UPDATED: As Fees Become Problematic, Restaurants Move Away from OpenTable, But Do They Stay Away?

Categories: Food Fight, News

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Is the OpenTable name worth its major cost?
A few more people in the local restaurant industry chimed in with their thoughts on OpenTable after this article was originally published. You can now read their comments on the next page.

Imagine you own a restaurant, and you want to fill seats. You need to get people to make reservations. So you turn to OpenTable, the number one online reservation software.

It's been around since 1998, so it's had plenty of time to work out the kinks. Nearly 27,000 restaurants around the country use the service to make it quick and convenient for guests to make reservations, even when the restaurants is closed. To many, OpenTable seems like the best bet.

But lately, many restaurants have been switching to other, smaller reservation services due to prohibitive fees from OpenTable. Signing up for the service costs $1,295 just for the software, which OpenTable requires restaurants use. Then there's a monthly fee of $199. Add another $99 a month onto that if you want to be featured in OpenTable's dining guide. It's 25 cents for every reservation booked from the restaurant's website, and $1 for every reservation that comes directly from OpenTable or partner sites like Yelp. On top of that, there's a point system wherein diners earn more points if they book through OpenTable's website. It costs the restaurants more, but diners love it.

Back in 2011, our sister paper, City Pages, out of Minneapolis, addressed concerns about OpenTable's point system and fees.

"The most expensive option for restaurants is Open Table's rewards program, which gives diners an incentive to book at off-peak times. The diner who makes the reservation receives 1,000 dining points--good toward $10 worth of food at an Open Table restaurant. But while the program does help restaurants fill empty seats during less-busy hours, Open Table also charges them a steep $7.50 per party member. Unless the diner rings up an especially large bill or becomes a repeat customer, a restaurant can lose money on the deal."

Still, OpenTable had a monopoly on online reservations until the last several years, when competing companies like Eveve arrived on the scene Eveve is a Scottish company that works a lot like OpenTable, only without all the fees.

"OpenTable hasn't been either financially or technologically feasible for many of its Houston clients for some time, but restaurant owners haven't felt there was a viable alternative," says Eveve's CEO and president, Timothy Ryan. "Now that Houston restaurant owners are getting the chance to become familiar with our much more affordable pricing model, our superior technology and the ability we give restaurant owners to regain control of their marketing destiny and customer relationships, we are beginning to see the same type of growth that has allowed us to become the majority supplier of online bookings in the Twin Cities."

This story continues on the next page.


Location Info

Kata Robata Sushi & Grill

3600 Kirby, Houston, TX

Category: Restaurant

Haven - CLOSED

2502 Algerian Way, Houston, TX

Category: Restaurant

Oxheart

1302 Nance St., Houston, TX

Category: Restaurant

Mockingbird Bistro Wine Bar

1985 Welch St., Houston, TX

Category: Restaurant

Soma Sushi

4820 Washington Ave., Houston, TX

Category: Restaurant

Peli Peli

110 Vintage Park Blvd., Houston, TX

Category: Restaurant

Tony Mandola's Gulf Coast Kitchen

1212 Waugh Dr., Houston, TX

Category: Restaurant

Latin Bites

5709 Woodway Drive, Houston, TX

Category: Restaurant

Osteria Mazzantini

2200 Post Oak Blvd., Houston, TX

Category: Restaurant


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32 comments
Harrison
Harrison

I follow the space and my question is why Houston?  Houston is not Eveve’s first market, they already did well in Minneapolis http://www.bizjournals.com/twincities/morning_roundup/2013/07/open-table-has-a-food-fight-on-its-hands.html What is different is that Houston is a much bigger city.  Why don’t Eveve go to SF or NY?  Eveve seems smaller, but now that La Fourchette has been bought by Tripadvisor and Yelp bought another competitor, SeatMe, it looks like OPEN’s days as a cash cow are numbered.  Even Google got in on the act this week, by buying Appetas.

question
question

Why has the journalist approached Chris Cusack and Kevin Naderi?  Apart from running restaurants, they clearly know nothing about this situation and aren’t involved?    It’s like asking a vegan chef what he thinks of Sysco.  Shawn Virene is obviously a PR plant.  There is clearly a story here, and I think it warrants a bit of research.  I am a restaurateur, and have been pretty happy so far with Opentable.  One of my industry friends switched to Eveve, and this has made me give it a second thought.  I would be interested to know what some of the guys who have switched have to say, like Kata Robata, Oxheart or Benjy’s.  I would also like to know if any restaurants switched back, why?  Seems strange to u-turn like that.  Was there any murky business going on?

kelvin104
kelvin104

Power corrupts. Absolute power corrupts absolutely. Monopolies are powerful because they enjoy pricing power, which can become price gouging. So I'm glad to see competition in this segment of market.

anhonestquestion
anhonestquestion

"A lot of people are going back to OpenTable quickly because they're seeing the other companies (like Eveve) flop, and they have not had the support and name of OpenTable," he says.


So this guy has a restaurant that does not use a reservation system. What is he basing this statement on?

Amanduh
Amanduh

A restaurant needs Open Table like a fish needs a bicycle.

