Comments on: The value of OpenTable

By: jpdemers

jpdemers — Tue, 16 Nov 2010 22:07:57 +0000

That 5% figure probably averages in thousands of small diners and burger joints from coast to coast. I would bet my last dollar that more upscale urban restaurants (the sort that OpenTable serves) have considerably larger margins.

On a separate note, the software does need a lot of refining: log on and pick a restaurant, and then try to find the reviews!

By: y2kurtus

y2kurtus — Tue, 16 Nov 2010 16:09:27 +0000

“consider that the average profit margin, before taxes, for a U.S. restaurant is roughly 5%.” Mark Pastor is crazy to use that 5% figure when discussing open table because open table sales should in theory be mostly incremental. Like Captian Kirk says… unwise to let a perishable good (the table) go unsold.

Food is the only variable cost at a resturant… that gererally makes up a shockingly low 20% of total cost. On a filled table that was going to go unused the pre-tax Margin is 80%. Now that only holds true for tables that would otherwise been wasted… if they would have been sold to non-res diners who walk in and check the wait time then you have a problem.

That 5% profit figure is bogus to start with considering that privately held resturants (as a group) are among the biggest book cookers out there… it’s unfair to paint a vast industry with that brush… I’m sure there is a huge population of honest operators… but I can tell you from direct knowlage that there are pleanty that “pretty much break even” every year.

By: FAH

FAH — Tue, 16 Nov 2010 12:43:29 +0000

The irony is that Incanto now uses OpenTable!

(You can see for yourself: with FireFox, go to Incanto’s website, click “Book Online;” right-click on the shaded area that asks “Select Desired Date, Time and Party Size;” then click on This Frame -> View Frame Info. You will see the following link: http://res.guestbridge.com/r.asp?SiteID= 497. Guess who owns guestbridge.com?)

Restaurants *love to hate* OpenTable very much like corporate IT buyers love to hate Microsoft.

By: Curmudgeon

Curmudgeon — Tue, 16 Nov 2010 00:37:37 +0000

I don’t live in an area served by OpenTable, but I’ve used it when visiting cities such as Boston and SF on business. When you don’t know the city well, OpenTable is one stop shopping for getting together a diverse group of people, choosing a cuisine and restaurant, and ensuring that reservations (almost always same day) are available when you need them.

Not using OpenTable under such a scenario is simply inefficient.

By: MarkWolfinger

MarkWolfinger — Mon, 15 Nov 2010 23:19:30 +0000

I don’t get it. If you like the restaurant, why not make reservations directly with them and allow them to keep the profit?

It may make the difference of their being able to stay in business.