Is Our Addiction to OpenTable Hurting Restaurants?

By Anthony Todd in Food on Oct 20, 2010 3:20PM

OpenTable.jpg I have been an avid user of OpenTable.com for many years. Free online reservations? Bonus points? Best-of lists? Sign me up. It has gotten to the point where, even if I'm going out for dinner on a Tuesday night at 5p.m. and I know the restaurant will be empty, I make a reservation, just to be sure I get the points. I know I'm not the only one out there like this; Hello, my name is Anthony, and I'm addicted to OpenTable. When I'm looking for a new place to go, and I feel lazy, I just type the date into their system and see what's available.

It's possible that I have been doing a lot of damage to my favorite restaurants without realizing it. Restaurateurs writing for InsideScoopSF, a San Francisco food rag, detailed all the reasons that their restaurant has refused to use OpenTable. Did you ever wonder why some popular restaurants aren't on the site? According to Chris Cosetino and Mark Pastore, the average charge to the restaurant for a 4-person reservation is $10.40. Yes, you heard right. Opentable remains free to you, and offers all those neat features, by charging restaurants high fees. They quoted one owner as saying that, "OpenTable is out for itself, the worst business partner I have ever worked with in all my years in restaurants."

These days, being on OpenTable can be a big part of a restaurant's success. The company is valued at 1.5 billion dollars, and the convenience of their system has led many restaurants to feel that OpenTable is indispensable. But, consider the cost.

Many restaurants (assuming they are profitable at all) operate on a 5% profit margin. Last night I went out to a lovely dinner in River North. I spent around $60, and had made a reservation on OpenTable. My dinner made the restaurant approximately $3 in profit, and it may have cost them significantly more than that to honor my online reservation. But restaurants are scared to pull out, because diners will have a harder time finding them online. Let's not even consider the fact that I also used a groupon - It's kind of amazing they didn't attack me. It's even worse if you had planned on visiting the restaurant anyway without a reservation. In exchange for your 100 bonus points, you just handed OpenTable the restaurant's entire profit from your meal.

It's also worth noting that a patron can often get better seats by not using OpenTable. Many restaurants hold back a significant portion of their tables for patrons who either call or drop-in in person. I can't count the number of times I have looked at a restaurant online, and the only tables available were at 5 and 10:15, and with a simple phone call I secured a 7:30 reservation.

Bottom line? I don't think you should stop using OpenTable, because convenience is an important factor when dining out. However, consider just giving your favorite restaurants a call. If you plan on becoming a regular, and want a restaurant to remain profitable (and you like building a good relationship) pick up the phone and get that 7:30 table.