Recently, Mark Pastore, owner of Incanto in San Francisco asked on the restaurant's blog a question that many in the restaurant industry have considered: "Is OpenTable Worth It?." In the post, he questioned the return on investment a business derives from making tables available on the online reservations site, which handles bookings for more than 15,000 restaurants in the U.S.
For its most popular service, which includes installation of a computerized booking system, customer preference database, and monthly maintenance and support, OpenTable charges restaurants a one-time set-up fee of about $600, a monthly fee of about $200, and a per-reservation fee of $1.
Pastore, who does not use OT for Incanto, surveyed a dozen of his fellow restaurateurs, and found that most of them believed that OT "took home a disproportionate chuck of the restaurants' revenues each month—and was expensive to keep." Still, they retained the service because they feared that customers would revolt and stop coming to their establishments.
Pastore then urged diners to "consider picking up that 19th-century device, the telephone," next time they wanted to make a reservation. "I know I speak for many restaurateurs when I say that we'd love to hear your voice." OpenTable was unable to comment by presstime, but Dan Simons, managing partner of Washington, D.C. restaurant Founding Farmers defends the service, saying that it is well worth the money—particularly if a restaurant utilizes every feature offered by OT's software, not merely the reservation function.
It's hard for me to believe that OT's fees are making a huge dent in the bottom lines of many successful restaurants: Tables at most of the establishments in Mario Batali and Joe Bastianich's multimillion-dollar empire (which includes Del Posto and Otto), for example, are on OT. And as Simons contends, OT not only makes the reservations system much easier, it also provides a database to keep track of diners' preferences, always essential in providing good customer service.
But for small, neighborhood restaurants, or even more successful up-and-coming establishments whose profit margins may not be as large, every expense counts. In an industry where failure rates are so high, a site such as OT may be more expensive than it's worth. With its current domination over the online reservations biz, however, the little guys may not have a choice.
Do you have a restaurant that uses OpenTable? If so, what has been your experience?
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