How OpenTable Ensures It Has The Only Seat At The Table

One my favorite things to do is eat! That is no secret for millions of people who agree with me and enjoy the simple act of feeding our faces. My name is Jared Wilson and I am a foodie and I accept that about myself. I often think about what I’m going to eat meals and days in advance and have cravings for certain foods, which can leave my stomach growling and my mouth salivating. I get an adrenaline rush from ‘foodgasms’ and have a blog about my restaurant journeys and experiences. This makes it all the easier to understand why I want to talk about OpenTable. Anyone hungry?

Why Is There An OpenTable?

Offering reservations to about 31,000 upscale restaurants around the world, having 15 million users per month, and with revenue of over $190 million last year, OpenTable has been the best restaurant-reservation app in the marketplace for quite some time now dating back to its inception in 1998. OpenTable allows users to search for restaurants, wherever they may be, and make reservations for the date, time, and size of their party with a click of a button. No more phone calls to the restaurant to see if they’re busy. To make it even more enticing, OpenTable offers the user points for using their system. As a user makes more reservations, they accumulate more points, and these points can then add up to dollars off their future meals. It’s a pretty sweet deal for anyone who loves restaurants.

On the other side of the table, the restaurant receives an electronic reservation management system to replace the old-fashioned paper system and allows the restaurant to manage reports and keep track of guests and tables. Not to mention, the advertising they’re receiving for being on OpenTable. The catch, while this experience is free for the user, the restaurant pays OpenTable a fee for the service and advertising.

So All The Tables Are Taken?

While it’s great to be on top, the new order is staying on top. OpenTable has been the best at what it does and when you’re the best, others have to play by your rules or take their chances without you. Let’s just say that the fees restaurants pay OpenTable, they’re pretty pricey. OpenTable charges $1,295 just for their software, a monthly fee of $199, an additional $99 to be featured in OpenTable’s dining guide, $.25 per reservation booked on the restaurant’s website, $1 per reservation booked through OpenTable or one of its partners, and restaurants pay up to $10 just to give users the points we love to collect.³ When you add all these fees and charges up, some restaurants begin to question if it’s worth it. Welcome competition.

SeatMe is similar to OpenTable, but focuses more on putting the restaurant back in control versus the reservation system. SeatMe’s secret sauce is that they’re easier to use, more powerful, and have no pesky cover fees. SeatMe provides 24/7 access to the manager wherever they may be and a seamless system for users, which includes automatic wait lists; all things OpenTable doesn’t have. What gives SeatMe a good kick in their service is that they already have Yelp dining in. Yelp gives SeatMe great exposure and credibility and is a strong backing system with their 139 million visitors monthly on average. Did I mention they offer all of their services for only $99 a month.

Eveve provides very comparable capabilities and features to restaurants and users. They’re similar to OpenTable in the services they offer, but similar to SeatMe in their pricing model and no cover fees. Eveve believes their strength is in their pricing, which offers savings from 60 - 90% compared to OpenTable. They aren’t wrong to highlight this strength either. Eveve has already gained traction in the market; they average 770 users monthly and already are being used by every 3 out of 10 restaurants.

Dessert Anyone?

The tab is still out on what the future will hold for these restaurant-reservation system companies. OpenTable has a large portion of the market due to its user-base and advertising reach, but with large fees, will restaurants continue to fall in line with their prices or continue to give companies like SeatMe and Eveve greater shares in this industry. I guess it will depend on how well restaurants can fill their seats.

References:
1. http://en.wikipedia.org/wiki/OpenTable
2. http://techcrunch.com/tag/opentable/
3. http://blogs.houstonpress.com/eating/2014/05/as_fees_become_problematic_res.php
4. http://www.opentable.com/start/home
5. https://www.seatme.yelp.com/
6. http://www.eveve.com/