The OpenTable monopoly

Incanto owner Mark Pastore explains why his restaurant isn’t on Opentable. His analysis is that Opentable is too expensive and monopolistic to offer much in the way of value to restaurants.

The recurring themes were the opinion that OpenTable took home a disproportionate (relative to other vendors) chunk of the restaurants’ revenues each month and the feeling of being trapped in the service, it was too expensive to keep, but letting it go could be harmful. The GM of one very well known New York restaurant group, which spends thousands of dollars on OpenTable each month, put it to me this way, “OpenTable is out for itself, the worst business partner I have ever worked with in all my years in restaurants. If I could find a way to eliminate it from my restaurants I would.” Another high-profile, 3.5-star San Francisco restaurateur told me he feels held hostage by OpenTable. For the past several years, his payments to them have been substantially more than he has himself earned from 80-hour workweeks at his restaurant. But he believes that if he stops offering it, his customers will revolt and many would stop coming to his restaurant. So he keeps paying, but carries a grudge and wishes for something better.

Startup opportunity? (via @amandahesser)

• business
• food
• Mark Pastore
• OpenTable

NY Times on the rise of OpenTable,

NY Times on the rise of OpenTable, which wasn’t exactly an overnight success. To me, the thing that pushed OT over the edge toward acceptance wasn’t so much the public-facing business (let your customers make reservations online) but the software that the restaurants were provided to keep better track of their customers and their habits. It used to be a big deal that Four Seasons Hotels tracked the preferences of all their customers but now any restaurant with the OT system can easily do the same. “Doug Washington, a co-owner of Town Hall, said the notes were not just helpful, they are occasionally indispensable. Next to the name of one regular, who has a habit of bringing in women he is not married to, is an instruction to make sure the man’s wife has not booked a separate table for the same day.”

• business
• food
• NYC
• opentable
• restaurants