Reservations please

Open Table's online service convenient for diners but pricey for restaurants

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Here's something you may not know about Open Table, the predominant online restaurant reservations system: When you book a table through the Open Table website, the restaurant is charged $1 per seated guest — so if you show up as a foursome, that's $4 off the restaurant's bottom line.

When you go to the restaurant's website and it directs you to the Open Table system to place the reservation, the restaurant gets charged 25 cents per seated guest — so a four-top adds up to $1.

And if you call the restaurant and make the reservation human voice-to-human voice, that costs the restaurant nothing.

So — big surprise — restaurants would love it if you'd call them for reservations, even as an ever-increasing number of them pay Open Table for each online reservation plus equipment installation and a monthly "subscription" fee to help them manage their reservations and fill seats. After all, restaurants operate on tight margins, so those expenses will be reflected in the prices.

"Theoretically you pass along everything," Yusho chef-owner Matthias Merges said.

Yet the convenience of Open Table has made this trade-off attractive to an ever-increasing number of diners and restaurants. Ann Shepherd, senior vice president of marketing for the San Francisco-based company, said about 540 Chicago restaurants and more than 800 in the metropolitan area are Open Table clients.

Throughout North America, Open Table reports, more than 26,000 restaurants subscribe to the service, compared with about 17,000 by the end of last year, and it seats about 10million guests each month. Shepherd said 2011 figures show that about 44 percent of North American restaurants that take reservations are signed onto Open Table, and about 12percent of diners seated with reservations at any North American restaurants made those arrangements through Open Table, which had total revenues of $139.5 million in 2011 compared with $99 million in 2010.

"They've done a great job capturing and pretty much owning the market," said Kimberly Phillips, director of operations at One Off Hospitality, which uses Open Table at Blackbird and the Publican.

What the company offers sounds basic yet wasn't commonly available before Chuck Templeton, then a product marketing engineer for a San Francisco technology company, launched it in 1998 as a way to simplify the reservations process. Back then most restaurants took requests over the phone, recorded the reservations in a booklet and jotted down any notes.

Open Table created the Electronic Reservation Book through which a restaurant could manage its bookings, assign tables and maintain a database of notes about that night's reservation (i.e., the guests are celebrating an anniversary) as well as, for future reference, the diners themselves (i.e., Mrs. McGillicutty is lactose intolerant and likes to be seated near the restrooms). It also built up a network of restaurants that could be searched on the Open Table site for availability at a certain time, so if you're visiting Chicago and want to know where you might eat on Saturday at 7:30 p.m., a quick visit to opentable.com lays out many options, with diner reviews attached.

Scott Barton, vice president and managing partner for fine dining at the Lettuce Entertain You restaurant chain, said Tru signed on to Open Table early on, in 1999, when its reservations books were separated by month, so if more than one caller was inquiring about, say, December, someone would have to wait or get a call back.

He praised the ease of coordinating the bookings and added that "the information you can store about guest likes and dislikes and previous experiences is very helpful and improves the guest experience."

Now Lettuce Entertain You uses Open Table at most of its reservations-accepting restaurants. At Tru a computer runs the Open Table software in a closet off the entrance, and an Open Table touch-screen computer and a few more Open Table-equipped PCs are in upstairs offices. Many other restaurants place Open Table touch-screens at the host stand so the dining room can be managed from there.

The basic subscription price for one Open Table touch-screen computer is $199 per month, Shepherd said. As with cable companies, there are also an initial installation and equipment fee starting at $200, additional charges for other computers running the software or additional services such as Open Table Anywhere (which allows the restaurateur access to the Electronic Reservations Book from a remote site) plus the costs of the reservations themselves.

"Open Table, while it is an amazing, incredible product, is a very expensive product to utilize," said Phillips, who reported that the monthly Open Table bill for the Publican alone is $3,400-$3,800. "You know what you're paying for, and you know what to expect, but every time I open (the bill), I'm like"— she made a gasping noise.

Sarah Stegner, co-chef/co-owner of Prairie Grass Cafe in Northbrook agreed that the Open Table service is worthwhile but pricey.

"Our average check isn't very high, so a dollar (per diner) is a big chunk," she said. "The whole system's really well thought out. It's just the expense of it is really high."

"It's insanely high," said Homaro Cantu, chef-owner of Moto and iNG, both of which use Open Table, though Cantu said he's trying to develop an alternate system that can operate on iPads instead of the PCs he has solely for Open Table. (Open Table doesn't run on Macs, though there's now an iPad application.) "Really they're the only kid on the block, and they need some competition."

Those expenses are the reason Merges opted not to use Open Table for Yusho.

"It's definitely expensive, which for a small restaurant is very difficult to cope with," Merges said. "I was looking for alternatives that would be less impactful on the restaurant economically."

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