Several new applications offer promising alternatives to OpenTable for restaurant owners
It wasn’t that long ago that taking reservations at your restaurant demanded a staffer with great phone skills, excellent note-taking abilities, and the skills of a diplomat, but technology has changed all that, and restaurants – and diners – now enjoy the convenience of reserving a table online.
But, just like getting the most appropriate equipment for your kitchen and dining room is not always straightforward, choosing the right software for your establishment is not an easy task. Options abound, prices vary significantly and features are not always easy to compare. Competition among the companies offering this software is fierce, but you need to balance the needs of your restaurant with the costs and benefits associated with each.
The 800-pound gorilla
Most people know OpenTable, and it is certainly the behemoth of the category, with over 27,000 restaurants currently utilizing its technology.
Let’s start with the basics: cost. Restaurants pay a one-time installation fee, followed by monthly subscription fees of $199. The package includes hardware with touch-screen technology, running software that allows restaurants to not only manage and maintain reservations but assign tables, recognize repeat customers, and remember specific customer preferences.
For consumers, it’s as simple as going to opentable.com, finding the restaurant they want and booking a table at an available time. In a society that has become less and less enthused about person-to-person phone conversations, it could not be more simple and straightforward.
The service is free to consumers, and just being in the OpenTable system opens restaurants to more customers. Restaurants enjoy a running tally of which tables are booked and which tables remain open, and they can quickly fill tables following cancellations. Diners also like earning points every time they book, which they can use toward discounts on their bills at participating restaurants. (Restaurants may not love handing out discounts, but that's part of the cost of OpenTable exposure.)
The bottom line is that OpenTable is an efficient and user-friendly way to streamline and manage the reservation process that thousands of customers and restaurants utilize, but it also comes with some significant expenses that you'll need to manage.
There's – gulp – Yelp
Every restaurant owner knows the upside and the perils of Yelp. It does, however, attract significant traffic and, since buying former OpenTable competitor SeatMe, it's now making noise in the reservations arena.
Touted as the most affordable front-of-the-house system available, Yelp Reservations is a flat-fee alternative to OpenTable. There is no investment in hardware or software required and no long-term contract, and training staff is not difficult.
The flat-fee versus per-reservation commission structure is appealing to many establishments. It removes the potential for unexpected costs and offers features that are beneficial to anyone trying to manage a busy house. These features include wait-list management so you can slightly overbook to compensate for no-shows, reservation confirmation by text message, and access to data about customers and their preferences.
With its low cost of entry and its fixed costs, Yelp Reservations is an option worth considering for your establishment.
The exclusive upstart
One of the most notable newcomers, led by CEO Ben Leventhal and technology investor and VaynerMedia CEO Gary Vaynerchuk, is Resy.
In markets like New York City, where securing a table at a hot restaurant is a badge of honor, the Resy app is making real headway against OpenTable and, it believes, rewarding the best kitchens in a way that its competitor does not. While it has been largely focused on the New York City marketplace, a new round of investor funding will be used to expand into 20 additional markets.
While customers can sign up for Resy for free – a credit card is attached to the account, like Uber – not every reservation costs nothing. If it's a hot restaurant at a peak hour, customers may be expected to pay anywhere from two dollars to even $50 per person.
While some might see that as pay to play, it essentially rewards the restaurants with the most buzz and gives customers the option to have an experience they might not otherwise get – if they’re willing to pay for it. Want two seats at the bar at the hippest spot in the East Village? Well, they're available – for a price.
The idea of paying for something that is typically free doesn’t sit well with some – even celebrity chefs who could reap the rewards of the practice. While the restaurant partners of the app get a percentage of the fees paid by diners, some in the business find the practice unseemly. Of course, it’s not exactly a new practice – the maitre d’ at a great restaurant has long been known to be the recipient of a few bills pressed into the palm by a customer desperate for a table.
Resy brands itself as a "curated" experience, offering diners access to the hottest restaurants at prime time hours. If your restaurant falls into that category, it can be a great tool to add even more buzz and additional revenue through the percentage of fees that the app shares. But if you're not quite on the hot list, it may limit your exposure to potential customers.
A hybrid approach
Reserve promises customers that it will serve as a "digital concierge service" for its New York-based users. It touts its curated list of restaurants and handles the entire dining process, promising that even first-timers will be treated like regulars at the restaurant. It even takes the bill out of the equation, because payment information and tipping preferences are on file with Reserve. No bill is presented at the restaurant, and the charge simply appears on the customer’s Reserve statement, although Reserve tacks on a $5 flat fee to the diner’s account.
What is the upside for restaurants? Cost, for one. Unlike OpenTable, Reserve does not charge the establishment anything. Since guests request tables within a time window and restaurants are not required to hold a table, a measure of control is being returned to the managers of establishments.
Reserve also charges no-shows a relatively steep $10 to 25 and returns that money directly to the restaurant. More concierge service than reservation service, Reserve can be a good option for those who don’t like giving up too much control to an outside service and who believe customers will appreciate the options it offers.
Despite its vast coverage, OpenTable doesn't have the category to itself any longer. Upstarts seeking to improve on the OpenTable approach and drive down costs have emerged and are worthy of consideration.
The good news is that no matter which option you choose, technology and the internet have significantly improved the reservation process. In a business as challenging as the restaurant industry, this is certainly a positive development.
When determining which system to implement at your establishment, it is critical to analyze your restaurant honestly. Do you have exclusive, upmarket appeal? Are you a casual, drop-in place? Or are you a neighborhood spot with a steady flow of regulars? Your identity will help guide you to making the best decision on a table reservation system that will be an asset for your business.