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Incanto complains about OpenTable [moved from San Francisco board]

j
johnq Oct 18, 2010 10:37 PM

In today's Chronicle (at least in the Chronicle food blog on the web; I have no idea when or if it will appear in the print version): "Is OpenTable worth it?", by Chris Cosentino and Mark Pastore of Incanto: http://insidescoopsf.sfgate.com/incan...

They don't think so, at least from the perspective of restaurants, for two reasons: (1) OpenTable charges restaurants an amount that approximately equals the restaurant's profit margin for the average meal, thereby wiping out the profit, and (2) OpenTable has taken control of the customer relationship away from the restaurants.

I wasn't previously aware of the OpenTable business model, and found that interesting, but the rest of the lengthy article rubbed me the wrong way. OpenTable is by no means perfect, but it's made life much easier for anyone interested in trying a variety of restaurants.

Their reasons for disliking OpenTable make little or no sense to me. I suspect a hidden agenda here: restaurants don't like competition. That's understandable, since businesses never like competition. OpenTable facilitates competition among restaurants by presenting numerous options to the customer. That's good for customers, but not so good for individual restaurants, since it makes it much easier for customers to try new places.

The article implied that customers should avoid OpenTable because OpenTable is somehow taking advantage of hard-working restaurateurs. That strikes me as self-serving and wrong, but I'm curious what other people think about it.

  1. Morton the Mousse Oct 19, 2010 12:00 AM

    I had a very different reaction to the article...

    Pastore is simply pointing out that Open Table is able to extract extremely high rents from restaurants because they have a functional monopoly over on-line reservations. He questions whether the value created by Open Table is greater than the value they extract from restaurants and from customers (as higher costs will inevitably translate to higher prices or a lower quality experience).

    Open Table is particularly well positioned as they are exploiting misaligned incentives: Open Table's customers don't pay for the service directly, and therefore don'y have to decide on a trade-off between cost and convenience. If I had to decide between paying $10 extra for dinner or spending 5 minutes on the phone calling restaurants and checking availability, I would call the restaurants without thinking twice. But Open Table has set things up so that I get "paid" $1 for using their service, and I don't notice that this is reflected in a higher tab at the end of the evening. It's an extremely clever business model, but I agree with Pastore that it ultimately may harm both restaurants and customers.

    I also disagree with your statement that "all businesses hate competition." For example, any restaurant located in the Mission is extremeley grateful for the high concentration of competitors in the Mission as they help make the Mission a dining destination, as well as a desirable place to live.

    My takeaway from the article? I'm no longer using OpenTable. I'd rather pick-up the telephone and support healthy margins for the restaurants I love.

    6 Replies
    1. re: Morton the Mousse
      p
      Papuli Oct 19, 2010 02:34 PM

      OpenTable, once in contract with a restaurant, collects a fee for all reservations made, whether via their service or over the phone. It might be a smaller amount - I don't recall - but it's still there.

      1. re: Papuli
        goodhealthgourmet Oct 22, 2010 07:45 PM

        i'd like to know how that's even remotely legal.

        1. re: goodhealthgourmet
          Robert Lauriston Oct 22, 2010 08:47 PM

          OpenTable can charge what they like for their service. Nobody's obliged to buy it.

          There is no additional fee for reservations taken by phone.

          1. re: Robert Lauriston
            goodhealthgourmet Oct 22, 2010 09:19 PM

            right - i was questioning Papuli's statement because i read it to mean that somehow OT collects a fee for each individual phone reservation, which has nothing to do with the service they provide.

            1. re: goodhealthgourmet
              Robert Lauriston Oct 23, 2010 10:32 AM

              Well, it does have to do with OT's service, assuming you use their software for all your reservations.

              1. re: Robert Lauriston
                goodhealthgourmet Oct 23, 2010 02:43 PM

                a-ha! i didn't think of that. love getting insight from a proprietor :) thanks!

    2. n
      nocharge Oct 19, 2010 12:59 AM

      This is my take on it: I'm sure restaurants have been complaining about what vendors charge them since the beginning of time. And that would be one way to view the article -- as merely a public response to people who ask them why they are not using a widely popular service.

      However, if OpenTable is indeed using a near monopoly status and a lack of viable alternatives to charge exorbitant fees, there is a perfectly good reason to complain. To me, the issue is not that technology has had an impact on restaurants -- they need to deal with that just like any other type of business -- but a question of whether there is monopolistic pricing involved. Think Microsoft using its near monopoly status over the years to greatly enrich Bill Gates and Steve Ballmer at the expense of consumers. (And eventually getting convicted for it.) I use OpenTable a lot and like the service very much. However, in so far they are able to use their dominant market share to jack up prices, both restaurateurs and patrons should have a reason to be concerned. I have no independent knowledge as to whether that is actually the case, but that would be the message of the article that would make sense to me.

      14 Replies
      1. re: nocharge
        susancinsf Oct 19, 2010 06:21 AM

        well, yes, but Incanto isn't on OT; doesn't use it and never has. Do they have lower prices than comparable restaurants that do use OT? (I don't think so) For that matter, did they hesitate at all to be one of the first restaurants in San Francisco to openly pass the cost of health insurance onto their customers? (No) Perhaps what REALLY bugs them about OT is that the terms of the OT contract forbid adding a seperate 'OT charge' like their 'health insurance charge' (or whatever they call the seperate percentage they add to the final bill).

        It is a cost of doing business, but it isn't one they pay (and they seem to be doing just fine). I imagine they are seeing business drop off a bit, and worry that not being on OT is a factor in a resultant reduced bottom line (or just simply resent having to pay anything for a service like OT); however, I think it is more likely that if business is off that the economy is the culprit, but perhaps it is more satisfying to blame a service that one doesn't even use than to look at the harsh reality that these are tough times for everyone?

        I will admit that I sometimes feel a bit guilty about using OT for my favorite places, simply because I am not sure how the OT business model really works. That said, I would not rely on Cosentino or Pastore as a source on non-biased information on that topic. The article rubbed me the wrong way too, partly because I hate the type of writing that relies on "all my friends say it is true so it must be so" to make a point. If Incanto was a previous OT user and really knew more about the system as an actual user themselves, I'd be more inclined to listen.

        But then, the last time I used Incanto's home grown electronic reservation system, I discovered that the restaurant's not necessarily all positive notes about my prior dining history (including a reference to Chowhound posts) were visible to me when I went in to make a reservation. It was unsettling, to say the least. Perhaps they realize that there are (or at least were) some major bugs in their own system and could probably could benefit from a professional service. Before you complain about the big guys' having a monopoly and charging too much, it is probably a good idea to be sure that your alternative works well enough not to turn off a potential customer.

        By the way, lately I've been noticing that several restaurants where I've made a reservation using OT, don't give the OT points (and tell you they won't up front; when you make the reservation you see a message that says, 'no points available for this reservation'). Canteen, a very small place, was one. Perhaps OT has a tiered system, where it costs the restaurant more for the service if you give points? I don't see any mention of that in the article, and thus, if nothing else, the article is incomplete, IMO.

        In the current economy, and given that I now live more or less in the country, I don't dine out as often as I used to, and the points on OT aren't a big factor in where I choose to dine. However, I find OT to be an extremely convenient way to handle reservations, particularly when I travel, and I will certainly not change my plans to use it.

        and the comparison to Microsoft? Come on, that is way over the top.

        1. re: susancinsf
          Robert Lauriston Oct 19, 2010 10:29 AM

          One of our customers complained that we didn't give them any points. This was news to us. We just have the standard deal and nobody from OT told us about any alternative deals.

