It now seats well over two million diners a month, stands out in the crowded online dining reservations space in Asia as a yield management platform for restaurants rather than just another marketing channel, and feels it is only scratching the tip of its full potential – reasons that give TripAdvisor a bigger appetite for Eatigo.
TripAdvisor, the largest investor in Eatigo, has given a second round of funding to the startup. Eatigo was founded five years ago with a Series A investment by an unnamed big Thai media company. TripAdvisor entered in October 2016 in Eatigo’s Series B, bringing the total raise (Series A & B) to US$15.5 million. Speculation is it added just under US$10 million to bring the total investment to US$25 million to-date.
Bertrand Jelensperger, TripAdvisor Restaurants’ senior vice president, said: “Our continued investment in this company is a sign we are pleased with the progress that Eatigo is making as a business.”
That progress included Eatigo’s expansion last year into Hong Kong, the Philippines, Malaysia and India (through the acquisition of Ressy), from operating only in Singapore, where the company was incorporated, and Thailand, its operational headquarters. The four new markets represent over 50 per cent of Eatigo’s revenue and reservations, according to Eatigo’s co-founder and CEO, Michael Cluzel.
Eatigo is hungry to expand further in South-east Asia and the wider Asian region, extend its product offering, and is doing a full rebuild of all its platforms to offer “much better speed/loading times, search functionality, fully scalable and modular built that will allow us to add countries and services seamlessly for our smoothest user experience ever”, said Cluzel.
He won’t say which new markets Eatigo would go into. It aims to grow organically but is also open to “seize consolidation opportunities as and when they present themselves”.
When asked the number of seats a month it aimed to produce with further expansion, from the two million a month Eatigo was said to be doing currently, Cluzel said: “We can’t speculate on forward-booking numbers but historically, we have been doing three to four times (more) year-on-year every year since inception.”
While Singapore has Chope, Hong Kong OpenRice and China Dianping – household names in the respective local markets – Eatigo differs from those in that it offers time-based discounts of up to 50 per cent with no coupons required. Dining at an off-peak hour such as 21.30 may yield a 50 per cent off, compared with 30 per cent when dining at 18.00. A diner picks a restaurant, chooses the date, number of people, time and the discount offered by the merchant, and receives confirmation via sms and email.
Cluzel believes its model is what makes Eatigo competitive in the Asian marketplace and that the company is “still very much at the beginning of our journey, considering how inefficient merchants still are on capacity utilisation”.
Said Cluzel: “Hotels generally understand and appreciate our business model and have the highest satisfaction with the results. Eatigo is designed to help successful, popular merchants monetise their existing popularity in the most efficient way; we are not a marketing platform to help struggling merchants.
“Eatigo is a yield management platform, not a marketing platform. Yielding has been around since the 1970s, pioneered by American Airlines, and its sustainability has been amply demonstrated across industries such as airlines, hotels and car rentals.”
With Eatigo’s expansion, and TripAdvisor’s continued investment, chances of restaurateurs getting incremental business from travellers, aside from the bulk of locals, are also greater, players interviewed said. Travellers using TripAdvisor Restaurants or TheFork (which TripAdvisor acquired in 2014) could take advantage of the off-peak discounts in advance of their trips to the countries that Eatigo operates in. Indeed, Cluzel said Eatigo is seeing the percentage of cross-country bookings growing strongly, especially from markets like Hong Kong and Singapore into other markets.
“With TripAdvisor’s continued backing, this could mean more visibility on the international booking platform,” said Byron Chong, general manager of Orchard Hotel Singapore whose Orchard Cafe buffet is one of the most-reserved on the Eatigo platform. “Restaurant owners and diners will stand to benefit, especially since diners are increasingly turning to online channels to make bookings.”
Hotels and restaurant operators contacted in Singapore, one of Eatigo’s best markets, attest that Eatigo indeed delivers the numbers and has great potential, although it needs to raise more awareness and find ways to be more relevant to higher-end restaurants.
One Farrer Hotel & Spa’s F&B director, Dennis Ng, said the buffet at its Escape restaurant had seen more than 7,000 covers from Eatigo since the first half of the year.
“Eatigo is the only platform thus far that allows the merchant to have full control over the (time) slots and discounts given. It is particularly useful not only to fill the venue but at what time to fill it up,” said Ng.
It also enables restaurants to yield depending on what it wants to achieve, said Ng. Using a favourite Thai saying “same-same but different”, he said 50 per cent off and One-For-One may be the same but they are two discounts serving different purposes, the latter typically meant to encourage another a diner bring another diner, while the former might be trying to make the best of a perishable table.
Currently, however, Eatigo is commonly viewed as more suited for quick service and casual concepts than higher-end restaurants.
“I think some of our casual concepts can benefit off this but once you move up the price point then it becomes less attractive, because of branding perceptions and the discounting required,” said Loh Lik Peng, director of Unlisted Collection comprising hotels and restaurants in Singapore, Shanghai and London.
Echoed Shin Hui Tan, executive director of Park Hotel Group, which also operates free-standing restaurants: “We’re selective about restaurants that go on its platform depending on their positioning and strategy. So far, we’ve seen potential in the platform but I think awareness needs to be higher. They need to acquire and grow their user base for them to be more effective as a channel for off-peak dining.”
The il Lido Group of Restaurants reflects same thinking, using Eatigo only for its more casual concept, Sons.
Said Alicia Woon, the group’s assistant sales and marketing manager: “Eatigo does work well in terms of promotion mechanics, and the staggered discounts according to the time do push traffic at lull periods. However, brandwise, it would be best if Eatigo improves its public and industry perception. Perhaps they can achieve this by having higher-tiered F&B establishments in the list of offerings.
“Also, currently we are not sure if the customers that come through Eatigo are loyal to the restaurant, or to the discount. Would also be good to know the percentage of repeat reservations. We could also benefit from an understanding of the best-performing restaurants in terms of average discount, incremental revenue and total covers, and what they are offering so that we can also tweak our strategy better. For example, currently at Sons, our average discount is 44.8 per cent – how do we place in terms of other restaurants on Eatigo?”
Eatigo may already be looking into some of these points, with Cluzel saying the company “will be adding product offerings outside our current scope of time-based discounted reservations”. He declined to reveal more, saying the new offerings “will expand our ‘dine out and save’ positioning”.
One Farrer’s Ng said he was seeing some effort on Eatigo to improve its business strategy.
“Recently, they are shifting towards a pre-paid model, an overseas trend which has yet to reach Singapore. Merchants have to come up with good deals to bait consumers to pre-pay. The positive aspect is it reduces no-shows,” he said.
He also sees Eatigo focusing a little more on B2B than just B2C, for example offering to do marketing and advertising for restaurants.
A TripAdvisor leverage no doubt.