TCEdwards
TCEdwards

Eveve looks like it still has a ways to go, but you won't catch me mourning the death of OpenTable.  Just another parasitic, "social" service that dangles its database of users in front of restaurants and reaps advertising profits from desperate restaurants while skimming the cream off the top of the best ones.  Good riddance, and good on restaurants for taking a bit of their individuality back. 

bigdsteve
bigdsteve

Reading the article, and as a restaurant owner in different states, I couldn't imagine why Restaurants have such a misconception about OpenTable.Danny Meyer said it best, great restaurants don't shop around for the cheapest option. POS system, Restaurant Equipment, food, or personnel.You get what you pay for as these companies come into cities like locusts and offer discount junk.Every year it's a new company offering me something for nothing.  And I just don't find that as a recipe for success.


I just have never been into discounts in my restaurants.  I follow the Danny Meyer philosophy; build value and comfort and they will keep coming back over and over again.  I wish I could warn these restaurants because I certainly believed that cutting corners was the way to go early in my career.  If you think that you can use inferior product and that the market doesn't sooner or later respond to that then good luck to you.  One day somebody is going to cut your lunch after you thought that you had it all figured out.  I've seen this happen time and time again.  Once you think that you are on top of the mountain you look over your shoulder and somebody and somebody else has already climbed a higher mountain.


Open table is my only vendor that hasn't raised their prices in over a decade.  My customers want it and I only pay if it works.  I wish that I could get that out of my produce guy.


I've heard the Eveve pitch and found their salesman's logic very flawed once I vetted it. But I do wish him success, any time a restaurant drops off the network that's just another diner that will find me.  On second thought, GO EVEVE!!!!



MadsenV
MadsenV

Your first sentence is an assumption: "Imagine you own a restaurant, and you want to fill seats. You need to get people to make reservations...."

No. You need people to show up, and eat and drink and pay. You don't need them them to make reservations. Some of my favorites do very well with a 'no reservations' policy: Dolce Vita pops to mind.  

And you certainly don't need a paid middleman to make them for you. Maybe restaurants realizing this will bring their costs down.

whateveryousay
whateveryousay topcommenter

It's like when a restaurants starts using coupons to attract diners....they can never break that cycle.


Dfagan
Dfagan

Restaurants thinking that Open Table is a marketing solution is a lot like a frog looking up from the bottom of a well, beholding a patch of blue sky, and thinking it's the whole world.


maggers51
maggers51

So let me get this straight, I go to Clark Cooper and spend $70 a plate and they can't fork over 2 bucks if I make my reservation on Open Table?   Sounds about right.  Clark Cooper has been jacking up prices on diners for years while never really offering anything all that great.  I was wondering why their Open Table widget was so difficult to make a reservation on...turns out it wasn't Open table but Evave.

It's the same old story.  Charles Clark got a little bit richer while the diner got screwed.   Does anyone else think that this is a good thing for Houston diners who don't want to go to 20 websites to see if I can get a reservation somewhere?

K.C. Taffinder
K.C. Taffinder

Haven came back along with Peli Peli, Dantons, Mockingbird Bistro, Osteria Mazzintini and Artisans. This is not new - 85% of all restaurants come back within 6 months.

paval
paval topcommenter

I refuse to reserve a table through a computer system. 

What is the point of eating out? 

For me it is to enjoy the experience, support a local business that prepares good food and provides an atmosphere that lends itself to enjoyment. 

This whole computerization of the dining out experience makes eating out more impersonal and creates more of a chain restaurant experience.

Now we have a computer taking our reservations. Soon we will enter our food and drink choices into an I-Pad and even a little later this will be delivered by a drone or a robot. While in the kitchen a 3-D Printer prints our food. 

Welcome to the Future

ekhilton
ekhilton

As an avid OT user since 2006, I found this article very interesting, thank you.  Though I may rethink my reservation strategy locally out of respect for my hometown businesses as a result of having read this, when traveling across the country and I'm in unfamiliar markets, it's a total Godsend. I have booked dozens upon dozens of restaurants throughout the US this way and I am certain I never would have known about them otherwise. It's my "go-to" on the road and their app is awesome. I trust their reviews because their users are experienced diners as well, not just some idiot who eats at Olive Garden.  I'm actually just shy of the ever-coveted $100 dining check from them; after eight years I'm almost to 10,000 points.  Now I feel kinda guilty about cashing that in - at least locally, that is!! ;)

Giotto
Giotto

Open Table is good for Open Table, and maybe its members, but for restaurants as a marketing platform it's a really raw deal. 


It's a seat-brokerage between restaurants and diners, and has no allegiance to the restaurant's interests; yet it's able to convince restaurants to pony a ridiculous start-up fee, a monthly fee, and then a peice of every reservation on top of that? Can you say 'bend over and grab your ankles'?


