A Comprehensive Perspective Of The Opentable Business Model

Introduction

So, for those who are planning to open a restaurant and want to engage rapidly with their patrons, TRooTech, a leading custom software development, and mobile app development company has brought an open and transparent discussion on OpenTable, an online restaurant reservation platform that has become an influential name in the hospitality industry.

OpenTable began its journey 25 years ago in July 1998 and over the years, it has evolved as a pivotal player in facilitating millions of restaurant reservations worldwide. It has brought a change in how diners dine at eating establishments. The following article will dive deeper into the core aspects of its business model, exploring the intricacies of its operations, and evaluating its impact on the restaurant ecosystem.

The article will also uncover the backend mechanisms behind the reservation system, analyze its revenue model, and unpin the technology stack that allows it to function hassle-free. In this open discussion, our technical experts have also shed some light on how OpenTable benefits restaurants through enhanced bookings and providing valuable customer data insights.

We will also reveal the main challenges the application poses whether it is related to the subscription fee it imposes on restaurants or the competition it receives from its alternative apps. So, let’s embark on our journey to understand the nuance of its role in transforming the restaurant industry. 

Understanding the OpenTable Business Model

The OpenTable business model has been extensively researched, analyzed, and reviewed by our top business executives and leaders. They have shared their insights and findings, which will help you to build a similar app like OpenTable. One of our top business leaders finds the business model to be quite simple, connecting people looking for a place to eat with the restaurants that want customers and further allowing online reservations directly from the restaurant’s website.

However, he felt that we should walk the extra mile and offer something unique to our clients when they approached us to develop a similar app. He said it’s time to deliver more in a way that compliments the platform.

One of our senior business executives talks about the current business model of the OpenTable application by focusing on the following vital aspects. 

Reservation System 

One of OpenTable’s core aspects that gain user attention is its user-friendly and seamless reservation system. It allows diners to navigate through multiple options and check their real-time availability to secure the table at the preferred time and date. The application mitigates all traditional practices, such as booking tables through phone calls to provide a much more convenient, efficient, and instant booking process. 

User-Friendly Platform  

Our business executive feels that OpenTable was able to write its success story due to its accessible, interactive, and intuitive platform. Whether you are booking through the website or the mobile app, you get the same seamless experience and interface to explore various restaurants, review their reviews, and make reservations. It leads to positive customer reviews, encouraging repeat business. 

Revenue Model  

Our research team found that OpenTable’s revenue model is multifaceted. It means that the restaurants have to pay a per-diner fee based on the number of reservations made via the platform. Also, there are subscription models available for restaurants with enhanced features and advanced analytics. It also allows restaurants to advertise and promote their services through the application, charging a certain amount to boost their visibility.

Technological Infrastructure  

OpenTable receives strength and robustness from its technological infrastructure. The restaurant booking app can seamlessly integrate with other restaurant management systems and hospitality software solutions, ensuring streamlined operations and establishments. The software includes features, such as table management, waitlist functionalities, and more to improve overall operational efficiency. 

Real-Time Insights  

Our expert executives view that OpenTable gathers and analyzes large data volumes in real-time to offer valuable insights to restaurants and the application itself. Restaurants can unleash this data to understand customer preferences and behavior and customize their offerings. Conversely, the application utilizes this data to identify the latest trends, improve its services, and provide more accurate recommendations. 

Global Presence   

OpenTable claims that it connects worldwide restaurants with diners in more than 80 countries, making it one of the leading and most reliable restaurant reservation service providers. The global presence broadens the application’s user base and offers restaurants the opportunity to attract diverse customers. The system is also adaptable, scalable, and flexible, catering to a broad spectrum of dining preferences. 

Mobile Integration  

With mobile application usage gaining pace, OpenTable is available as a mobile application. You can download it from the Google Play Store and Apple Store to make table bookings on the go, with just a few taps on the screen.

Overall we can say that OpenTable represents a business model that has become a testament to digital transformation in the hospitality industry, providing a user-centric platform that benefits diners, restaurants, and app owners. 

OpenTable Business Revenue Model

While discussing OpenTable’s business model, it becomes imperative to also highlight and focus on its revenue model, which informs us how OpenTable makes money. For any business planning to launch a new app or an online platform, establishing its revenue model is quite crucial. You can implement the same app monetization strategy or create something different based on this pattern.

Let’s hear it from our business development manager as he explains the pivotal elements of  OpenTable's revenue model. According to him, the restaurant booking software implements multiple revenue models, aiming to provide value-added services to its customers. These include 

Pre-Diner Reservation Fees 

The pre-diner reservation fees are one of the primary sources of income for OpenTable and the application charges from each of the restaurants are based on reservations made through the platform. Restaurants have to pay a predetermined amount for every diner seated through the OpenTable app. It is a transactional structure-based model that generates revenue for the utilization of its services made by restaurants. 

Subscription-Based Model  

The OpenTable revenue generation model also includes subscription services to restaurants wherein they can get access to more advanced features and analytics, apart from booking the tables. The enhanced and additional features include customer relationship management tools, a table management system, detailed analytics, and reporting solutions. The subscription model is a tiered approach, catering to specific restaurant requirements and allowing them to select services that align with their business goals. 

Promotion and Advertising 

Our business executive also found that restaurants can increase their online presence and visibility by choosing OpenTable’s promotion and advertising services. They have to pay for such ad placements, targeted advertising, and featured listing, which helps to attract more customers. This is a viable advertising strategy through which restaurants can create a much larger base. 

Premium Placement and Featured Reservations 

With OpenTable, restaurants also receive the option of securing premium placement or featured reservations, which helps them attain the peak position in the search results. This is also a part of the apps’ promotional strategy where restaurants have to pay additional charges for increasing their visibility and attracting more diners.

