Are restaurants being robbed?

Here at favouritetable we like to keep our weekly blogs upbeat and light hearted, because there is plenty to be downbeat about given the last sixteen months or so. Running a restaurant is a difficult profession at the best of times and as huge supporters of restaurateurs we do enjoy bringing our readers useful information, hints and tips together with the occasional conversation piece, as today.

This week, however, we're going to reflect on a darker and what we see as a troubling issue within the sector. Are restaurant owners being robbed by the online booking companies?

Let's get one thing out of the way before we start: the big restaurant booking companies have done a great job in disrupting the sector and helping change the way consumers interact with their favourite brands. The use of the web as a tool for restaurant booking has now normalised in response to changing customer demands and in part been accelerated by the arrival of the pandemic. Customers are using the web for so much more, from holding meetings to booking in-house dining and take-aways. That's the world we live in right now, and thank goodness those technologies exist.

Given the availability of these technologies and the need to maximise their businesses, it comes as no surprise that restaurant, café and bar owners have embraced the web revolution to enable customers to book tables online. Restaurants simply sign up, and the big companies bring them a load of new bookings for a small fee. Fantastic, right?

Well, not quite. Sure, restaurants will receive bookings and in many cases fill their restaurants, but would these bookings have arrived regardless, in the right circumstances? In many cases, the answer is “yes”. Let us explain.

The large online booking companies do bring new customers, for a fee. That's their job and we salute them for it. But what about customers who already know about a restaurant, have or haven't tried it before and want to use the web to find the business's website and book online? Their usual route is to type the restaurant's name into Google and find what they're looking for at the top of the results. A quick click and they're on the restaurant's site and ready to book direct.

This is where things get a little murky, however, because if the restaurant has chosen to send its availability to one of the big restaurant booking apps, that app will have pre-populated its algorithm to return its own result in the searches, highlighting the name of the restaurant and thus pushing its own listing – featuring the restaurant concerned – to the top of Google's list. The would-be diner then naturally clicks on that link and makes a booking – what's not to like for the booking-hungry restaurateur?

The answer is nothing, if the restaurant is happy to pay a commission for a booking which they would have received anyway, had they installed online booking functionality to their own website and were not signed up to the consolidator. 

In effect, by the time a customer types in the name of the restaurant to Google, the hard part of the customer acquisition is done: the customer knows which establishment they wish to book with, their decision is made and their money is ready to land in that restaurant's cash drawer.

What actually happens is that at the very point the customer uses the restaurant's information capital to search for a specific restaurant (name, location etc), the booking consolidator hijacks that information to show their representation of the restaurant's listing at the top of the Google page. That then creates a booking route via their own site and one which the booker is happy to click on. They then re-package that booking as new, send it back to the restaurant with a fanfare and take a slice of the profits. 

We don't quite understand why some restaurant owners are happy for this to happen.

Restaurant booking consolidators will always have more online power to appear at the top of Google search results than a restaurant's own humble website, but – and here's the key – only if the restaurant is signed up with them. Non sign-up by the restaurant equals no use of the restaurant's name, location and key information by the consolidator to present a legitimate booking route to sit atop the search results: the restaurant's own listing will then come first.

The solution for restaurants looking to provide a direct booking route for customers who have already made up their mind is threefold:

1. Add an online booking button or calendar to their website;
2. if necessary, do a little work on their search engine optimisation (“SEO”). This may sound like a black art but it is really not: basic but effective SEO can be done for peanuts;
3. Leave the online consolidator.

By doing this, restaurants will capture bookings directly and cease their hefty commission bills. 

Happily there are solutions out there which provide the technology for restaurants to have their own online booking portal, meaning they can avoid falling into the trap of giving away their profits to the big online consolidators. 

Even better, many are willing to offer just the booking functionality on a stand-alone basis if the restaurant really doesn't want the high-tech management software which usually accompanies it and are happy to use a paper diary or spreadsheet.

Wrapping up

Restaurant listing sites can play an important role in bringing bookings from genuinely new customers, but restaurants who inadvertently send customers who search for them by name to one of the big booking companies are simply throwing money away. 

Perhaps a way to think about it is as follows: a diner walks into the restaurant and orders a steak. The restaurant then informs an agent about the order, who re-writes it, gives it back to the restaurant to fulfil and takes a cut for the privilege. That sounds like daylight robbery to us.

By spending a tiny amount of time improving their own website's booking functionality and taking the decision to move away from the big online consolidators, restaurants can feel satisfied that they have removed an unnecessary and costly link in the customer journey while maintaining exactly the same online experience (and outcome) for the customer.

So, coming back to our original question: are restaurants being robbed? Well, let's not end on too much of a negative and just say that the large online consolidators are onto a very good thing (until they're found out). 

Food for thought?

favouritetable is the leading provider of easy to install, easy to use restaurant management software, designed to make owners' lives easier and more efficient. For over a decade, favouritetable has provided world-class and commission-free systems to enable restaurants, pubs, bars and other businesses to maximise their revenue and create seamless workflows which make owners, staff and customers happy.

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