The OpenTable Story - An Online Restaurant Reservation System

The impact of Open Table on Restaurants

Category:

Film & Animation

Tags:

• xtranormal

[mraubuchon]

When I look at other IT systems in my restaurant - my POS system, my phone system - those take up about 0.1% of my annual revenue," says Mark Pastore. His blog explaining why he doesn't use OpenTable at Incanto kicked off an industry wide debate. "OpenTable is going to cost me at least 2% to 3% of revenue." Many restaurants make less than 2% in pretax profits. OpenTable, Pastore says, is eating away at many restaurants' only income. That's quite a feat: Networks are supposed to shave costs out.

[mraubuchon]

You are correct. No one is required. When a monopoly exists there is no other choice but to pay the price. This will soon change and for the betterment of the restaurants that use the service and for the customer. Monopolies only lead to higher prices and the consumer never win, and in the end, no one does.

[mraubuchon]

Note: OpenTable cost per reservation is based on a recent study that showed that the cost of a table for four reserved through the OpenTable website is $10.40. This total includes reservation fees, monthly fees and installation costs. Source: Gerson Lehrman Group restaurant consultant - March 20, 2011

[ramirezbobbi08]

haha! awkward silence at the end...

[MrRusky66]

I work with Reservation Genie and our pricing model is $49 per month with no cover fees from regular customers (we do have concierge referral program that can lead to fees if you want to reward concierges). We give restaurants tools to let them book from any website for free too.

[BSteve88]

A 15-20% increase in business? When you look at the OT listings in your neighborhood, are most (or all) of the other fine dining restaurants also listed? If so, do you believe their business also increased by that %? If their business did not increase, what was unique about your OT ad? Not sure how OT creates more diners…and when everyone the local market is using it, not sure it provides a competitive advantage. It just becomes an electronic reservation system with monopoly pricing.

[Larkinsontheriver]

I am the last one to support OT. I resisted for years, we are an upscale restaurant and we used our own reservation system for years.

We decided to start using Open Table for the marketing benefits. we reduced print ads and re-alocated those funds to Open Table.

We have seen a 15-20% increase in business by investing in OT and other online resources (and assuring that our product is excellent). We offer our online reservations system and OT our OT cost per Cover is $1.39. (guest avg =$45)

[dkochmpls]

Nothing could be more true.

Good Job open Table

[ChristianBurkia]

beside the costs of OT the worst thing is the service/support policy of this company. for more than one year they promised me a time/work/cost saving solution for regulars. nothinh happend. bad, bad experiencs!

[BSteve88]

OpenTable does not create more diners. It just seats them at a restaurant they are already going to, or, at one restaurant instead of another. You as an restaurant owner hope to create a relationship with your guests. OpenTable is incenting your guests (thru points) to come back thru their website to make reservations. The guest may have intended to revisit your restaurant, but once on the OT website, where the guest ends up making a reservation is anyone’s guess.

[billedge06]

As a restaurant owner using OT I can tell you that the cost of the service is well worth it. Using OT is a cost of doing business just like other sales and marketing expenses.

[jtretakoff]

While this video is unwatchable quality, the point it makes is interesting, if misguided. Yes, OT makes a fee. As the previous commenter mentions, the restaurant is *not* being forced to use OT. Further, it's incredible naïve to think that a restaurant does not benefit by using OT: diners like me discover new restaurant options by going to OT, as it offers me a value proposition that cannot be beat of ease and convenience.

You could make this poor argument for any advertising option.