The OpenTable website on a mobile phone arranged in Dobbs Ferry, New York, May 1, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images
Under pressure from rising costs and still feeling the hangover from pandemic losses, restaurants are embracing reservations that target higher-income diners as more consumers book their tables ahead of time.
The pandemic changed how many people ate out, driving food delivery sales higher and hobbling buffet-style eateries, a segment that was already struggling. But one of the lasting changes to dining behavior has been the increasing popularity of reservations, particularly those made online.
When cities and states rolled back lockdown rules, many implemented new orders for restaurants to help with contact tracing, such as requiring customers to book tables in advance. Even after vaccination requirements disappeared, higher demand for reservations has stuck around. Booking Holdings’ OpenTable reservation service said in 2022 that it connected more than 1 billion people with restaurants every year. That number has climbed to more than 1.5 billion consumers, as of Monday.
“We definitely see that the demand and love of restaurants has been unleashed,” said Hannah Kelly, chief marketing officer of Resy, OpenTable’s main rival.
‘Top customers’
As a result of those pandemic-fueled changes, restaurants and the companies that help them book their tables are targeting big spenders with premium reservation options to drive higher sales. The strategy echoes the broader push across industries to encourage customers to pay more for better experiences, such as they can get by buying airlines’ first-class tickets, Tide’s laundry detergent pods and Apple‘s AirPods Pro.
“It’s not just about getting bodies in the door anymore,” SevenRooms co-founder and Chief Product Officer Allison Page told CNBC. “It’s making sure the restaurant is getting the right body in the doors, whether that’s customers that visit frequently or have a higher average spend per cover.”
With backing from Danny Meyer’s Enlightened Hospitality Investments, SevenRooms offers restaurants tools such as online ordering, waitlists and reservations — and then it shares more customer data with them than Resy and OpenTable do to help them target specific diners.
About two-thirds of SevenRooms’ restaurant clients use its software to promote special experiences or sell upgrades when customers book reservations. Page said the move toward premium restaurant reservations can partially explain why it feels like it’s so much more competitive to book a table in advance these days.
“A lot of those reservations are being saved for top customers,” she said.
For example, booking a table at celebrity favorite Carbone in Las Vegas will be nearly impossible for the average diner. But MGM Rewards members who have at least gold status will see more desirable reservations available, thanks to SevenRooms.
Similarly, Resy’s Global Dining Access program offers exclusive reservations at some…
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