- Resy, the nation’s largest privately-held reservation service, has acquired competitor Reserve, which works with about 1,000 restaurants in Chicago, Washington and Boston, according to a company release. Financial details of the deal were not disclosed.
- The deal brings Resy’s footprint to about 4,000 restaurants in the U.S., including outside of its core markets — New York, San Francisco and Los Angeles — and to 10,000 restaurants worldwide.
- In an interview with the The New York Times, Resy CEO Ben Leventhal said the company’s revenue has doubled in each of the last four years it has been in existence, and now seats about 1.4 million diners a week.
OpenTable is still by far the largest reservation service, used by nearly 50,000 restaurants around the world, compared to Resy’s 10,000. But Resy’s expansion shows that the original reservations service may finally be facing some formidable competition 20 years after its creation.
And, Resy seems up to the competition. In what appears to be a subtle nod to OpenTable, Leventhal told The New York Times, “We’re attacking and dismantling some very stale, inadequate, overpriced products.” OpenTable, for example, charges businesses based on the number of reservations it makes for them, in addition to a flat rate. Both Reserve and Resy charge restaurants a flat rate for use of their software. As restaurant operators battle persistent headwinds such as labor costs and commodities, even nominal cost savings can be huge.
Resy is hardly the only new-ish competitor in the space. There’s also Tock, Yelp and CityEats, and nearly all of them are offering more attractive deals and newer technology, according to the New York Times. Meanwhile, OpenTable’s parent company Priceline announced a reduction in investments last year.
Resy seems focused on creating a more robust service than just restaurant reservations, acquiring luxury reservation service ClubKviar in the spring, as well as a market research service Servy last year that will be rolled into its system. The latter acquisition has perhaps the biggest potential to catapult Resy into a stronger competitive position, as the research software will allow restaurant customers to gain insights about their customers. Such personalized data is critical now in such an intensely competitive market and restaurants are likely to be attracted to that feature.
Despite Resy’s momentum, however, there remains an uphill battle. Two-thirds of reservations are still made over the phone, according to Yelp. But the consolidation of two tech-savvy, nimble startups focused on customer data and personalized service can help change the tide.