          Restaurants' prices (any business's prices) are determined by the market, not their costs. Incanto is still in business, some of its former competitors are not, and that might have something to do with Mark being better at controlling his costs. E.g. they didn't serve bread (which is downright weird for an Italian restaurant) until he figured out a way to make it economically in house.

          1. re: Robert Lauriston
            susancinsf Oct 19, 2010 03:34 PM

            out of curiosity I just checked my profile. I did get points at Locanda da Eva when I dined there. The two recent reservations where I did not get the points were at Canteen and at a place I ate on a recent work trip to Dallas.

          2. re: susancinsf
            JasmineG Oct 19, 2010 11:16 AM

            Susan, I think you hit the nail on the head. I think it's pretty ballsy of Incanto to talk about all of the OT fees when a) they don't use the service, and b) they have no problems passing on health care fees to their customers. Though the fact that they feel compelled to complain about it seems to show that they are losing business by not being on OT.

            I find Open Table a great and very easy to use service, and one of the reasons that I'm sure that Incanto does lose out on business from not being on it is the convenience of it, and the ability to compare. I use it to look to see what places are in a particular area that have openings, and to decide between them -- I also often look to see what places in the area don't have openings at the time I want, because then I can (and sometimes do) call them directly to see if they have anything that's not on Open Table. There are others of my favorite restaurants that aren't on OT, and I call them directly for reservations if I want to specifically go there, but if I'm planning a casual night out with friends, OT is the first place I check. It's not about the points, either, it's about the ease of it -- I can make the reservation any time of day or night, as opposed to waiting for the restaurant to open, or trying to call them at a time when it's not busy, I don't have to worry about shouting over the noise of the restaurant for them to hear me, or them getting the time or the number of people wrong, or them spelling my name wrong (and then insisting to me that they don't have a reservation for me when I arrive). I understand that it's a cost to the restaurant, but all of that convenience is worth it to a lot of their customers. So yeah, it sucks that it's a high cost of doing business, but there are lots of other high costs of doing business out there in the world, and I'm not going to tell a restaurant that I don't need a clean plate because water costs are high right now.

            1. re: JasmineG
              Robert Lauriston Oct 19, 2010 11:45 AM

              If you make an OpenTable reservation through the OT link on a restaurant's Web site rather than through opentable.com, it costs the restaurant 25 cents instead of $1.

              1. re: Robert Lauriston
                JasmineG Oct 19, 2010 12:37 PM

                See, that's good info to know and keep in mind. And that raises the other problem: restaurant websites are generally so awful that it often takes a hunt to find that information (or even just the hours and the phone number to call for reservations) or you have to sit through music or an annoyingly long Flash thing in order to even get to the main site, and some have the wrong info for their own restaurants (and many are completely inaccessible on a mobile device). If many restaurants could make it easier for people to make reservations directly with them, maybe customers wouldn't have flocked to Open Table.

                1. re: JasmineG
                  Robert Lauriston Oct 19, 2010 12:54 PM

                  Yeah, it's amazing how few restaurants recognize that the most important design considerations for their Web sites are that they be easily navigable on all platforms including mobile devices and that prospective guests can quickly and easily find basic information, particularly the hours, address, phone number, reservation link, and menus. I looked up a new restaurant on my smartphone recently and had to phone them twice, once to ask if they were open and then again when I realized the site didn't have their address.

                  Though I think OpenTable's ability to find available tables at a particular time for a particular cuisine and/or near a particular location would make it popular even if restaurants all had great reservation tools on their own sites. On the other hand, Yelp will often find a lot more restaurants; it doesn't know whether tables are available, but in most cases it knows if they are open at a particular time.

                  1. re: JasmineG
                    o
                    originalfig Oct 21, 2010 06:15 PM

                    Robert - Re .25 vs dollar charge, that is GREAT info-- a perfect compromise for customers who want both the convenience (and/or points) of an Open Table reservation and to support restaurateurs.

                    JasmineG: Yes!! Could someone please just *ban* annoying flash home pages that take forever to load and are completely unclickable? And, while we're at it, annoying music that suddenly blares from your computer at the most inconvenient times?

                    I totally agree that this would make customers more likely to go through the restaurant page rather than OT to make a reservation. Plus, it would be a more pleasant experience.

              2. re: susancinsf
                Jay F Oct 21, 2010 09:00 PM

                What's the big deal about paying for their employees' health care costs out of the money they take in from customers? How do you think they would pay for it?

                1. re: Jay F
                  janetofreno Oct 21, 2010 10:18 PM

                  I think the point is that the restaurant in question adds a surcharge to each meal (rather than just include health care in the cost of doing business). I suppose its to make the point that health care is expensive, but all it does is mislead the customer into thinking their meal will be cheaper than it turns out to be.

                  1. re: janetofreno
                    n
                    nocharge Oct 22, 2010 02:24 AM

                    If you have an issue with a health care surcharge, how about the sales tax? Why not take issue with the fact that it's not baked into the price like in Europe? It certainly makes the menu prices look misleadingly lower than what the final bill will look like. As for not baking in the particular health-care surcharge many SF restaurants charge into the price, I think there are two very good reasons for it:

                    1. To help remind the public that if you vote for something that's costly, you will have to pay for it.

                    2. To help redress the inequity between the FOH and the kitchen. If the added cost would simply have been to passed on to customers as price increases for individual dishes, that inequity would have grown worse.

                  2. re: Jay F
                    Robert Lauriston Oct 22, 2010 11:32 AM

                    One issue with the Healthy San Francisco payroll tax is that restaurants with fewer than 20 employees don't have to pay it, and restaurants with over 100 employees have to pay 50% more ($1.96 per hour per employee) than those with 20 to 100 ($1.31).

                    If a restaurant passes the tax on to customers as a surcharge, like sales tax, their menu prices won't be higher than competing restaurants that don't have to pay it, or that pay less.

                    1. re: Robert Lauriston
                      Ruth Lafler Oct 22, 2010 01:52 PM

                      Are you saying it's a good thing that restaurants that charge a surcharge can appear to have the same menu prices as those that don't, even when a meal there will end up costing more? Because as a consumer, if I'm comparing restaurants by the prices on their menus, I would certainly find that to be a deceptive practice.

                      1. re: Ruth Lafler
                        Robert Lauriston Oct 22, 2010 02:13 PM

                        I don't think I have anything to add to what's been said in the relevant topic on the Not About Food board:

                        http://chowhound.chow.com/topics/551302

              3. j
                johnq Oct 19, 2010 09:56 AM

                If OpenTable is a monopoly, and if it's using its monopoly status to jack up prices, that's clearly a problem in the marketplace. That problem will inevitably be solved the way such problems are always solved: restaurants will resist the higher prices, and competition will appear. Bill Gates did indeed use Microsoft's monopoly position in an improper manner during the 1990s. The market moved on. When was the last time you heard about Microsoft's monopoly being a problem? People are much more likely these days to complain about Google or Facebook.

                So I don't see the monopoly issue being anything more than transitory, and I've yet to see any evidence that OpenTable is in fact hurting restaurants, at least any more than any other vendor's prices. I don't know about anywhere else, but the restaurant market in San Francisco seems to be in pretty good shape. In fact, reservations are noticeably harder to get now than a year ago, particularly at high end places. That's mostly the result of macroeconomic issues that are beyond the control of restaurants or restaurant vendors, but if OpenTable is having a particularly pernicious effect, it's difficult to see it, at least from the customer's perspective.

