UPDATED: As Fees Become Problematic, Restaurants Move Away from OpenTable, But Do They Stay Away?
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.
Is the OpenTable name worth its major cost?
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.
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