OpenTable makes most of its money from selling its reservation tools to restaurants. The "ERB" is a computer terminal. It comes with software that allows online reservations, helps run front-of-house business in restaurants, like seating arrangements and waitstaff assignments and takes notes like information on frequent customers. OpenTable Connect.
Connect is the lighter version of the company's reservation system, which is purely a web-based system that enables restaurants to accept online reservations. The company says it aims this product at restaurants who normally rely mostly on walk-in customers.
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From restaurants with the Connect system, OpenTable receives a fee for each diner who completes his reservation. There are other extras that restaurants can opt in to, for a fee, to gain greater exposure through OpenTable:.
So how much revenue do these products generate? The company's revenue breaks down roughly in half between per-diner reservation fees and subscriptions.
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There are some other revenue sources, like ads on OpenTable. See chart at right. Revenues increased substantially over both periods, as well. OpenTable also partners with many other sites, including Menupages, Google , and Yelp and places a reservation button next to those sites' listings. See example screenshot below.
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OpenTable's online business model is simple: it matches people looking for a place to eat with restaurants that want customers, and also allows online reservations directly from restaurants' own websites. And what value does it add for restaurants? OpenTable says that it takes the average restaurant just three reservations through its system to make up for the fees it charges restaurants.
The company also says that it fills seats that might otherwise go empty when it lists available reservation times on its site. In addition, restaurants get exposure on its site they might not receive otherwise by only hosting their own websites. But there are potential drawbacks for restaurants, too.
As we reported earlier , some restaurants feel like they get a raw deal: the subscription fees for OpenTable are fixed every month, no matter how many diners the service does or doesn't draw. Some restaurants feel forced to join OpenTable just to be able to compete. And as one restauranteur has pointed out , OpenTable also owns all the customer data saved on its hardware, meaning that if a restaurant cancels its subscription, they no longer have any of that valuable information.
That's a big loss in an industry that relies heavily on knowing patrons' information and dining history.
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There's also more competition coming: a proliferation of other restaurant discount sites and cheaper reservations software everything from Groupon to North American newcomer Eveve which has directly challenged OpenTable's model here , and social networks that are seeking to incorporate similar features into their own sites. Los Angeles. Mexico City Polanco. Mexico City Santa Fe. New York City Palm Too. New York City Tribeca. New York City West Side. San Antonio.
go Tysons Corner. Washington DC. Make a Reservation Today. Relaxing With Bruce. Reserve Now for Atlanta on OpenTable. Thank you for your interest! If you do not receive a confirmation email shortly after submitting, please call us directly so we can be sure to assist you.
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