                Beyond that, the economic arguments made in the original article are clearly wrong. Arguing that restaurants can't afford OpenTable because the OpenTable charge equals the profit margin on an average meal makes no more sense than arguing that restaurants can't afford food because the price of food also exceeds the profit margin. OpenTable is a marginal expense. A restaurant choosing to use OpenTable will inevitably pass that expense onto its customers. This is no more unfair than restaurants that provide "free" validated parking, an expense that is also passed on to all customers, including those who don't use it.

                And I continue to believe that this is actually about competition. In the old days, I'd decide to go out to a particular restaurant (e.g., Incanto), and call that restaurant to see if they had availability. The result was, I ended up eating at a relatively limited number of places, since I was generally making the choice based on places I'd been, or possibly places I'd recently heard about. If I ate at Incanto and liked it, they'd be on my list, and their actual competition, as far as I was concerned, would be the couple of other similar restaurants I was already familiar with.

                Nowadays, I start with OpenTable and see who has availability when I want to eat. I generally end up with dozens of options, including numerous places I haven't eaten before. Even if I had previously eaten at, and liked, Incanto, they're now competing with many more options than before. That means that in order to get my business as a repeat customer, they're going to have to give me a better experience than would be the case without OpenTable.

                OpenTable has made life easier for restaurant customers. I'm not terribly interested in eating at a place that tells me I have to undergo some inconvenience in order to support their business model. If Incanto wants me as a customer, they'll join OpenTable, or help create a similar, aggregate reservation system that's more to their liking but equally convenient for me.

                5 Replies
                1. re: johnq
                  n
                  nocharge Oct 19, 2010 02:06 PM

                  Regarding the competition argument: OpenTable as a medium for restaurants to advertise their openings is great for competition. If the cost of using it is so high that some restaurants chose not to use it, that's bad for competition. I'm sure Incanto would love to compete with other restaurants by advertising their availability on OpenTable if they could do so for free. It would certainly make people who've never eaten there more aware of their existence.

                  I find it perfectly reasonable for the owners of Incanto to explain their decision not to use OpenTable. I once asked a restaurant owner why he had taken a dish that I liked off the menu. He said that they couldn't make any money on it. Apparently it took a lot more work to prepare it than the other dishes and passing the cost on to the customer by jacking up the price was not a realistic option given how much it had been selling before. It may have made me less inclined to visit that restaurant, but at least I understood the reasoning. Likewise, if the owners of Incanto don't feel that OpenTable's service is cost-effective, who can blame them for not using it.

                  I like the service OpenTable provides and I found it interesting to learn about the cost that is passed on to me as a customer for the convenience of using it. I'm pretty sure OpenTable charges the restaurant (and, hence, me as a customer) as much as they feel they can get away with and that may be a lot more than if they had serious competition.

                  1. re: nocharge
                    Robert Lauriston Oct 19, 2010 02:19 PM

                    Mark Pastore's main concern is not the cost but control of customer relationships:

                    "OpenTable has convinced restaurants to pay it substantial fees while it takes the customer relationship out of the hands of the restaurant and places control into OpenTable’s hands. Then, after having lent their names to the service, enabled OpenTable to attract online diners, and funded the construction of a powerful database of customers loyal to OpenTable, restaurants find that they themselves no longer own the customer relationship. Restaurants that want continued access to those diners now have to pay OpenTable for the privilege."

                    My own analysis is that OpenTable is a valuable promotional tool for a new restaurant, but once our POS system has similar tools it will likely be to our advantage to reduce our dependence on OpenTable and minimize our payments to them.

                    1. re: Robert Lauriston
                      Ruth Lafler Oct 22, 2010 01:55 PM

                      Of course you have only to look at susancinsf's post above to realize that having the customer relationship out of the restaurant's hands might not be a bad thing. And if more restaurants had customer-friendly websites, maybe they wouldn't have as much need for Open Table.

                      I'm not sure what he's talking about when he says Open Table has "control of customer relationships." Does OpenTable prevent restaurants from independently doing what it needs to do to "own the customer relationship" they way the would if they weren't on Open Table?

                      1. re: Ruth Lafler
                        JasmineG Oct 25, 2010 03:44 PM

                        And that's definitely not true, because restaurants have clearly gotten my email from reservations that I've made on OpenTable and added me to their email lists. And they often follow up with confirmation/reminder phone calls of the reservation. I'm not sure why my "relationship" with the restaurant is disrupted because I made the reservation with one online computer system as opposed to another online computer system.

                        1. re: Ruth Lafler
                          MSK Feb 16, 2011 02:01 PM

                          Silly me, I thought the relationship with the restaurant begins as I step inside the door. OT is just a way to get me there. Like a doorman at a hotel.

                          There are so many aspects to why one would frequent a dining establishment that to take this one interaction to task is unrealistic. Too many restaurants have spoiled my experience by poor customer service or food quality that it would seem that that should be the focus of their attention.

                          In addition, if OT has the capacity to help a restaurant manage their tables more efficiently (not making me wait when I show up on-time for a reservation, for ex.), the "customer relationship" already is benefited. From there....the restaurant is on their own.

                  2. Robert Lauriston Oct 19, 2010 10:37 AM

                    Mark's piece makes me think I should run the numbers on Opentable again. I have to say I'm not happy with the way they suck some charges out of our bank account and don't provide us a single itemized monthly invoice the way other service providers do.

                    Radiant / Aloha, one of the most popular restaurant POS systems, is working on a competing system that's much less expensive, AND integrates with the POS, which is perhaps Opentable's biggest shortcoming. Such competition might force Opentable to lower its prices, offer more flexible pricing plans, and/or provide the integration many customers would like.

                    On the other hand, restaurant reservations are like auctions: it's much more useful to consumers and businesses if they're all in the same system. So it will be hard for other systems to compete with Opentable, just as it's hard for anyone to compete with eBay.

                    4 Replies
                    1. re: Robert Lauriston
                      Robert Lauriston Oct 19, 2010 10:52 AM

                      Come to think of it, Google and/or Yelp could aggregate reservation systems from multiple providers, undercutting Opentable's monopoly.

                      1. re: Robert Lauriston
                        l
                        lmnopm Oct 19, 2010 12:51 PM

                        As an Opentable user (maybe 2x/month) it is not only convenient but also reminds me of places I might not have thought of. I would think that from the restaurant's perspective, $1 a head to get someone in the door (advertising, not needing staff to take a call) is relatively inexpensive. For me, I will use it even if it is a regular place for me - I can easily send the confirmation to my dining companion(s). I often make the reservations while working and not wanting to or being able to make a call. It also allows reservations to be made during non-opening hours. I don't think of it like restaurant.com where I really wouldn't want a favorite little place to feed me nearly for free. A fairly new place (nothing fancy) that I had thought about trying but it fell off the radar got me eating there twice because of opentable - once a last minute thing when looking for a place, and then it was so good, a week later, a friend joined us. So, it cost them a total of $5, and they probably got about $125 out of the two visits.

                        1. re: Robert Lauriston
                          bbulkow Oct 19, 2010 12:58 PM

                          Anyone who might consider this strategy would need to understand the legal and technical ramifications. These kinds of aggregation can be a minefield.

                          1. re: bbulkow
                            Robert Lauriston Oct 19, 2010 01:21 PM

                            Nothing new for Google, and everyone other than OpenTable would probably be eager to participate.

