. Proceeds go to maintain employee health care, and chef-owner Ori Menashe says if demand remains high, he may even be able to re-hire some staff to keep up.

Kokonas says that Tock currently supports close to 400 restaurants offering takeout across the U.S., Europe, and Australia, with another 650 in some stage of onboarding. One month in, the company already processes nearly $1 million in to-go sales per day. On one weekday earlier this month, restaurants on the platform sold 11,700 orders for nearly 40,000 meals.

“Tock is not just a booking system,” says Kokonas, “it’s a sales engine ... and it links and leverages, meaningfully and transparently, to the largest networks — search and social media.”

At Bell’s, Gregory Ryan uses social channels to promote the restaurant’s current offerings on Tock To Go, including kits for making the restaurant’s popular egg salad sandwich at home, and other a la carte offerings, like CSA-style produce boxes. Ryan likes that Tock’s system of pre-ordering gives restaurant staff some idea of what to expect each day. It also helps him know how much of which ingredients and supplies to purchase.

“That’s why takeout is always tough, because you’re never really sure when something’s going to come,” he says. “But if you’re able to wake up in the morning and know, ‘We have seven takeout orders, six chicken dinners tonight, and an egg salad,’ you’re at least working toward something. As those continue to populate [throughout the day] you’re a little bit better able to handle the information.”

He’s also happy that it’s allowed him to continue to keep 11 of his employees on payroll, though he says everyone has taken “a little bit of a haircut” on their paychecks. (Ryan and his wife stopped paying themselves completely.)

Still, even with new measures in place, not all booking platforms are pivoting as gracefully. So far, Yelp is the only major reservations provider to announce a reduction in staff, laying off or furloughing 2,100 of its approximately 6,000 employees. OpenTable’s Johnston says for them, anything related to a layoff would be “an absolute last resort.” At Tock, Kokonas says he will be hiring soon. “We never really stopped,” he says. “The only tricky part to bringing on new employees is training... We will figure that out.”

As they work to support restaurants, executives at reservations companies are asking the same questions as chefs and restaurateurs: How long will this last? Will anyone even want to come and sit down for a meal in a few weeks? “Restaurants are going to reopen at some point with occupancy restrictions, extra and important safety measures, and lower demand,” says Kokonas. “Yet — and this is very important — the fixed costs of rent and utilities remain the same, and the business model was built with high demand in mind.”

Leventhal indicates that Resy would likely continue to support its expanded initiatives in the future, but stops short of confirming any product changes. “This is without a doubt a reset moment for the industry,” he says. “Evolution, innovation, and creativity are going to be crucial for restaurants, and the tech platforms that support them, to survive in a post-COVID world.”

Tock To Go is now a permanent part of Tock’s functionality moving forward, built directly into the product’s dashboard. It’s an acknowledgement that the industry isn’t going to go back to “normal” anytime soon, and much about the future of the industry is unknown. “Will there be a market for $35 takeout meals in 2022? Who knows?” says Kokonas.

For OpenTable, Johnston says the company will continue to offer new options as long as restaurants need them. “I hope that the world won’t continue to need a product that supports grocery store reservations,” she says, “but we will keep it free and available as long as necessary.”

Disclosure: Resy’s Ben Leventhal was one of the co-founders of Eater, but is no longer involved in its operations.

Kristen Hawley writes about restaurant operations, technology, and the future of the business from San Francisco. She’s the founder of Expedite, a restaurant technology newsletter that’s existed, in some form, for the last seven years.