For the diners who use OpenTable, the online reservation service is a snap: Log in to the Web site, find the restaurant you want and, with any luck, grab a table for the hour you desire. It costs nothing but the time it takes to book a reservation.

But to the restaurant owners who benefit from all those diners using OpenTable, the service is often viewed as the 800-pound gorilla they can’t live without. The company can steer thousands of eaters to a restaurant every month, while draining thousands of dollars of revenue at the same time. It helps restaurateurs manage tables on their dining room floors but clutters their host stands with clunky terminals. It provides a forum for diners to post feedback and reviews but doesn’t allow restaurateurs the chance to reply to the more pointed comments.

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, 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.

“Customer service is far better,” Gold says. “It now seems to be manned almost all the time. You used to call up and they’d call you back, and sometimes it would take a long time to call you back.”

Despite his positive relationship with OpenTable, Gold is giving CityEats a shot. CityEats made the decision easy for Gold: The company offered him a free trial period through April 2012. Once Dino is added to the system, perhaps this month, Gold will pay no monthly software charges until April, he says. If the new company proves it can fill seats, it could save Gold hundreds of dollars a month.

Gold says his monthly CityEats fee will be capped at $750 once his trial period is over — a fraction of the $2,000-plus a month he has paid OpenTable during his busiest periods.

The question, of course, is: Can City­Eats or anyone else break the spell that OpenTable has on diners and their online reservation habits? The publicly traded OpenTable is the recognized industry leader. It has 568 employees worldwide and generated $99 million last year in total revenue, up more than 44 percent from 2009. The company has both customer volume and name recognition on its side. As Perry Smith, co-owner of the small Matchbox chain, notes, “OpenTable is synonymous with restaurant reservations.” That public perception can’t be bought with all the start-up capital on Wall Street.

CityEats is just the latest to take on OpenTable. Urbanspoon, Reservation Genie, Savored and Livebookings have also tried to muscle into the online reservations market , which is still young and mostly untapped. By OpenTable’s own figures, the online behemoth books only about 9 percent of the estimated 700 million reservations made in North American annually, which leaves a lot of room at the table.

Of all the possible contenders for OpenTable’s crown, CityEats is pushing the hardest in the Washington market. The city is essentially the New York-based company’s laboratory, where executives have introduced the reservation service and where they will work out the kinks before rolling out CityEats across the nation, about one city every two or three months. The company declines to say how much money it is spending on the D.C. launch or its national rollout.

“If you look at New York, it’s such a large market — so much volume and so many different restaurants,” says Sameer Deen, president of CityEats, which employs 20 people. “We thought that D.C. was the right-sized market, a growing food scene and an audience that’s also sort of prone to Internet usage.”

In its first weeks, CityEats has surpassed most of its competitors in attracting restaurants; the company has signed on about 80. The second closest is the New York-based Savored, a sort of hybrid business that combines discount couponing with a reservation service; it has has 60 restaurants in the metro area. Urbanspoon’s Rezbook has nine, while the London-based Livebookings claims three, including the highly regarded Inn at Little Washington. The Austin-based Reservation Genie has no local restaurants (although Ivan Collins, founder and director of business development , says the company will target Washington in January).

Accumulating restaurants is important for these upstarts, all of which need “inventory,” an industry term for the number of tables that a restaurant makes available to a given online reservation system. The more inventory a reservation service has, the more tables it can make available to the diners searching for them.

Only five of the 80 restaurants that have signed up for CityEats have given the new company all available tables. Most, like Equinox in downtown Washington, are splitting their inventory between OpenTable and CityEats. The reason for this caution is obvious. Diners just aren’t familiar with CityEats yet. “Seventy-five percent of the people walking down the street don’t know what CityEats is,” says Randy Cole, dining room manager at Equinox.

One of the few to place his trust completely with CityEats is Isabella, the former Zaytinya chef and two-time contestant on Bravo’s “Top Chef.” Isabella has moved all of his available tables to the new service, about 70 percent of the 140 seats at Graffiato in Chinatown. (The rest are reserved for walk-ins.) Isabella is banking on the high probability that his celebrity-chef status will drive interest in his debut restaurant, regardless of the reservation system. He figures if diners can’t find Graffiato on OpenTable, they’ll seek out the restaurant’s Web site, where they will be able to book a reservation through an embedded CityEats widget.

Isabella’s attraction to CityEats is mostly financial, like many of the restaurateurs who are test-driving the service. Sure, they might have other issues with OpenTable — like the clunky terminals or the inability to respond to critical reviews on the site — but they’re all looking to save cash. Aside from the per-diner reservation fees, OpenTable charges restaurants a monthly service fee (typically about $200) as well as licensing fees for any personal computers that access its software system.