                      2. j
                        johnq Oct 19, 2010 02:13 PM

                        Creation of an alternative service shouldn’t be that hard to accomplish, since existing systems are already about 80% of the way there. Tripadvisor, for example, lets the user search for hotels, restaurants, flights, etc. If you want to search for a hotel, you enter the relevant dates, and the site sends that search to the hotel’s web site and to a variety of third party aggregators (e.g., Expedia, Hotels.com). The results come back in separate pop-up windows, all of which appear to include the same availability. I suspect the third party sites are pulling the availability directly from the hotel’s site.

                        This is somewhat unwieldy from the customer’s point of view, since there’s not much point in having six windows with the same information. On the other hand, there’s no monopoly problem since multiple sites are returning the same information. I don’t know how their business models work, but I doubt the hotels feel they’re being gouged.

                        So the user can either go to Tripadvisor or one of its competitors, or directly to one of the aggregators. Either way, the same information is presented through multiple venues.

                        If you search for restaurants on Tripadvisor, however, all you get are reviews. No availability, no booking service.

                        Yelp, on the other hand, does provide a reservation service for restaurants, but that service links into OpenTable.

                        The only restaurant reservation service other than OpenTable that I’m aware of is RestaurantReservations.com. However, that site doesn’t appear to have any San Francisco restaurants, and may not actually have any restaurants at all.

                        Again, it seems that about 80% of the necessary infrastructure exists to create a competitive restaurant reservation system. For example, if Yelp would agree to add RestaurantReservations.com alongside OpenTable, and to pop up both windows whenever a search is done, and if a critical mass of restaurants were to sign up with RestaurantReservations.com, then you’d have a restaurant reservation system that would resemble that which exists for hotels, including competing services.

                        I’m not sure why something like this hasn’t been done in the restaurant world, since in the abstract it doesn’t seem that hard. I suspect that, despite the complaints from Incanto, there isn’t actually that much demand for a competing restaurant reservation service, otherwise such a service would already exist.

                        9 Replies
                        1. re: johnq
                          n
                          nocharge Oct 19, 2010 03:11 PM

                          If restaurants, like airlines and hotel chains, had their own industrial strength reservation systems directly open to the public, there would be aggregators left and right. However, if the big existing aggregator, OpenTable, owns the reservation system, it makes setting up competing services a challenge. Nevertheless, people are trying.
                          http://online.wsj.com/article/SB10001...

                          1. re: nocharge
                            j
                            johnq Oct 19, 2010 07:41 PM

                            According to the article there are several start-ups targeting this market. As far as I'm concerned, that should resolve the problem. If there is a significant market demand for lower price reservations services, one of these competitors will succeed, and that niche will be filled. If no one else can succeed at this, then my assumption will be that the complaints are overblown, and OpenTable is in fact providing reasonable value for its services. Either way, as a customer I'm going to do what's convenient for me, so I'll be using one or another of the reservation services. As a customer, I see no reason to inconvenience myself to support a restaurant owner's business model, particularly when the vast majority of his competitors appear able to accommodate themselves to changed conditions.

                            I'm sure Incanto is a good restaurant. It may even be a great restaurant. I have no idea, even though I eat out in San Francisco a couple of times a week. Since it's not on OpenTable it simply doesn't exist for me, and I see no reason to seek it out, because OpenTable gives me more options than I can handle as it is.

                            1. re: johnq
                              Robert Lauriston Oct 20, 2010 11:18 AM

                              There are roughly 4,000 restaurants in San Francisco. Only 434 of them are currently on OpenTable.

                              1. re: Robert Lauriston
                                j
                                johnq Oct 20, 2010 03:41 PM

                                I'm not sure how to interpret those statistics. I assume that reservations aren't even a relevant consideration for most restaurants, e.g., chain restaurants, lower priced places, etc. I don't know how many non-reservation restaurants there are in the Mission alone, but I'm guessing it's in the hundreds.

                                So the real question is, not how many non-OpenTable restaurants exist, but how many restaurants that take reservations aren't on OpenTable? Or, for my purposes, how many "dining experience" type restaurants aren't on OpenTable? Incanto, for example, is by all accounts a very good restaurant. If there were hundreds of restaurants comparable to Incanto that aren't on OpenTable, I'd be very surprised, and that might cause me to rethink my reliance on OpenTable.

                                1. re: johnq
                                  susancinsf Oct 21, 2010 07:38 PM

                                  my interpretation of Robert's stats is that I certainly would *never* limit my dining out to those restaurants on Open Table: Too many places to eat that I'd miss otherwise! (and yes, many take reservations, based on my own experience).

                                  But perhaps by 'good' you mean 'upscale'. In that case, maybe the number goes down a bit. However I'd never limit my SF dining to only upscale places....

                                  edited to add: not sure Incanto is truly upscale, however, though it certainly is good (casual ambiance and excellent food, notwithstanding that the article annoyed me, and the service there sometimes annoys me too....).

                                  1. re: johnq
                                    n
                                    nocharge Oct 21, 2010 07:44 PM

                                    Are you missing out if you only eat at restaurants that are on OpenTable? Probably. If we filter the 4000+ restaurants in San Francisco by only considering those that are Zagat rated and have a food rating of 22 or higher, we find around 120 that are not on OpenTable. That's around 40-50 percent of the total. (The exact number depends on how you count restaurants with multiple locations.) This number includes a few places that are irrelevant as "dining experience" places like a food truck and a couple of coffee and sandwich shops. It also depends on your definition of "dining experience" -- there are a couple of taquerias in there as well. But the bottom line is that there are many interesting restaurants that either don't take reservations, like Tadich and Bocadillos, or don't use OpenTable, like Gary Danko and Yank Sing.

                                    1. re: nocharge
                                      j
                                      johnq Oct 21, 2010 08:56 PM

                                      Interesting. I assume you need a paid subscription to Zagat's to do that search.

                                      I would definitely identify Gary Danko as a dining experience type of place. I've had it in the back of my mind as a place to try for some time, but never got around to it. I guess now I know why.

                                      Yank Sing doesn't concern me as much. I eat there all the time and have never bothered with reservations. And places that don't take reservations, like Tadich, are obviously irrelevant.

                                      So Incanto and Gary Danko are two restaurants I almost certainly would have tried by now if they'd been on OpenTable. I'd be interested in knowing what else is on that list of 120. If it turns out there are a lot of good places that require reservations but aren't on OpenTable, I might reconsider my reservation strategy.

                                      1. re: johnq
                                        n
                                        nocharge Oct 21, 2010 11:36 PM

                                        Well, if you equate "dining experience" with fine dining restaurants that take reservations, OpenTable covers them really well. On the other hand, you would miss out on places like Bocadillos that has a 3 star SF Chronicle rating and has been on its Top 100 Restaurant list every year. Since it doesn't take reservations, it will never show up on OpenTable. Some people don't mind hole-in-the-wall places with little ambience if the food is great. Others do. To each his own. If you refuse to dine at restaurants that don't take reservations, you'll probably cut the list by half or more. (Quite a few places only take reservations for larger parties, like Beretta.) But here it is. No guarantee about absolute correctness.

