Sites can sell seats

Online table booking for restaurants has proved slow to catch on in the past, but it is now being used effectively in the battle against the current slump in trade. Susan Low reports.

The phrase "since 11 September" has been widely used by every journalist since… well, since 11 September. The hospitality and tourism industries have been particularly hard hit in the subsequent downturn. Last year, as in previous years, the UK was the top European destination for more than four million US tourists; this year, Reuters estimates that Britain stands to lose $3.7b (£2.55b) in revenue as tourists stay at home.

According to Peter Backman, chief executive of Foodservice Intelligence, a hospitality industry information specialist, revenues in restaurants for October 2001 were down by 13% on October 2000 figures. London, it seems, has been the main victim. "Where [the downturn] is happening is in the South," Backman says, "particularly hotels and restaurants in the centre of London."

Given the gloomy economic climate, could it be time for restaurateurs to get creative about how they fill those empty tables? If so, one way to do it may be through online table-booking agencies.

Tough market

Several such sites have been set up by entrepreneurs in recent years, although the market, as with all things associated with the dotcom world, has not been an easy one to crack. In June 2001, Book2eat.co.uk closed after just 10 months in operation. The site, which had been funded to the tune of £1.9m by mobile phone company Orange, listed among its clients Zaika, One Lombard Street and Che. However, it failed to attract enough top restaurants and financing was withdrawn.

Another player, the San Francisco-based DinnerBroker.com, once listed London destinations such as the Collection, Passione and Canyon on its site. According to a spokesman at Events Media Management, which was handling the company's UK clients, the firm was unable to attract enough financing to keep trading and has since pulled out of the UK market.

Despite the fallout, surviving online booking companies are reporting that business has been brisk of late. One reason put forward is that restaurateurs are seeking new ways of marketing themselves to a more cost-conscious public, particularly as one of the main functions of the surviving booking sites is promoting special deals to their users.

Karen Hunter, managing director of Toptable.co.uk, says: "The immediate impact after 11 September was as if the world had undergone a trauma. Just after that, our business coming in was 10% below what we had expected - a tangible impact. But then we hit some peaks in October; there were two consecutive weeks in which we had significantly more bookings than we had expected."

Charles Shaw, chairman of Glasgow-based 5pm.co.uk, which operates in Glasgow, Edinburgh, Leeds, Manchester and London, has witnessed a similar scenario. "We have seen an increase," he says. "We were afraid that the world was going to stop after 11 September, but we have actually seen business grow. To try to rationalise, it may be because we are offering sizeable discounts to the consumer. It may well be that they're saying, ‘Things are getting tighter; maybe I'll take advantage of the deals that are around'."

In the previous three-month period, Shaw says, 5pm.co.uk had seen 20% growth, month on month, in the number of tables booked. Three months ago, there were 650 restaurants listing special offers; now there are 850. Restaurants, he says, are now coming to him, rather than vice versa. "We've gone from having an active sales force to not needing a sales force at all," he says.

The advantage to the consumer is easy to understand. As Hunter puts it: "In bad times, people still want to eat and drink as a means of seeking comfort, but at a reduced level."

But, what's in it for the restaurateurs? Access to consumers who want good deals, Hunter says. "We have more than 50,000 [consumer] members," she says. "They're signing up at a rate of 1,000 a week. What the restaurants get is access to a focused group of people."

Chef Aldo Zilli of Zilli Enterprises, which owns and operates five restaurants in central London, is usually reluctant to advertise his restaurants, but has signed up with Toptable.co.uk. His threatreland Zilli Fish Too has suffered from a downturn since 11 September. "At times like these," he says, "ordinary advertising doesn't work. I don't know why people book online, frankly, but I find that, if we have special offers, then it works."

One thing that some restaurateurs have found is that, by offering consumers good deals they can increase custom during traditionally slow periods. John Martin, operations director of Est, Est, Est and Garfunkel's restaurants, says: "It does drive people through the door in slow times, because there's an incentive with the special offers."

Since June 2001, Est, Est, Est has been trialling online booking through 5pm.co.uk. Although Martin points out that it's still early days, he says five to 10 bookings a day per restaurant is average. Est, Est, Est restaurants have had most success in Glasgow and are building "slowly, slowly" elsewhere.

At this stage, online booking does not yet count for a huge percentage of tables booked at most restaurants. The willingness of restaurateurs to "do deals", though, does seem to attract more custom. However, online booking offers restaurateurs a new, versatile, fairly low-cost and low-maintenance marketing tool. As Martin puts it, for the restaurateurs and the booking companies: "It's a you-win, we-win situation."

Online booking services

5pm.co.uk

Contact: Ronnie Somerville
Tel: 0141-420 3080
Based: Glasgow
Cities: Glasgow, Edinburgh, Leeds, Manchester, Oxford, London; at the time of writing, it was working on a roll-out in Newcastle-upon-Tyne and Bristol
How: 5pm liaises with the restaurant to sort out its special offers. There is no joining fee. Restaurateurs don't have to install software but do have to have a fax machine and confirm bookings. The restaurant is charged £1 by 5pm.co.uk for every cover booked through the site. Customers can see details of each restaurant on the 5pm.co.uk site.

Lastminute.com

Contact: Jeff Tozer
Tel: 020 7802 4524
Based: London
Cities: Mainly London but, at the time of writing, a countrywide roll-out was planned
How: Restaurants are charged a joining fee of £235, which covers administration and hosting. Restaurateurs receive a monthly newsletter. Lastminute.com has 2.1 million registered users, to which certain deals may be advertised as part of a weekly newsletter to consumers. On tables booked through the site, there is usually a £2 minimum commission, but charges are negotiable, in accordance with specific deals. Restaurateurs do not need to install hardware or software, but must have a fax and must confirm bookings made through the site.

Squaremeal.co.uk

Contact: Mark de Wesselow or Simon White
Tel: 020 7582 0222
Based: London
Cities: London only
How: There is no joining fee to the restaurant as Squaremeal.co.uk considers table booking a service to its users. It has about 70 or 80 restaurants on its site, which uses software from QuadraNet. For every online transaction, the restaurant is charged £1 per cover, most of which goes to QuadraNet (with Squaremeal.co.uk taking a small cut). Customers can see details of each restaurant on the Squaremeal.co.uk site.

Toptable.co.uk

Contact: Andrea Afrifa
Tel: 020 7821 8454
Based: London
Cities: UK-wide, plus Paris
How: Restaurants pay an initial £200 joining fee. For that, Toptable.co.uk builds a micro-site for each restaurant, with 360º photography and details about the restaurant. Restaurateurs allocate a set number of tables per week to Toptable.co.uk and must honour those bookings. In return, Toptable.co.uk gets £1 for every cover booked online. Restaurants do not need to install any special equipment. The site is backed by chef Gary Rhodes and Sir Alex Ferguson, manager of Manchester United Football Club.