The fees add up quickly, as the partners at Graffiato can attest. James Horn, Isabella’s general manager and business partner, shared copies of Graffiato’s OpenTable bill for September, which totaled more than $3,600 in various fees. Horn says other months have topped $4,000.

“It’ll probably be around 40 percent cheaper to go through CityEats,” Isabella says, “which is a lot of money.”

All of OpenTable’s competitors believe they have a fairer pricing structure, if not a better system for taking reservations. CityEats plans to charge 75 cents a head when diners book reservations through the company’s Web site and nothing for those who use a restaurant’s own site. CityEats has also put caps in place for its “launch partner” restaurants, Deen says, ranging from $500 to $1,500 a month, depending on the restaurant’s size and volume. Likewise, the monthly service fee will vary from $175 to $250. Restaurants that join later could face slightly higher rates.

Urbanspoon also claims lower rates than OpenTable’s, even though the company’s $2 per head fee would seem to double the price for each diner seated through the Rezbook site. The difference, notes Conrad Saam, director of marketing for Urbanspoon, is that the $2 per charge applies at all times, even those off-peak periods for which OpenTable charges $7.50 a diner when a restaurant opts into a “1,000-point program” that works to book seats during slow times. Urbanspoon also charges nothing for reservations made through a restaurant’s Web site or Facebook page. Livebookings’ standard service, which focuses almost exclusively on booking reservations through a restaurant’s Web site, charges a flat fee of $119 a month.

Reservation Genie charges a flat fee of $49 a month, except in certain cities like New York, where the company has established a Concierge Association Partnership; with this arrangement, concierges book restaurant reservations and split a $2 per diner fee with Reservation Genie. Savored is the oddball in the pricing game: It shifts the costs mostly to the diner, who pays $10 a reservation, in return for a 30 percent discount on the entire meal. Savored also partners with OpenTable to help drive traffic to its discount deals, even though they are separate companies.

Of course, each of OpenTable’s competitors — or quasi-competitors such as Savored — also believes it’s built a better system. Savored promotes its discounted meals. CityEats touts its iPad-based system and texting options, which executives believe will help restaurants better manage their dining rooms and waiting lists. Urbanspoon notes that 1 million readers a day visit its site for dining news and reviews (and, presumably, reservations). Livebookings emphasizes that its model keeps potential diners on a restaurant’s Web site instead of pushing them to OpenTable’s or CityEats’s.

“As Google continues to give restaurants more visibility [in the search-engine results], restaurant traffic will begin to increase and they can act as an e-commerce Web site,” says Jennifer Raezer, director of U.S. marketing for Livebookings.

OpenTable doesn’t have much to say about those who would dethrone the reservations king. “We have always had competitors,” says Shepherd, OpenTable’s senior vice president for marketing. “It’s something we’ve always watched closely.”

The competition does, though, seem to keep OpenTable on its toes; Shepherd notes that the company is developing its own iPad-ready technology, even though OpenTable believes its current hardware- and software-based systems are not as vulnerable to Internet connectivity and latency problems. OpenTable is also aware that competitors are working to undercut its prices, which Shepherd defends with a simple sentence: The company has never raised fees in its 13-year history.

You would think such a consistent track record on pricing would endear restaurant owners to OpenTable, not alienate them. But there’s a perception among some chefs and restaurateurs, fair or not, that can be neatly summarized by Restaurant Eve’s Armstrong, who believes the reservation company (whose name he refuses to speak in interviews) “just makes a lot of money off the industry.”

What restaurants pay to fill the tables
Open Table

Monthly fee: $200

Fee per diner: $1

Charge $0.25 for bookings made on restaurant’s site. Charge $7.50 per diner for off-peak reservations made through the 1,000-point program.


Monthly fee:
$175 to 250

Fee per diner: $0.75

About 80 area restaurants have signed on. Backed by Food Network. Does not charge for diners who book on restaurant’s site.

Urbanspoon’s Rezbook

Monthly fee: Transitioning away from a $200 a month fee

Fee per diner: $2

Nine area restaurants use it. Does not charge for diners who book on restaurant’s site or Facebook page.

Reservation Genie

Monthly fee: $49

Fee per diner: $2

No local restaurants use this service. Fee per diner is $2 in cities that offer the hotel concierge association partnership. Does not charge for diners who book on restaurant’s site or Facebook page.


Monthly fee:
$0 to $139

Fee per diner: $1

Three local restaurants use this service. Restaurants are charged the $1 fee only when reservations are made through one of LiveBooking’s partner sites, such as American Express or TimeOut online.