                                        4505 Meats
                                        A La Turca
                                        The Alembic
                                        Anchor Oyster Bar
                                        Angkor Borei
                                        Ariake Japanese
                                        B Star Bar
                                        Bar Jules
                                        Basil Thai
                                        Beretta
                                        Bissap Baobob
                                        Blue Bottle Cafe
                                        Bocadillos
                                        Boccalone Salumeria
                                        Bodega Bistro
                                        Boulette's Larder
                                        Brenda's French Soul Food
                                        Brother's Korean
                                        Burma Superstar
                                        Cafe Jacqueline
                                        Cajun Pacific
                                        Cha-Ya Vegetarian
                                        Chez Maman
                                        Chloe's Cafe
                                        Crustacean
                                        Delaroso
                                        Delessio Market & Bakery
                                        Delfina
                                        Dottie's True Blue Cafe
                                        Dragon Well
                                        Ebisu
                                        Eiji
                                        El Tonayense
                                        Eliza's
                                        Esperpento
                                        Farmerbrown's Little Skillet
                                        Gamine
                                        Gary Danko
                                        Gialina
                                        Giorgio's Pizzeria
                                        Helmand Palace
                                        Hog Island
                                        The House
                                        Il Cane Rosso
                                        In-N-Out Burger
                                        Incanto
                                        Jai Yun
                                        Joe's Cable Car
                                        Kabuto
                                        Katana-Ya
                                        Kate's Kitchen
                                        Katia's Russian Tea Room
                                        Kiss Seafood
                                        Kitchenette SF
                                        Koo
                                        L'Osteria del Forno
                                        La Taqueria
                                        Lahore Karahi
                                        Le P'tit Lauren
                                        Limon Peruvian Rotisserie
                                        Little Chihuahua
                                        Little Star Pizza
                                        Maki
                                        Mama's on Washington Square
                                        Manora's
                                        Marnee Thai
                                        Mescolanza
                                        Mixt Greens
                                        Murracci's
                                        Naked Lunch
                                        Nopalito
                                        Out the Door
                                        Oyaji
                                        Pacific Cafe
                                        Pancho Villa Taqueria
                                        Pane e Vino
                                        Papalote Mexican Grill
                                        Patxi's Chicago Pizza
                                        Pauline's
                                        Pazzia
                                        Pesce
                                        Pica Pica Maize Kitchen
                                        Pizza Nostra
                                        Pizzeria Delfina
                                        Pizzetta 211
                                        Prime Rib Shabu
                                        R&G Lounge
                                        Ristorante Ideale
                                        Ristorante Milano
                                        Rosamunde Sausage Grill
                                        Rose's Cafe
                                        Ryoko's
                                        Saha Arabic Fusion
                                        Sai Jai Thai
                                        Saigon Sandwiches
                                        San Tung
                                        Scoma's
                                        Sebo
                                        The Sentinel
                                        Shanghai Dumpling King
                                        Suppenkuche
                                        Suriya
                                        Sushi Zone
                                        Swan Oyster Depot
                                        Tacolicious
                                        Tadich Grill
                                        Tataki Sushi & Sake Bar
                                        Thai House Express
                                        Thanh Long
                                        Thep Phanom Thai Cuisine
                                        Tommaso's
                                        Ton Kiang
                                        Tony's Pizza Napoletana
                                        Truly Mediterranean
                                        Universal Cafe
                                        Yank Sing
                                        Zarzuela
                                        Zushi Puzzle

                                    2. re: johnq
                                      Robert Lauriston Oct 22, 2010 11:34 AM

                                      I started a topic about restaurants that take reservations but aren't on OpenTable:

                                      http://chowhound.chow.com/topics/742275

                            2. pitu Oct 19, 2010 04:18 PM

                              Wow. I can't go for a biz model that squeezes out $$ from a thin margin. AND I walked in to Incanto the last time I was in SF and had a great meal.

                              3 Replies
                              1. re: pitu
                                b
                                budnball Oct 19, 2010 08:16 PM

                                As an Open Table user who lives in the burbs, I find the service invaluble. I'm one of the Friday, Saturday, night diners and there is no other way to find a table in San Franscico or Oakland without spending hours on the phone. Maybe the answer is for each restaurant to be able to show available times on their own websites. Seems doable.

                                1. re: budnball
                                  j
                                  johnq Oct 20, 2010 03:43 PM

                                  Looking at dozens of restaurant websites for reservation times would be almost as much hassle as calling dozens of restaurants. This is the kind of problem that demands central aggregation. Whether OpenTable is the best aggregator is a different issue.

                                  1. re: johnq
                                    b
                                    budnball Oct 21, 2010 09:13 AM

                                    Of course you are right about the time and hassle factor, which is why Open Table works so well. Do we complain because they are successful or because they are a monopoly? And is that their fault? The biz model is a brilliant one. However, Blockbuster was a great model also until Netfilx .....and Redbox.....
                                    Things Change

                              2. c oliver Oct 21, 2010 08:06 PM

                                I had no idea about this. I don't use OT very often and sometimes it's just for my own convenience (a few keystrokes rather than a local phone call). Going forward I'll call the restaurant. I want good restaurants to make plenty of money :)

                                1. sockii Oct 22, 2010 12:07 PM

                                  Interesting topic. I am definitely a fan of the convenience of OpenTable though I've wondered what the cost is for restaurants. I know at least one high-profile Philadelphia chef is taking a stance against going with OpenTable and instead investing in his own on-line reservation system.

                                  http://blog.sholaolunloyo.com/studiok...

                                  Personally, and I know this is just my own quirk/issue, but I just am not a fan of phone conversations and even have a bit of a phobia about them. (Much prefer either 1. in person, face to face discussions or 2. on-line, impersonal, when I have the time to respond and evaluate situations without the instant pressure of a phone call that lacks being able to see/judge the reactions of the person I'm talking to.) Hence I truly do have a problem with calling restaurants to make reservations, especially as there are some in Philly where I've felt very talked down to/impatiently answered for daring to ask if they had an open table for two that evening.

                                  If a restaurant isn't on Open Table, or doesn't have its own or alternative on-line method of doing reservations, I'm much less likely to go there, especially if I know it's a place you generally can't walk in. I like being able to put in a time period, number of people, and search for what's available. I love to eat good meals out but it's very rare I can plan very far in advance to get a coveted table at a high-profile restaurant, that doesn't take on-line reservations, that needs to be planned for weeks or months in advance, etc.

                                  I've run a small business before. I know well how all the operating costs add up and how one looks to cut corners where you can to keep in the black. Some places don't take credit cards because yeah, that's another service/convenience to customers that can cut into your profits. Or you just budget that in when you set your prices from the start. Open Table will continue to be a service I take advantage of where I can, and which will push me to dine in some locations over those that don't offer any on-line reservation system, because it makes me comfortable.

                                  I also don't buy the argument that it "has taken control of the customer relationship away from the restaurants." Almost every restaurant I make a reservation for via OpenTable calls me the day of or before my reservation, to confirm it and if I have/need any special considerations ask for it then. But at least I know I've GOT a reservation at that point.

                                  1. Robert Lauriston Oct 22, 2010 02:37 PM

                                    "I'm not sure what he's talking about when he says Open Table has 'control of customer relationships.'"

                                    I can't speak for him, but here are a few examples of things OpenTable's restaurant customers might consider interference with customer relationship management:

                                    The "Dining Rewards" give users an incentive to reserve through opentable.com (which costs the restaurant a dollar) rather than through the restaurant's Web site (25 cents) or by phone (free).

                                    When a customer goes to opentable.com with the intent of making a reservation at a particular restaurant, they might be distracted by some of OpenTable's promotions and end up eating somewhere else. For example, looking at the site right now, the system apparently knows that I like Italian food, and shows me a list of of ten Italian restaurants. The top spots on that list are "1000-point" places, which I believe means they're paying for favorable placement.

                                    OpenTable filters customer data out of the reports they give restaurants, so unless someone specifically opts to give their email address or phone number (which most people don't), the restaurant has no way of contacting them to resolve any complaint, or of identifying who their server was. On Yelp, in contrast, a business owner can communicate directly with anyone who reviews the place.

