In short, some restaurant owners say, OpenTable is vulnerable to a competitor with a different and perhaps cheaper plan for putting diners in seats.
Over the years, a number of companies have tried to unseat OpenTable, Savvydiner.com and DinnerBrokeramong them, with no obvious success. But a new entrant into the market has generated hope among some restaurateurs that the online reservations Goliath may have met its David.
CityEats launched in the Washington area last month with several high-profile restaurants on board, including Mike Isabella’s Graffiato and Cathal Armstrong’s four-star Restaurant Eve’s Tasting Room, along with dozens of others with less marquee value. They were attracted to CityEats not just for its lower prices and tablet-based technology, but also for its parent company: the Scripps Networks, which owns the Food Network, the Cooking Channel and the Travel Channel.
“That was definitely an important aspect for us, that CityEats is funded well and organized properly,” Armstrong says. “I think they’re a pretty safe bet for competition to OpenTable.”
That’s easier said than done. As OpenTable likes to point out, the company knows how to get people into restaurants, which is the bottom line for any reservation service. By its own count, OpenTable boasts more than 20,000 restaurants worldwide and seats 7 million diners a month, says Ann Shepherd, senior vice president for marketing.
Those steep monthly bills that some restaurants complain about? They’re a sign of success to OpenTable. Among other fees, OpenTable charges restaurants $1 for every seat it fills via reservations made on the company’s Web site (and 25 cents a diner for reservations made through the restaurant’s own site).
“It’s impossible to compare prices without comparing results,” Shepherd says. “With our pay-for-performance model, every $1 we charge per diner translates to $42.50 per person on average in revenue to that restaurant.”
You don’t have to tell Dean Gold, owner and chef of Dino in Cleveland Park, how important OpenTable is to his bottom line. Gold figures that 75 percent of his diners book a reservation through the service. He also appreciates that OpenTable, which launched in 1998, has become more responsive over the years.