Study Seeks to Develop a Strategy for Maximum Benefit from Restaurant Reservation Sites

The use of online restaurant reservation sites has grown astronomically in a relatively short time, leaving many restaurateurs to wonder whether the benefits of such sites are worth the cost—especially since the telephone continues to be by far the most common way to make a restaurant reservation. A study by Sheryl Kimes and Katherine Kies,”The Role of Multi-Restaurant Reservation Sites in Restaurant Distribution Management,” is aimed at helping restaurateurs understand who is using online reservation sites and how they use them. Kimes is the Singapore Tourism Board Distinguished Professor of Asian Studies at the Cornell School of Hotel Administration. Kies, a graduate of the School of Hotel Administration, works with New York-based consulting firm Avero. They found that the use of multi-restaurant reservation sites (such as OpenTable) is growing rapidly, particularly among younger consumers.

“We know that reservations made through the multi-restaurant sites cost more money than other channels,” said Kimes. “But we have learned that the people who use those sites the most make up an important demographic. These people are generally younger than other customers, and they dine out more frequently. Perhaps most interesting, they use the reservation sites to find a restaurant to visit.”

Kimes and Kies found that once they find an interesting restaurant, guests don’t always continue with the multi-restaurant site to make their reservation. Some switch to the restaurant’s website and many still pick up the phone. What is not clear is what effect the growth of restaurant reservation apps will have on these patterns. Also not clear is the level of cannibalization: that is, the number of reservations that come through the multi-restaurant sites that would have been made anyway. Kimes and Kies conclude that the cost of multi-restaurant sites could be as much a marketing expense as a cost of distribution. Their study is available at no charge at http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15979.html.