                                    10 Replies
                                    1. re: Robert Lauriston
                                      j
                                      johnq Oct 22, 2010 05:42 PM

                                      I'm not sure I get these customer relationship issues. The Dining Rewards system is kind of a joke. The standard award for a reservation is $1.00. I tend to doubt that's going to influence anyone's behavior very much. In fact, I've never used Dining Rewards and had to research what it means.

                                      Beyond that, the payment is for doing what I'd already do for free. If restaurant phone lines or web sites were more convenient than OpenTable, an OpenTable incentive could theoretically make a difference. Since OpenTable is already more convenient, the incentive is irrelevant to me.

                                      I'm also interested in knowing how the redemption process works. I've never used Dining Rewards points, but OpenTable's web site indicate that you can redeem the points at OpenTable restaurants. I'm assuming that OpenTable pays for that, rather than the individual restaurant. If so, it seems to me that the $1 per reservation charge is actually being rebated to the restaurants, in the form of coupons issued by OpenTable to customers, who redeem those coupons at restaurants. If I'm right about this, then restaurants (in the aggregate) would appear to be getting $1 per reservation back from OpenTable, making Dining Rewards a net positive for them. But, again, I don't know how the internals of the program work.

                                      The issue about customers being "distracted" by other restaurants seems to me to be a complaint about competition. OpenTable definitely makes it easier to see what other restaurants are available, and which restaurants are running specials through the OpenTable 1,000 point system (for those who care about that). I understand why restaurant owners would prefer that customers not know what else is available, but I'm a customer, and for me this is a definite feature of the system.

                                      I'm not sure about the flitering of customer data. Restaurants absolutely get my phone number, since a number of them call to confirm the reservation. I assume the issue here concerns OpenTable's feedback system. I tend to doubt, however, that the restaurants are actually losing information they otherwise would have received. Customers can, and presumably do, complain directly to the restaurant. A customer who gives negative feedback to OpenTable but doesn't contact the restaurant is probably someone who wouldn't have contacted the restaurant either way, so at worst OpenTable is providing additional feedback that wouldn't otherwise be available. And Yelp is not comparable. It's one thing to have a restaurant owner respond in public to a public complaint posted under a pseudonym. It would be quite a different thing to have OpenTable give out an individual's contact information for a restaurant to respond directly to that individual. That would strike me as a serious breach of privacy.

                                      1. re: johnq
                                        Robert Lauriston Oct 22, 2010 06:25 PM

                                        On Yelp, business owners can respond directly and privately to users. Such messages go to the user's email. If the person replies, they're no longer anonymous. Yelp is not all that different since they partner with OpenTable and have reservation links to opentable.com (which they will not replace with links to the restaurant's own site).

                                        Dining Rewards are 100 points *per reservation* while restaurants pay $1 *per person* so only a fraction of the money might come back to the restaurants. Not everyone redeems their points and those who do don't necessarily spend more than they would otherwise.

                                        1. re: Robert Lauriston
                                          c oliver Oct 22, 2010 06:36 PM

                                          Wait! I've not read every post here, I admit that. But are you saying that if I book a party of four through OT that the restaurant pays $4?

                                          1. re: c oliver
                                            Robert Lauriston Oct 22, 2010 07:20 PM

                                            Yes, OT charges $1 per head for reservations made through opentable.com.

                                            The restaurant's cost is somewhat higher as there are also fixed monthly charges.

                                            1. re: Robert Lauriston
                                              c oliver Oct 23, 2010 07:40 AM

                                              Well, that's just nuts. I will never use them again. I don't criticize their business cause they can run it as they choose. But everything I read and hear says that most restaurants have such low margins, why take more away from them?

                                              1. re: Robert Lauriston
                                                alanbarnes Oct 23, 2010 10:26 AM

                                                Not to get too far off topic, but does the restaurant still have to pay OT if the diner cancels the reservation? I've got an upcoming dinner where I was planning to call the restaurant anyway - if it'll save the place a couple of bucks for me to make the reservation over the phone, I'll re-book the table at the same time.

                                                1. re: alanbarnes
                                                  Robert Lauriston Oct 23, 2010 10:36 AM

                                                  My understanding is that the restaurant is charged only when people show up and check in.

                                                  1. re: Robert Lauriston
                                                    alanbarnes Oct 23, 2010 11:42 AM

                                                    Cool. Thanks.

                                        2. re: Robert Lauriston
                                          f
                                          Fine Oct 22, 2010 07:22 PM

                                          i have more than once had the experience of not being given a point--turned out I had cliked on OT via restaurant's link. When I checked, I did learn that one did not receive points if reserving on OT via restaurant sites.

                                          Under "for what it's worth": A while back, I believe I cc'd Incanto on an email I sent Monterey Bay Aquarium re local restaurants serving endangered fish. I received a hysterical and borderline abusive reply from the owner of Incanto, who eventually cooled down and apologized for the outburst after I "explained" where I was coming from. I inferred from tnis experience that this man has a rather volatile personality.

                                          For a recent trip to NYC, I entered times and neighborhoods on OT--as I've done many times before for trips--saving hours of effort I would actually never have expended.

                                          Glad so many fellow-posters are well off, even in this economy. I certainly enjoy using the perioidic 20-dollar check from OT to pay for part of a meal.

                                          And have none of you ever found yourselves at, say, mid-evening, deciding not to start cooking dinner and going to OT to check on availability instead of having to drag out the yellow pages and start phoning?

                                          1. re: Fine
                                            Robert Lauriston Oct 22, 2010 08:51 PM

                                            I've done that, though I often use Yelp for that, since it finds a lot more places, and more often than not we're going out so late that we can get in anywhere. It can't tell you (yet, anyway) if there's a table open, but it can give you a list of restaurants that are open.

                                        3. Robert Lauriston Oct 23, 2010 12:00 PM

                                          Brett Emerson, who owns Congigo in SF, wrote a detailed blog piece about the pros and cons of OpenTable. Apparently he decided it was worth the money, since Contigo is on opentable.com.

                                          http://www.inpraiseofsardines.com/blo...

                                          I figured OpenTable was worth it for the promotional value alone, at least while we're building up the business. Last month, about 20% of our customers reserved through opentable.com. Some of those people would have come anyway, but that's still one of the most effective promotional tools we have. On top of that, we get the software, which handles not only reservations but seating and waiting list, and the touchscreen and computer hardware for the host station.

                                          1 Reply
                                          1. re: Robert Lauriston
                                            Bob Martinez Oct 26, 2010 08:18 AM

                                            Robert, thanks for your patience in participating in this thread and the level headed tone you've taken in your responses. The information you've provided has made this discussion much more informative.

                                          2. Robert Lauriston Oct 26, 2010 02:52 PM

                                            Using the restaurant back end software, I just looked at some reservations made over the Web, and in in many cases the email field is blank, so we have only the telephone number. I'm not sure what determines whether we see the email or not, but OpenTable always has it.

                                            So that's pretty definitely taking control of the customer relationship away from the restaurant.

                                            4 Replies
                                            1. re: Robert Lauriston
                                              JasmineG Oct 26, 2010 03:02 PM

                                              I don't quite understand how not having an email address takes control of the customer relationship away from the restaurant. If a customer calls and makes a reservation, the restaurant doesn't have the email address either.

                                              And I have to say, restaurants that put me on their email list after getting my email address from Open Table (which has happened quite a few times) do a pretty good job of trying to destroy the relationship on their own.