I'm glad there is competition finally. Open Table was never a marketing solution at all, and it was an overpriced seat brokerage. And this in a city that doesn't use reservations nearly as much as NYC, SF, CHI or other big dining cities. 

rockets1970
rockets1970

@bigdsteve

“Restaurant Owner” sure you aren’t an Opentable sales rep?  Describing a competitor as a locust?  I didn’t know who Danny Meyer was, but a quick google search showed he is a chef, who is also on the board of directors at Opentable.Funny that you reference him as well…

rockets1970
rockets1970

@bigdsteve

“Restaurant Owner” sure you aren’t an Opentable sales rep?Describing a competitor as a locust.  I didn’t know who Danny Meyer was, but a quick google search showed he is a chef, who is also on the board of directors at Opentable.Funny that you reference him as well…

TechieLady
TechieLady

@bigdsteve  OpenTable has already lost the core of its data. Becuase the most booked restaurants have moved to other suppliers. So which clients are they going to drive to other restaurants if they do not book t

hrough OpenTable anymore?

genevieve
genevieve

@bigdsteve

Not sure what you're referring to when you say restaurants have a "misconception about Open Table". Sounds like the misconception is that they're paying too much. The reason they'd consider a competitor is exactly the point you make: value, the best product at the best price. Sounds like until now they had only two choices--Open Table and old-school reservations. Now, they've got three: Old school, Open Table and Eveve. What's wrong with that? Even Danny Meyer would like it.


TechieLady
TechieLady

@MadsenV  I believe you think in this way becuase, online reservations have been hyperexpensive untill now. But what if you could control your data for fair price? Have you though about the quantity of time that technology is saving diners and restaurants. Plus you have a better service, better time management and the power of your data. 

Dfagan
Dfagan

@whateveryousay

 I was going to mention that too. I mean, why would a restaurant bring someone to their website and then place a button that reads 'Make a Reservation' handing it off to Open Table?

 Makes no sense as the restaurant pays OT for every person in the party....so, it's gotta be that they can't manage both a manual reservation while using the Open Table system. It's like a person who forgets how to ride a bike as an adult after doing just fine as a kid.

DontBeASheep
DontBeASheep

@kunis  Grant Cooper/ Clark Cooper did not get paid for anything they said. Eveve provides a high quality product and know how to do their business well. The fact that they don't price-gauge is a perk, but does not make them cheap. Quality is quality.


If you cannot afford to go out to eat without discounts and points, maybe you need to budget yourself better and dine out when you can afford it, like any reasonable person.

Don't be a stick in the mud; times are changing. People are finding out OT is a genius marketing scam that only helps their investors and employees, leaving restaurants with a false sense of security. 

genevieve
genevieve

@kunis

Sounds more like you're doing a hatchet job on Clark Cooper. I'm not crazy about their stuff either, but that is another tangent entirely, as this is more about Open Table and a new competitor. 

othasspoken
othasspoken

“Come back” so can we assume this is another Opentable sales rep posting?

fingerling
fingerling

@paval  You're right, it does in fact remove the concierge position, which historically has been rather colorful. His discretion is replaced by a computer and a hostess who has a tough time overriding computerized reservations.


mancow66
mancow66

@ekhilton  

I get it but when I go to these high priced restaurants that seem to find a way to cut another corner it just rubs me the wrong way.  I'm an opentable fan and appreciate the service that they offer.  

Estes
Estes

@ekhilton  

Yes the reviewers are very saavy: I just read one about great filet minion.

Honestly, they are no more reliable than YELP, and the crowd-sourced awards are completely meaningless.

mancow66
mancow66

@Dfagan @whateveryousay  


I'm sorry, but your metaphor makes no sense.  Open table charges for their service only if it works right?  Doesn't that just cost a quarter per diner?

I go to a restaurant and pay $10 for a cocktail and now 50 cents is too much for these restaurants?

TechieLady
TechieLady

@DonkeyHotay @whateveryousay @mancow66 @Dfagan  


The main point is that, you can use OT, American Express or whatever, but what should be CRIMINAL is to play with the fears of the people and make them believe that  not joining a network "MAFIA" will make them lose business. Only restaurateurs are responsible for their reservations' trend not software providers. 

DonkeyHotay
DonkeyHotay topcommenter

@whateveryousay @mancow66 @Dfagan  


Fortunately, no one is forcing any restaurant to join or use OpenTable as an advertising / reservation vehicle.


They are free to spend their advertising $$ on such time proven methods as print ads in Wasteword.


This whole whine sounds like the same nonsense about not taking American Express because they charge 0.5 - 1.0% more than Visa / MC.


If your restaurant margins are so thin that a 1% discount to some customers will make or break your finances, it's time to throw in the toque.

whateveryousay
whateveryousay topcommenter

@mancow66 @Dfagan @whateveryousay  The required software is $1295, there is a monthly fee of $199, additional $99 monthly to be featured in the dining guide. There is also the rewards program that they charge $7.50 per person per reservation (the restaurant must pay OT $30 for a reservation for a party of four). 

The cost wasn't my point.  My point was that like coupons OT is a vicious circle for restaurants.  OT is great for the consumer but is tough for the restaurant. If I reserve a table for two through the rewards program it costs the restaurant $15 for the reservation and I also get a $10 coupon bringing that total to $25 for the restaurant.  That is expensive.  Great for me but tough on the restaurant.


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