Airbnb and Priceline/Booking.com are already locked in combat in the alternative lodging arena, where Booking now has over 720’000 instantly bookable rental listings, compared to Airbnb's two million instantly bookable properties.
Now it looks as though Airbnb's Resy platform is set to challenge Priceline's OpenTable, the world's leading online provider of restaurant reservation services to consumers and reservation management services to restaurants, which was acquired by Priceline in 2014 for US$2.6 billion.
OpenTable seats more than 23 million diners per month via online reservations in some 43’000 restaurants.
In addition to the company's website and mobile apps, OpenTable powers online reservations for nearly 600 restaurants, including many global and local brands.
TripAdvisor is also competing in this segment, following its acquisition of the French reservations site Lafourchette and other similar sites.
Both Priceline and TripAdvisor have not integrated these acquisitions into their main businesses as Airbnb has done with Resy.
Airbnb's investment in Resy
In January 2017, Airbnb announced that it had led a US$13 million investment in Resy, a New York -based dining reservations platform.
In September, Airbnb said that it was expanding an earlier pilot programme initiated in May, which allows Airbnb app users to book restaurant reservations, powered by Resy.
Launched in New York City in 2014, Resy provides operations software for about 1’000 restaurants in some 80 markets across the US. Resy's co-founder Ben Leventhal noted that Resy plans to begin expanding globally during the fourth quarter of 2017.
Airbnb has also said that the restaurant reservations feature will eventually be available in all the languages currently supported by the company on its site and app, as well, thus making it easier for travellers to book in foreign countries where they may not speak the language.
How is Resy different from OpenTable ?
In contrast to OpenTable, which has dominated online restaurant reservations for nearly 20 years, Resy and its peers, such as Reserve and Tock, operate with a different business model.
Whereas OpenTable charges its restaurant customers a monthly fee of between US$.25 and US$1 per diner, per reservation, Resy and other similar platforms charge their restaurant customers a flat monthly fee.
“The prospect of these platforms is two-pronged for a restaurant,” notes Simon Yi, a former marketing manager at Resy's competitor, Reserve, who adds, that “Restaurants are being gouged by OpenTable.
The promise of OpenTable is that they have a network of diners that new or struggling restaurants can tap into to make bookings and facilitate discovery and get people to walk through the door.
But in reality, what OpenTable has done, to date, is essentially play arbitrage on Google AdWords: advertising against a restaurant’s own brand name and having restaurants pay a markup on what OpenTable pays on a cost-to-click basis.” (This comment could also be applied to Booking.com's relationship with hotels.)
Resy can grow under the wing of Airbnb
According to Yi, these fees “created a big opening for Resy and Reserve and other similar startups that can undercut OpenTable by charging a flat fee instead of a per-diner fee. It’s great for the restaurants as far as saving money goes.”
Being part of Airbnb should extend Resy's reach in terms of brand recognition to allow it to compete effectively with the market leader, OpenTable.
In a sign that OpenTable may be starting to feel the heat of competition, in December 2016, the well-known restaurateur, Danny Meyer CEO of the Union Square Hospitality Group, who is also a board member of OpenTable, announced that he would use Resy at his reopened Union Square Café in New York.
There, managers will pilot a new programme, ResyOS, whereby their Apple Watches is synced to Resy, helping them manage reservations and acting as a sort of customer relationship management tool or loyalty programme keeping track of diners’ preferences and dining habits.
The Apple Watch syncing feature is now available for any restaurant to purchase as part of the package with Resy.
Resy also has an automated waiting list function that alerts users when a table opens up at a hard-to-book restaurant and it enables diners to communicate directly with restaurants by texting them within the app.
The Resy integration with Airbnb also allows for text communication between diners and restaurants, and Leventhal has said that the automated waiting list function will be expanded into Airbnb, too.