                                              1. re: JasmineG
                                                Robert Lauriston Oct 26, 2010 06:08 PM

                                                If we took a Web reservation through our own Web site, we'd automatically have the customer's email. It's particularly frustrating not to have the email address when the phone number turns out to be wrong.

                                                It's bad business to add someone to a mailing list without explicit permission.

                                                1. re: Robert Lauriston
                                                  JasmineG Oct 26, 2010 08:35 PM

                                                  Let me tell you, a whole lot of restaurants don't get that latter point.

                                              2. re: Robert Lauriston
                                                Bob Martinez Oct 27, 2010 03:47 AM

                                                OpenTable always has the email address of customers because you have to give a valid email address when you set up your OT account. When you make a reservation on OT it gives you the option of choosing to share that email address with the restaurant in order to get promotional mailings.

                                              3. d
                                                dansimons Nov 11, 2010 09:24 AM

                                                Is OpenTable Worth It? An Affirmative Rebuttal
                                                By Dan Simons, Concept Developer and Managing Partner, Founding Farmers

                                                How many times have you purchased a product, only to find that you are not getting the value or functionality for which you paid? You become annoyed with how much money you’ve spent and then curse the product or company, maybe even throwing said product away. All the while, you never bothered to open up the user manual or build true fluency. This is a classic case of the user not understanding the product and blaming its creator.

                                                Take the iPhone. How many of us have spent $499 for version 4.0, yet have never used the Face Time function? We may be frustrated that we haven’t received our money’s worth, but are only using our iPhone for the basics: calls/texting, checking in on Facebook and playing Angry Birds. Could we say the same about OpenTable, the restaurant industry’s leader in online reservations?

                                                Mark Pastore recently penned a well-written article titled “Is OpenTable worth it?” where he expresses his frustration at OpenTable being the “nearly exclusive gatekeeper to this country’s restaurant seats” and questions its true value to the restaurateur, whom he says spend more money on OpenTable than it is “actually worth.”

                                                He performed an informal survey of a dozen or so restaurant managers and owners throughout the country, most of whom were not happy with OpenTable. Many referenced feeling held hostage by “a hugely successful multinational corporation (that) has skillfully out-executed and out-maneuvered its competitors to create a valuable business.” What those that participated in Mr. Pastore’s survey don’t mention (and the one member of the dozen that felt OpenTable increased the value of his restaurant probably knows) is what we have found to be the most important ingredient to OpenTable’s recipe: the software.

                                                The OpenTable software is the Face Time of the iPhone. It is a catalyst to optimize your FOH operations: the analytics, the metrics, data and health of the business. Do you know that the table turn time report allows you to better optimize seating? That tracking server performance may allow you to further delve into a server’s lack of dessert/coffee sales? Also included is seat utilization statistics (is your host staff seating two tops on four tops all night?) and the ability to capture guest likes and dislikes, VIP’s – naming just a few – but only if you use it.

                                                To be fair, the price of OpenTable assumes you will use the robust software, software that can be overwhelming in a world of user-friendliness. OpenTable is growing faster than they can keep up with providing customer service that provides assistance in receiving 100% utilization of their product. While there is phone customer support and a video-filled learning website (www.otlearningcenter.com), these only review the entry-level functions most users already know – and what we know at Founding Farmers – the meat of the burger is in the analytics; functions we were intimidated by at first.

                                                We recently decided to create a case study by using an OpenTable specialist to dive into these analytics and help us either find value in OT or find a way to escape its clutches. As one of the most booked restaurants in the greater mid-Atlantic region, Founding Farmers is an OpenTable customer with an astronomical monthly bill: roughly $6,000. What we weren’t doing was implementing the actual function of the software, causing a bitter taste in my mouth, similar to Mr. Pastore’s feeling. I sort of felt that we were hooked on it like an addict could be hooked on drugs; it generates a lot of reservations that I think we may get anyway—but I’m scared to stop using it—its just a magic box sitting in the corner. I have no idea what else I could be doing with it. So, we ended up with very expensive reservations! There were two choices: remove OpenTable or see if it was possible to get the money out of it that we were putting into it.
                                                The next 45 days were spent using Founding Farmers as a test site to definitively answer the question “Is there Return on Investment using Open Table?”

                                                We began monitoring table turn times by reports, only to find the reservations sheets were set to have tables turn at least 45 minutes later than they were actually turning (turn time/seat optimization). By following the slot utilization function, we found out that the host staff had been reserving tables for two people in reservations slots created for four, losing 50% of the business designed for that reservation slot.

                                                We monitored server table turn time averages, which allowed us to begin monitoring the ‘why’ of shorter turn times and what wasn’t happening at the table – desserts/coffee being sold, diners being rushed through service by staff, and the like.

                                                We used the actual reservation sheets and floor plan to manage the current shift, in and of itself creating an efficient system in which we kept accurate track of covers, where diners were during their meal, and more accurate wait times via the waitlist.

                                                We started running VIP reports filtered to guests who had dined more than 25 times, marking their profiles as VIP regulars thereafter. This has given the relationship with the guest back to the restaurant to maintain, where we can now acknowledge guest loyalty with appreciation. Not only valuable, but actually priceless.

                                                While there are many more details to share about the functionality of the software and the total value, the easiest conclusion we can convey is that at Founding Farmers, sales are up 15%, yet the monthly cost with OT is still the same. Realize that this is a 15% sales increase in a restaurant that was already extremely busy. The optimization utilization of the software was the catalyst for the sales increase; we could not have been as busy through this analytical lens without the OT software.

                                                Founding Farmers sees the software as having amazing potential and functionality that delivers value, and it is so much more than an expensive reservation system. There are many end users compelled to use it but not knowing how to get the value. To see results from the software, you need to master it—which means either taking classes, making a commitment to self-teaching, or paying a third-party consultant. While it would be nice if the software provider could ensure the end-user is fluent, the vast majority of software providers don’t always ensure that happens. With OpenTable, we see them as not being able to ramp up their user development programs fast enough to take OpenTable users to the next level. The end user is responsible for their purchase and getting the end value, but if a company wants a long-term relationship, they have to help people get that value. OT needs to find a way (either in-house or through a certified 3rd Party Network) to get the end-users fluent, or the sentiment reflected in Mr. Pastore’s article will continue to foment.

                                                We could blame OpenTable, but in the end, we had to blame ourselves for installing, then failing, to do the hard work of getting fluent with the system. In the day and age of the quick fix, the magic pill, and business that moves at the speed of light, we realized the as the end-user, we MUST be in control of the value proposition. Our restaurant could still feel held hostage by our addiction to OT from which we couldn’t escape, or we could finally put in the hard work to get the value out of it. We chose the latter. In doing so, we’ve changed our loathing of the ‘drug’ into loving the hero. OT’s software is clearly a winner with regard to overall return on investment – but only if you use it.

                                                12 Replies
                                                1. re: dansimons
                                                  susancinsf Nov 11, 2010 09:48 AM

                                                  A very interesting rebuttal, thanks for the post. I completely buy the argument that not all restaurant users of OT use it to full advantage. That said, the article does not exactly makes me want to run out and eat at the restaurant in question: seat statistics? (heaven forbid a party of two should be seated at a four top!) maximizing turnover? determining which servers sell dessert and drinks? (though how that fits with measuring servers who 'rush' the patrons through service, or even how the software can help them determine which servers 'rush' the patrons, I certainly can't figure out). And if I had to eat at a restaurant more than 25 (!) times to be considered a 'regular' or "VIP" (and then perhaps more likely to get the better spaced four top I might request, rather than the two top jammed against the wall where I am elbow to elbow with strangers?)....forget it!

