The online reservation systems market may be the new hottest ticket in town, with the news that American Express is buying into the fiercely competitive field.
On May 15, the company announced publicly that it is acquiring Resy, a reservation booking and management platform. Followers of the reservations game may recall that Resy bought competitor Reserve in November 2018, ramping up its presence in the face of competition from established players such as OpenTable,
According to a release from AmEx and Resy announcing the acquisition, Resy has 4,000 restaurants in 154 cities across the United States, and seats more than 2.6 million diners weekly. Although the amount of the sale was undisclosed by AmEx, Resy is valued at $53 million USD and includes investors such as AirBnB and Union Square Hospitality Group according to Eater (one of Eater’s co-founders is Ben Leventhal — who also co-founded Resy). Leventhal is quoted on the release from AmEx as saying “American Express is a brand that we have admired and sought to partner with from our inception. There are myriad points of synergy between Resy and American Express that we look forward to pursuing together in the name of creating an end-to-end global dining platform that thrills both diners and restaurants alike.” According to the release, after the acquisition, Resy will continue to be led and operated by co-founder CEO Leventhal, along with Resy co-founder and CTO Michael Montero.
Although Resy and American Express were already partners in some areas, Chris Cracchiolo, American Express’s senior vice president for global loyalty and benefits, told The New York Times that the decision to buy the reservation platform made sense. “American Express wants to be more central in our customers’ everyday lives,” Cracchiolo told The New York Times.
Credit cards such as AmEx, Visa Infinite and others have already made moves into the reservations space through their concierge services, especially at the upper tiers. “AmEx is eager to hold onto its card members in a market where it now competes directly with Chase’s Sapphire Reserve and Citi’s Prestige Cards. One way is to bolster its access to the restaurants where its card members want to dine,” writes Ken Sweet in an Associated Press story. As luxury diners continue to chase exclusive meals as avidly as other consumables such as fashion, it behooves a credit card company to offer this whole lifestyle approach to their customers discretionary spending.
As reservations themselves become a commodity through pre-paid ticketing systems in restaurants such as Alinea (which uses Tock, founded by Alinea co-owner Nick Kokonas), the very nature of hard-to-get reservations is shifting. Although one could argue that this system is more democratic (to a certain extent), with the restaurant host as gatekeeper removed from the equation, one could also say that these changes in fact add more levels of exclusivity through having the income level for the right credit card and the upper tiers. Who knows what the process will be to acquire a reservation five or 10 years from now? Until the dust settles, it’s perhaps wise to reserve judgement.