【Local】Reservation apps match empty tables with empty stomaches

Busy Hongkongers love eating out. They are the biggest spenders on food in the Asia Pacific region, spending an average HK$1,771 per person every month, according to a survey conducted by MasterCard. Seizing business opportunities in the food and beverage (F&B) industry, several foreign firms have launched restaurant reservation platforms in Hong Kong with discount galore. Such bait has created a heat wave of downloading these mobile apps.

The MasterCard survey also showed one-third Hong Kong diners (37%) would book tables for meal through mobile apps and discount websites. These channels include local restaurant review platform Openrice, overseas-based discount restaurant reservation players, BigDish and Eatigo etc.

 

Diners enjoy hefty discount in no-peak hours

BigDish entered Hong Kong in December 2016 following its establishment in the Philippines and India. They learn local dining-out culture and lure diners by hefty discounts during non-peak hours.

‘Restaurants might have to face an idle time when there are no customers but the fixed costs such as electricity and salary still exist. Cooperating with an online reservation application by offering discounts as an incentive to attract diners will be beneficial for their business,’ said Frances Ng, manager director at BigDish.

Having approximately 500 to 1,000 bookings monthly in Hong Kong division, Frances said, “Our target restaurant partners are local-orientated aiming to serve students and white collars,” Recently, its discount offering has extended to the desserts restaurants.

 

Dim booking numbers during off-peak hours

Despite having discount on customers’ bill, the off-peak hours booking number is dim. Based on the interviews of several restaurants with different price level and popularity, the response of off-peak hour discounts is cool.

Flaming Frango waitress Jenny said that they did not see a significant sales growth during off-peak hours — tea time after offering a 50% discount through booking apps. Another restaurant, Pizzeria feels the same way. 'We have joined reservation apps for a few months, there are no bookings received during off-peak hour so far,' said Subash Shahi, assistant manager of Pizzeria.

Different restaurants would have different aims of cooperating with discounts apps. Some consider joining reservation apps as a promotion. "We are popular enough and we do not rely on online reservation apps," said Yin, waiter of ChiChiCham said. Since joining the booking Apps is free and the restaurant regards it as an advertisement to further promote its brand.

 

Constrains of using off-peak hours discount

Several apps users said they prone to make a booking when restaurants offer a 50% discount but most of the time they would not be able to enjoy such discounts, which usually happen in afternoon tea time when they are still at work.

Only those who have flexible working hours could enjoy the discount galore at off-peak hours, said Ken Lee, an accountant said. Gigi Wong, a graphic designer, is a frequent user of booking apps during off-peak hours. “My job allows me to have a home-office so I can go out to grab a brunch or afternoon tea,” she said.

 

Hard to capture profit by lower price

Online restaurant reservation apps lure restaurants to apply yield management pricing strategy that allows restaurants to offer deep discount to customers during off peak hours. ‘Price discrimination helps restaurant to lower fixed cost such as salary, electricity and water charge etc. It becomes a channel for restaurant to promote themselves with a lower advertising cost.’ said Raymond Yeung, Senior Lecturer, Department of Economics and Finance at the Hong Kong Shue Yan University.

Moreover, Professor Yeung said plenty of the similar booking apps have been competing in the market already. At this point, locations of the restaurants are of paramount importance. Restaurants located in remote areas might not be able to beef up their business by joining booking apps. “Dinning habit determines where customers dine,” Professor Yeung said. Restaurants in industrial areas are usually quite during weekends and holidays when few people are working there.

‘In form of oligopoly or competitive market, it’s hard to capture profit by marking down the price for reservation apps given that the information of the price is perfect," he said.

《The Young Financial Post 新報人財經》

新報人財經(TYFP)為香港浸會大學新聞系財經專業的實驗平台,由學生自主編採,為社會大眾提供中港相關的金融財經消息。

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