OpenTable, Inc.
Aug 8, 2007
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Fine dining a click away - Part II

Raleigh News & Observer

By Sue Stock

Continued from Part I

"It's sort of a star on your jacket kind of thing," said Kevin Jennings, who runs Raleigh's Urban Food Group with his wife, Stacey. The company is behind several local eateries including Frazier's, Porter's, Vivace and South.

The price to play

"Sometimes when you get a $400 or $500 bill from OpenTable, you wonder," Jennings said. "But their customers seem to be really loyal to them."

Still, for Jason Smith, owner and chef at Raleigh's 18 Seaboard, the $1 per-person fee is especially tough to swallow.

"The $1 is way out of my price point," he said. "If you get a delicious salmon salad and a sweet tea, OpenTable has made more money on that than 18 Seaboard."

Even so, Smith remains a member of the network for now. He said customers make 1,000 reservations a month, and 50 percent of his online reservations come through OpenTable.

"In the Raleigh market, it really makes a lot of sense because our clientele here is so tech-savvy," he said.

Benefits of belonging

The benefits of OpenTable are worth the price, said Ann Shepherd, OpenTable's senior director of consumer marketing.

Shepherd said that a third of the company's reservations are made during periods when restaurants aren't typically open for business and that a third of the site's users have made out-of-town reservations during the last year.

"The return on investment is very positive," she said. "It really doesn't take very many incremental diners to justify the cost."

If used properly, the OpenTable software can also help restaurants offer more personalized service.

At Herons, the restaurant in Cary's Umstead Hotel, employees enter data into the system such as customers' birthdays, anniversaries and food preferences.

"It can hold a lot of information, but it's also not complicated for us to teach our employees," said Bryn Rich, conference services manager for the hotel. "It's become helpful with guests with food allergies."

Almost mandatory

Signing up for OpenTable may soon become pretty much expected for restaurants, much like accepting credit card payments, said Darren Tristano, executive vice president for Chicago food industry research firm Technomic.

"You pay your 3 percent fee to the credit card company, and it's a cost of doing business," he said. "By not having your restaurant on this site, it puts you at a great disadvantage."

Tristano said the OpenTable site is the leader in the online reservation field, which will only continue to grow.

"To not have to pick up the phone and not have to know the number of the place you want to go and be able to look and see what's available -- that's what customers want," he said.