Groupon launches restaurant reservations in challenge to OpenTable

Groupon Inc., the biggest daily deal website, is adding an online restaurant-booking service offering discounted meals as the company seeks to bolster revenue amid waning demand for its Web-based coupons.

The service, called Groupon Reserve, will let customers use Savored.com’s reservations engine to find tables, Chicago-based Groupon said today in a statement. It’s starting in 10 cities including New York, Los Angeles, San Francisco and Washington and will expand in the U.S. and overseas by the end of 2013.

Groupon, which started out promoting discounts via e-mail alerts, is challenging existing reservation services by companies such as OpenTable Inc. as consumers are buying fewer daily deals. Unlike other Groupon discounts, the restaurant platform will give users a discount off their bill without requiring pre-payment or vouchers.

“As Groupon has evolved, we’ve seen growing demand from our customers for upscale offers and exclusive experiences,” co-Chief Executive Officer Eric Lefkofsky said in the statement. “Reserve gives the most prestigious brands anew way to reach our large and desirable audience.”

Groupon Reserve will also add premium deals for beauty, travel and entertainment brands as well as bookings for spas, salons and hotels.

The company makes money by offering consumers discounts — known as Groupons — from businesses such as restaurants and nail salons. It then shares the revenue with the businesses.

Shares of Groupon rose as much as 1.8 percent to $8.70 in early trading. The stock had advanced 76 percent this year before today, compared with a 13 percent gain for the Standard & Poor’s 500 Index.

–Editors: Lisa Rapaport, Niamh Ring

To contact the reporter on this story: Lisa Rapaport in New York at [email protected]

To contact the editor responsible for this story: Tom Giles at [email protected]