Almost 40 years ago, American Airlines launched a revenue management revolution with their yield management technology. At the time this new direction was unheard of and was based on the fact that their inventory (seats) were perishable and all customers were not created equal. Their technology was designed to maximise revenues, with a data driven inventory and variable pricing strategy. This revolutionised the airline industry.
So whilst yield management isn’t a new concept, it hasn’t been applied to another obvious industry – restaurants; until now… meet BigDish a South East Asian tech startup that identified this gap in the market.
BigDish was launched in Manila in 2016, grew rapidly becoming the Philippines number one restaurant startup and the first in SE Asia to apply yield management for the restaurant industry and rapidly expanded to Jakarta and Hong Kong.
For BigDish Yield management is a pricing strategy that charges different prices at different times for the same table and can help restaurants generate new customers at off peak times, maximising efficiency and optimising revenue.
BigDish treats each restaurant seat as a perishable good, just like an empty airline seat, with almost all restaurants having periods of inactivity during the day, which means lose nothing by discounting, but most importantly don’t cannibalise their walk in clientele.
Restaurants who have partnered with BigDish offer a discount on all bookings, but are able to offer different levels of discounts at different times, with discounts ranging from 10 per cent to 50 per cent, depending on the time a customer makes a reservations and the number of people in the booking, what this means is that BigDish users get a discount on all bookings, even at peak times, but if they are savvy and book non peak hours, their savings are huge.
With strong prospects in Asia, BigDish have recently IPO’d on the London Stock Exchange main market under the ticker #Dish and using some of the proceeds to expand to the UK,
by acquiring the UK timed discounts startup Tablepouncer, who had successfully become the number one restaurant discount app in the South of England.
Entering the UK is an interesting hedge, given that it was recently reported by KPMG that UK growth will slow to 1.3% amid Brexit uncertainty the effects of which clearly visible in the restaurant industry with repeated profit warnings and it was recently reported that UK restaurant chains’ profits plummet 64% in one year as sector’s problems mount whilst the outlook looks bleak, this could be the perfect storm for BigDish to leverage the huge need by restaurants to quickly get bums back on seats in a profitable way. Whilst in Asia the economic forecast is much better with the IMF predicting GDP growth of 5.6% for the next two years, there is an emerging, young middle class and restaurants are facing a different complexity too many people trying to dine at the same time, another problem that BigDish’s technology solves.
BigDish has also made a very intriguing second acquisition of LooLoo.com which is the Philippines number one discovery site, in layman’s terms it is “the” TripAdvisor of the Philippines, with huge reach.
Founded in 2012, LooLoo is one of the Philippines’ top online sites and number one in the restaurant and travel discovery space. It provides information, recommendations , nd reviews on restaurants, hotels and travel in the country. The platform boasts over 28,000 restaurants recorded, a monthly average of up to 500,000 unique visits, approximately 200,000 app installs and over 320,000 reviews… now it doesn’t take a genius to work out that, rather than go the typical route of paying for advertising, acquiring the leading platform in your hero market, with a long established, highly contextual and super engaged user group, is a shrewd piece of business and one that only serves to be a very cheap acquisition tool that perfectly compliments BigDish. Tripadvisor have invested in the number two restaurant discount platform in SE Asia – Eatigo, so one can only imagine that they are kicking themselves that http://looloo.com was acquired by BigDish the number one platform.
Time will tell who is the winner with Yield Management for the restaurant industry, but one thing is for sure at the small market cap of around £11m, BigDish must be an attractive acquisition target for not only TripAdvisor, but also their rivals such as Booking.com, AirBnB, C-Trip and Expedia, all of whom have made it clear they are turning their attention to additional verticals and ancillary revenues.
Let’s just say that if BigDish launch in Ireland, I will be a big user, and for those of you foodies lucky enough to be based in the UK, Philippines, Hong Kong or Malaysia the links are below to download the app for IOS and Android.