The Pros and Cons of OpenTable

Joni Kat Anderson

Chicago’s Four Corners Tavern Group prides itself on offering high-quality burgers, pizzas, and craft beers. Both the menu and the service are elevated. But the group’s nine bars are casual neighborhood institutions, so there was never much need for a complex reservation system. That changed with Four Corners’ November 2013 launch of Trellis, a more formal wine bar concept. With Trellis, the company signed up with OpenTable, which matches millions of diners with thousands of restaurants via online and mobile reservations.

The thinking was simple: At a wine bar, people linger over a bottle of wine a little bit longer. Unlike at other neighborhood bars, diners might be less willing to wait for an available table. And an online booking system could help the back of house keep pace with the front. Aside from the logistical advantages, Open-Table was a great way to spread the word about the new concept.

“No one can compete with OpenTable’s reach, and no one can compete with its marketing,” says Four Corners director Ryan Indovina.

When it comes to marketing, OpenTable has a distinctive pitch: It shows exactly how many people a restaurant can seat on any given night, and the system allows restaurants to adjust how many seats it wants to open up. So if Tuesdays are slow, an operator could open up a few extra tables for online reservations. Purchased by Priceline for $2.6 billion in June, OpenTable has a network of 15 million monthly diners that is hard to ignore.

The company has also been busy eating up much of its competition, and the cost of using OpenTable means it’s a no-go for some restaurants. Alongside setup costs and monthly fees, OpenTable charges $1 per customer it seats. That can add up. Plus, Indovina says, there’s an association with being a reservation-heavy restaurant. That concerns him, as Trellis wants to maintain a neighborhood ambiance where customers feel free to drop in without reservations.

Thus, for all its advantages, Indovina says the jury is still out on OpenTable. “It has been a successful marketing tool to expose our brand to the market,” he says. “But we’re still determining the true ROI of it.”


Add new comment