OpenTable is no longer the invincible monopoly it once was. OpenTable, though they rarely publicize it, is now offering a parallel service to their traditional online restaurant service called OpenTable Connect. This service, which does away with start-up costs, monthly fees and contracts, gives restaurants a greater variety of options to handle the increased demand for online restaurant reservation.
OpenTable senses the threat from smaller competitors. Along with facing pressure from Urbanspoon to change, OpenTable must compete with Livebookings, a UK company, that has spent the last year making inroads in the U.S. online restaurant reservation market. This service, however, won’t necessarily quiet the complaints of restaurant owners. Many restaurants owners may wonder why OpenTable was essentially strong-arming them into buying equipment and charging high monthly fees if they could provide a cheaper service (especially for restaurants with less online reservations) that didn’t involve such expenditures.
Let’s get back OpenTable Connect, and see how it compares to the regular OpenTable service. First, we should go over the pricing. The old service involved buying equipment ($1295 installation fee) and a leasing fee with a 1 year contract ($200 per month). The charge for the old fee per diner was $1 through the OpenTable website and $.25 per diner through the OpenTable link on your restaurant’s website. With the prohibitive cost of the equipment and leasing fees, a restaurant owner (especially at a small restaurant) may wonder when they will break even. Before Connect came to the market, many didn’t feel the necessity of the OpenTable hardware, but they had to buy it anyway to benefit from OpenTable’s grip over the online reservation market.
OpenTable Connect, however, should appeal to many more restaurants (and many with regular service too) that haven’t got in the online restaurant market. Breaking from their previous business model, OpenTable Connect now has zero installation fees (no equipment), zero cancellation fees, zero monthly fees (which originally cost $49)–the charge is based solely on the number of diners that honor their reservation. With OpenTable Connect, those that use OpenTable’s website will cost the restaurant $2.50 per diner (which isn’t exactly generous), while it will remain unchanged ($.25 per diner) for reservations placed through the restaurant’s website. Instead of the old system, those who use OpenTable will eventually be able to manage their reservations in whatever way suits their needs, whether it is a computer, an iPhone or an iPad. Of course, you don’t receive OpenTable’s table management system (as you access your account through the internet), but then again, many don’t see the point of it in the first place. With this service, some of the restaurant owners who took the plunge into OpenTable before OpenTable Connect’s introduction might feel a little cheated.
Since more details are sure to follow about OpenTable Connect, we will keep you updated as this new service continues being rolled out.
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