                                                  At my favorite restaurant I am greeted by name and with love and a kiss on the cheek and treated like the most valuable regular in the place whenever I dine there; I never feel like a statistic and am always seated at a table that matches my personal preferences (without having to ask); and it has been that way since perhaps my third visit, if not sooner. (The food, it should probably go without saying, was great starting with visit number one). and I don't think I've yet hit the 25 times dining there mark (though I could be getting close). They are on OT. I wonder if they really need it?

                                                  Sigh. No wonder hubby (who was briefly in the biz and now hates restaurants) always looks at me cross-eyed whenever I daydream about opening a restaurant.....

                                                  1. re: susancinsf
                                                    n
                                                    nocharge Nov 12, 2010 02:03 AM

                                                    Well, I found most of the "rebuttal" fairly uninteresting in that it read like something that could have been written by an intern at the OpenTable marketing department. (In particular, the section arguing that spending time (and thereby money) on adjusting settings for the software could yield greater revenue (compared to the suboptimal settings). I have no doubt that it's true, but it is ridiculous as a "rebuttal" to the points made in the original article and anyone that has a clue about software knows that you want it to do the right thing "out of the box" -- if it takes extensive tuning and a big learning curve to get it right, it's a big negative.)

                                                    I found the section about treating regulars/VIPs interesting. I can understand why airlines and hotel chains use computer systems to keep track of their most frequent customers. I can also understand why restaurants would want to track their patrons and their habits. However, when it comes to actually decide what kind a preferential treatment a regular gets, any local fine dining restaurant I would ever go to would decide based on the discretion of the FOH, not a computer algorithm that would show that I had been there 12 times. If I'm truly a regular at a restaurant, people there will know me.

                                                    Incidentally, most of the times when I dine out, I dine at the bar, so no OpenTable reservation. Does the OpenTable software provide provisions for tracking information about these kinds of visits to a restaurants that presumably would make the FOH staff recognize you as a regular? Does anyone know?

                                                    1. re: nocharge
                                                      Robert Lauriston Nov 12, 2010 08:09 AM

                                                      By default, walk-in guests show up as "walk-in" in the OT software. If someone recognizes a walk-in customer, they can and should enter the name, which will add that visit to the customer history.

                                                      This is one of the places where the lack of integration with the POS is annoying. If it's busy, the bartenders aren't going to have time to go over to the host station and enter the name. They should be able to do it on the POS screen at the bar.

                                                  2. re: dansimons
                                                    Robert Lauriston Nov 11, 2010 10:34 AM

                                                    Interesting. Seems like OT adds more value when you're turning away customers.

                                                    Have you upgraded to v9 and implemented Flex Mode?

                                                    1. re: dansimons
                                                      rockandroller1 Nov 11, 2010 11:51 AM

                                                      A very good rebuttal. As a consumer, I didn't know OT had the capability to do any of those things, and I agree OT could do a better job of assisting people with a way to understand and utilize all the functions. But when you buy Microsoft PowerPoint, do they tell you how to use it? It has a lot of functionality but most people just use it to present simple, bulleted lists. You need to self-educate with a good book, taking classes, or a 3rd party trainer, to learn everything it can do. Perhaps there's a new business model here where one could make a LOT of money by being a traveling consultant to restaurants who offers trainers to train management and select FOH staff on how to maximize your OT software. Hmmm...(dreams)

                                                      To the poster below who shudders at the thought of being analyzed like just another number, everyone's doing it to you, you're just not aware of it. All the years I was a server, almost every place I worked had this type of analyzation and calculated way of looking at diners (and how to get more out of them). It's a business.

                                                      1. re: rockandroller1
                                                        susancinsf Nov 11, 2010 01:47 PM

                                                        I am in no position to judge whether 'everyone' does it or not. and of course it is a business. However, I suspect (or at least hope) it is less necessary to have to try and squeeze every last penny out of a customer if one focuses on providing good food and good value. (because the customers will come if you do that, or at least so a Chowhound would like to hope). Some places and some people have soul, and it is clear they are doing what they do at least in large part because they love what they do, not just because they need to be running a business. Those will always be my favorite places. I am not naive enough to believe that number crunching isn't done. However, I don't believe that every place I dine sees me as just another number. I can taste for myself that they are in it for more than the numbers.

                                                        That said, the restaurant that posted the rebuttal was a little more forthcoming about how they view their customers than I would ever want to be in a public forum, if I were in their business.

                                                        The rebuttal was interesting but written strictly from a numbers crunching point of view. It didn't make me want to run out and eat at the writer's restaurant. Apart from that however, it included no analysis at all regarding the value of OT from a customer's perspective. (the value of OT to me as a customer is that I can make reservations any time day or night without the hassle of having to make a phone call. That is a big plus, but very different than the value to the restaurant.)

                                                        1. re: susancinsf
                                                          Robert Lauriston Nov 11, 2010 02:02 PM

                                                          Opentable has no advantage over less expensive or free reservation software as far as making reservations at any time.

                                                          1. re: Robert Lauriston
                                                            susancinsf Nov 11, 2010 02:10 PM

                                                            true enough, for the customer. If one can find and easily use that free software(the point has been made that some websites are hard to use, making the software they employ less valuable from the customer's perspective. and then there are those bugs in some packages...).

                                                            Some customers also apparently like the ability to choose that OT gives them, but for me personally, that is less important. I don't use OT as a tool to decide where to eat, generally. I decide where I want to eat and then, if they are on OT, use them to make a reservation. If not, and they don't have their own easy to use software, I will call. Some people apparently don't want to do that (not making judgments, just saying).

                                                            and, as I think I made clear, I can't comment on the value from the business side. I am not now and have never been in the business. Was only commenting on my reaction as a customer. (which hopefully, or at least in my dreams, makes me something more than a number).

                                                            1. re: susancinsf
                                                              Robert Lauriston Nov 11, 2010 02:19 PM

                                                              I think Guestbridge, which Incanto uses, is actually easier than Opentable. The UI has calendars for the current and next month, with clickable links for days for which reservations are available.

                                                              http://incanto.biz/information/book-o...

                                                              Moot point, since Guestbridge has been acquired by Opentable, and is no longer available.

                                                            2. re: Robert Lauriston
                                                              JasmineG Nov 12, 2010 08:43 AM

                                                              That's not true for me -- if any other free reservation site was as easy to use and well organized as OT, sure, but that's not the case. Open Table has a easy web interface, it's easy to select a few different options (a few possible neighborhoods and cuisine choices, for example) to compare against, it loads quickly, it emails you the details immediately, and has a fantastic iPhone app (and probably other mobile phone apps, I don't know) that makes it easy to find, modify, and cancel reservations on the go (or in a place where it's not easy to make a phone call, like a crowded train, etc.)

                                                              1. re: JasmineG
                                                                Robert Lauriston Nov 12, 2010 09:46 AM

                                                                If you know where you want to go, and the restaurant has a good reservation widget (even OT's), it's faster and easier to use that than to go through OT.

                                                                If you don't know where you want to go, then it doesn't matter how good the restaurant's reservation widget is.

                                                                1. re: Robert Lauriston
                                                                  JasmineG Nov 12, 2010 11:41 AM

                                                                  No restaurant has a better mobile site than the OT app, and even when it's non mobile, so many restaurant sites are so slow and buggy (I'm looking at you, restaurants that make me listen to music or sit through a flash animation before giving me a link to your reservations). Honestly, one reason why OT is so useful is because so many restaurant websites are so horrible. But yes, if you know where you want to go, OT is much less useful.

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