The Restaurant Reservations War Has Started

The restaurant reservation service Resy announced that it has acquired another reservation company Reserve.

This means Resy is making a big play to take OpenTable's customers.

OpenTable was the first to dominate the market. The online reservation service company, based in California which was formerly partnered with Yelp, was purchased by the Priceline Group in 2014 for $2.6 billion.

About 50,000 restaurants use OpenTable currently. Resy, on the other hand, serves about 10,000 restaurants but after the acquisition of Reserve, the company will be serving 14,000 restaurants.

Although this is still significantly less than OpenTable, these companies have yet to expand into most markets.

Not to mention, the pricing model of OpenTable has been criticized for being expensive.

"OpenTable, founded in 1998, charges restaurants based on the number of reservations it makes for them, in addition to a flat rate, but says it is experimenting with a new pricing model it will roll out in the next quarter. Reserve and Resy, which both started in 2014, charge restaurants only a flat rate for use of their software," writes the NY Times.

Resy has been on an acquiring spree and bought ClubKviar, a reservation service in Madrid and Barcelona, Spain in April and the company also acquired Servy, a market research service a year ago.

Resy's revenue has doubled every year for the last four years.

“We’re attacking and dismantling some very stale, inadequate, overpriced products,” said Ben Leventhal, Resy’s co-founders and chief executive in an interview last week.

According to Foodable Labs data, Resy has the highest Operator Sentiment score out of all the reservation services. This means operators are much happier with this service.

So should OpenTable be nervous? Yes.

But there is another challenge in the industry right now that could impact the growth of these reservation services.

Social Restaurant Visits are down, meaning restaurant traffic is down and fewer customers are making reservations.

Read more about Resy’s acquisition of Reserve at “The New York Times.”

Watch The Barron Report above to learn more.