UPDATED: As Fees Become Problematic, Restaurants Move Away from OpenTable, But Do They Stay Away?
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.
Eveve's interface isn't quite as...pretty...as OpenTable.
Back in March, Eveve announced that it had taken over the reservation services for some of Houston's top restaurants, including Haven, Kata Robata, Oxheart, Mockingbird Bistro, Soma Sushi, Osteria Mazzantini, Benjy's (Washington and Rice Village), Peli Peli, Tony Mandola's and Latin Bites. Earlier this week, Clark Cooper Concepts announced that its restaurants would be switching to Eveve as well.
While researching this article, though, we noticed that Haven has already gone back to OpenTable, though. When we reached out to the restaurant to learn why, a representative said he wasn't ready to comment at this point.
Shawn Virene of Brasserie 19, a Clark Cooper Concepts restaurant, notes that though the restaurant has only been using Eveve for about a week, so far, he's pleased.
"This is a great value, but what is important is that it delivers on value and bookings," Virene says of Eveve. "We are pleased with what we are seeing and hearing from our customers. As for volume, after switching over, we just had one of our best weeks ever!"
Virene says Clark Cooper's switch from OpenTable to Eveve was less about money and more about the benefits Eveve offers regarding flexibility and customer service. For instance, if Brasserie 19 is booked on a given night, Eveve will recommend another Clark Cooper Concepts restaurant, rather than directing the potential diner to a competitor's business, as OpenTable occasionally does.
We asked restaurateurs about to open new places if they were planning on choosing either OpenTable or Eveve as reservation services. Chris Cusack of Treadsack, which will be opening Foreign Correspondents and Hunky Dory later this year, explains that he was initially approached by OpenTable when he opened his restaurant DownHouse several years ago.
"The first point of contact between the restaurant and a potential guest is very important," Cusack says. "Why would you hand that over to an outside company? It's also an added and not totally necessary expense. "
He added that he doesn't plan on using a reservation service for either of the new restaurants, preferring to keep that process in-house.
"If the day comes where we need a new approach to reservations, we'll find an in-house solution to make the experience of getting a reservation at any of our restaurants easier, faster, and more pleasant for our guests," Cusack says.
Kevin Naderi of Roost who will be opening Lilli & Ella in May says he's not yet planning on using a reservation service because Roost is too small. He'll re-evaluate once Lillo & Ella is up and running. For now, his old-fashioned system of calling the restaurant to secure a table works just fine. There's no middle man to pay off.
Naderi was cautionary about restaurants abandoning the OpenTable ship for the seemingly more reasonably Eveve, though.
"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.
It should be noted, though, that Eveve was founded in 1997, a year before OpenTable, and it's clearly still around. That it only charges $200 a month--no matter how many people make reservations--is another reason why Eveve will probably continue. It doesn't yet have the brand recognition and advertising power of OpenTable, but it's still fairly new to the United States, and Houston is only the second market (after Minneapolis) to experience the company's services.
Whether you're using OpenTable or Eveve, though, one thing is certain: It's just as hard as ever to get a table at Oxheart.
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