Booking engines are buying ads to divert traffic from restaurants they represent to bill them more for bookings

TLDR. Some engines are paying for google ads to appear above restaurants they represent to get the higher “originated from our engine” fee.

Running a profitable restaurant is notoriously difficult. There are so many variables to be on top of — the branding, the refit, the ingredients, the staff, the rent, the business rates, the website, the health and safety inspections and on and on… and that’s before you have to deal with the competition!

The one thing that as a restauranteur you don’t expect to have to worry about is the booking engine. Almost every restaurant needs one: you don’t want to tie up your front-of-house staff responding to emails and calls and you don’t have the time or money to create a system that allocate tables and manages discount codes. Creating a booking engine that just works is hard and the dominant players in the industry know this and charge accordingly.

Market leaders such as OpenTable, Quandoo and Bookatable also play heavily on the network effect of their own websites and their pricing reflects this. There is usually a big difference in between the fee charged for “direct” bookings — those made on the restaurant website / Facebook page usually via API / widget — and “indirect” bookings made on the engine’s own website or a website of their “Network Partners”.

This makes sense. This network effect has a clear value and should bring you customers that hadn’t heard of your restaurant before. Restaurants should pay more for that.

However when I recently googled a few well known London restaurants I noticed something odd in the search results:

Quandoo had paid advertising for common search terms in which the restaurant was already ranking top.

While perfectly legal, I find this incredibly unethical.

Quandoo are presumably charging the restaurants a monthly fee for their booking system in addition to a per cover fee which is greater if the booking originates from quandoo.co.uk. In the style of the dark days of Wall St, somebody at Quandoo must have noticed that the PPC cost of an ad in these searches is substantially less then the difference in fee that Quandoo get when a booking originates on quandoo.co.uk.

For them, this is free money entirely at the restaurant’s expense. It is hard to imagine that somebody doing this google search would have failed to book without the Quandoo ad. Of course, if on the other hand Quandoo were using google ad specialists to target long-tail keyword searches where the restaurant did not already rank top, I would accept that they were providing value to the chain. As it stands I fail to see how this is anything other than a rip-off.