CHOICE membership

Best way to support food and drink venues: Phone bookings or online bookings via third party platforms?

Our group is having a discussion on whether there is significant or any difference in booking via third party platforms (when it is linked directly as an iframe or widget on the restaurant’s website) or phoning up.

My argument is that phoning up takes up staff time whose wages is more expensive same or trivially more expensive then booking online even if via third party platforms such as the fork or quandoo whose business model depends on charging the restaurant.

My acquaintance’s argument is that the time it takes to review and confirm online bookings leads to a greater cost overall. However he may not realise that the fork offers a reservation as a service which means the restaurant booking system is directly synced up with the web site. This means no confirmation or review costs.

So which is correct? If the costs are similar then like with credit card/Amex points it’s better to book/pay via third party platforms to extract referral incentives. Most of these third party platforms I believe are supported like Uber by venture capitalist’s money whose hoping to gain market share for future cheap drone delivery.

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Booking platforms cost the consumer substantially more in the long run. Possibly in the order of the commissions these platforms charge the business for the order/booking.

While a business may have to allow in its cost structure a minute or so to alllow one of its staff to take a booking (which say at $20/hour would be around $0.50). When one looks at booking platforms which charge up to 35% of the order value (could be $10 for a small $30 order), this charge also needs to be allowed fòr in the business cost structure.

When more and more customers book through online platforms, the net income of the business would be significantly less than that which occurred before the business subscribed to the booking platform. The end result is that the business increases prices to try and maintain its net income as other costs (labour, consumables, rent, energy etc) remain the same.

Increasing prices in the accommodation industry due to increased customer use of booking platforms (which is more mature than food industry) has occurred and is why most accommodation providers can offer discounts when accommodation is booked directly through them (calling, email etc). The same is expected in the food industry in the future.

Convenience of online booking platforms to the customer may appear that the costs the customer pays is the same, but all customers pay more for this overhead as these new costs cause price rises and are spread over the products and services the business provides.

Disclosure: we own an accommodation business which uses booking platforms. The popular platforms charge between 10-15% for bookings through their sites and such costs are passed onto the consumer indirectly through (hidden in) higher prices.

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A fav restaurant in the Melbourne CBD has an online booking service that came with a full booking software package. I don’t know about the upfront costs but know the venue pays a flat $2 per booking made and attended.

The main overhead is adding manual bookings to the on-line system rather than ‘confirming’ on-line bookings. During peaks (eg major holidays, F1 time, Grand Finals, Melbourne Cup, and so on) their on-line system will automatically (re) confirm bookings via SMS responders, so lots of value added.

No takeaway involved for this venue.

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Is there an alternate proposition, similar to the online accommodation booking business model or the now common GP/Specialist Management products? None ‘are correct’ is also an outcome, and likely desirable.

Is the endpoint to ensure only one way to obtain a service? That is by booking through a third party or facilitator who takes a cut.

The risk is the market comes to be controlled by a few most successful big businesses. Think of Uber as one example and Google and Amazon as the leaders.

As a consequence do we risk cafes, restaurants and takeaway food services become sub-contractors to the online services facilitator?

While not throwing stones at Uber et al, we are also our own worse enemies when we choose to use the third party rather than book direct. That Hoo-gle does not already own this sector is only a consequence of it appearing too greedy or omnipotent. In some ways it already does. Getting your business to the top of the search listings is more than good luck. It’s a commercial decision and cold cash investment. While some of the alternatives are subject to manipulation, resource dependant.

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What is hoo-gle? Are you just trying to avoid keyword alerts to alphabet?


As to my purchasing behaviour I’ll elaborate below:

I’m still using the third party platforms as they provide discounts without me having to negotiate or record visits. However I am also reviewing on Hoo-gle and on the third party platforms so food and drink venues get publicity if the venues are good.

What has your experiences been? How has the market changed in the last two years?

IMHO the more direct interactions with venues and the like the better.
If its really better for them they’ll push you to use said extra services whilst you are on the phone or when you show up. Either way if you’re not going to show up let the venue know.

take “CC’d” examples:
Mastercard/Visa ~1%
AMEX/Dinersclub ~3-4%
PayPal and others like it I’ve heard easily up to 7%.

EFT/EFTPOS transactions don’t typically incur such fees&charges.

In two years of Covid nothing was or is the same.

“Hoo-gle” as I referred to it remains omnipotent when it comes to returning places to eat. All based on ‘your location’. Assuming GPS tracking is accessible.

P.S.
When away from home territory, I find Trip Advisor a great resource, and book direct using the phone. The best is often asking a local, eg the staff at the motel etc for a recommendation.