Data Insights and Analytics Services 

OpenTable’s monetization policy includes leveraging vast data sources by offering real-time analytics and insights. This is a chargeable feature used by restaurants that wish to analyze diner count, behavioral preferences, and the latest industry trends. It allows restaurants to make informed decisions and optimize their processes to augment the dining experience. 

Technological Solutions 

OpenTable provides advanced technological solutions besides the reservation systems. This includes tools for table management, guest communication, and integration with other restaurant management systems. It generates revenue by selling these additional software solutions and providing comprehensive technical support. 
 

OpenTable: Pricing and Plans

We thoroughly explored the various pricing and plans of OpenTable and found that the restaurant reservation app offers three types of pricing models. These are Basic, Core, and Pro.

The Basic Plan starts from $149 per month, the Core Plan is priced at $299 per month, whereas for the Pro Plan, the restaurant has to pay $499 per month. It is essential to note that the Basic Plan is Free for 30 days, whereas the other two plans do not offer any free editions. 
 

OpenTable Technology Solutions

Now it was the turn for our software developers and technology experts to evaluate what technology solutions and infrastructure OpenTable offers benefiting restaurants in the process. While exploring their technology blog section, we found that they have prepared a great recipe by adding the flavors of data science and spicing it up with product engineering and designing solutions.

Also, while exploring the OpenTable website, they came across a blog, which has provided a complete list of technology and software solutions used in the OpenTable app. We thought to share this information with our readers.

1. Online Reservation System- OpenTable allows its users and customers to book online tables anytime using their smartphones, tablets, and desktops, without having to be physically present at the restaurant or calling the staff. 
2. Restaurant Floor Plan Management - A software that helps restaurants to have ample space for placing the tables and chairs, providing a viable and warm ambiance to guests, clear avenues for fast and easy navigation, and making the best use of empty spaces. 
3. CRM Software - OpenTable has integrated a CRM system, enabling it to connect with all customers as it has a rich database of all past guests who have visited the restaurant. Restaurants can directly send targeted and personalized messages to those customers. 
4. Table Management Software - OpenTable's table management software allows restaurants to manage and monetize dining experiences. It helps optimize bookings, improve seating flow, and adapt to changing real-world surprises.
5. Digital Waitlist - Eliminate the waiting times for your customers to improve their experience by notifying them when their table is ready. It provides a much quicker turnaround time when guests enter the restaurant and get seated at their reserved table. 
6. Menu Engineering  - Many restaurants have now integrated menu engineering into their recipe book which enables them to earn more profit by analyzing sales data, food cost, and customer preferences to make informed decisions. It also includes designing the UI/UX of menu cards and pricing lists of recipes. 
7. Cashless Payment System - Nowadays, restaurants are implementing a cashless or contactless payment system where customers can pay digitally by scanning QR codes through their devices. They don’t need to carry physical cash or a card to pay their bills. 
8. Restaurant PoS Software - If you wish to connect all your restaurant activities in one place, such as table management, menu management, digital ordering, reporting and analytics, staff management, payments, kitchen display, marketing, customer loyalty, etc. you can invest in restaurant Point of Sale software. 
9. Customer Feedback Solution - With OpenTable’s customer feedback system, you can get customer reviews and feedback about their dining experience at the restaurant. This tool helps to improve your restaurant operations and food quality to enhance customer satisfaction. 
10. Staff Management Tool - With OpenTable, you can efficiently manage all your restaurant staff, including managers, chefs, and waiters using a digital scheduler that informs staff about their shifts. You can track the performance of your staff, whereas the payroll tool manages their salaries. It also has hiring software that allows you to recruit new employees. 

The Main Challenges of the OpenTable Business Model

From our observation, OpenTable is one of the most successful restaurant booking software that has revolutionized the online reservation system. However, it is facing a few inherent challenges during the current scenario. We are here to discuss a few of these challenges. 

1. Competition From Alternative Restaurant Booking Applications - It has been almost more than two decades since OpenTable made its inception. However, with technology progressing at a rapid pace and mobile applications gaining ample spotlight, many new players have now emerged in the market, giving tough competition to OpenTable. 
2. High Pricing Model - One of the core concerns for OpenTable is its high pricing model, due to which is losing the battle to some extent. It charges restaurants on a per-guest basis and some restaurants find it pricey. The starting price is $149 per month with a 30-day free trial period, whereas the other two plans do not offer any freemium editions. 
3. Updating Technology - From what our experts have seen and researched this restaurant reservation system, OpenTable needs to upgrade its technology solutions to a certain extent. Many features like a digital menu, cashless payment, etc. are missing from its card. It also has to improve its user interface and mobile app support to provide a better dining experience. 
4. False Reservations - We came across one instance where OpenTable had encountered a false reservation made by one of its employees. It harmed the app. Hence, it must implement strong and viable measures to prevent such incidents, maintaining the privacy of diners and restaurants. 
5. Dependence on Restaurant Partners - We discovered one weak steak of OpenTable that it depends heavily on a large number of restaurant partners to achieve success. So if restaurants walk out of this reservation system and choose its competitor app, it directly impacts its revenue generation. 

Let’s Conclude

OpenTable entered the market with an innovative and revolutionary concept to introduce a restaurant reservation system that allowed people to book tables from anywhere anytime. It brought a novel business model that seamlessly connects restaurants with diners and significantly focused on enhancing the dining experience of customers and establishments. However, today OpenTable has to counter tough competition from Toast, SevenRooms, Yelp, Resy, and more. Despite such a stiff battle, OpenTable still leads the market with a share of 29.93%.

Also, we are witnessing that the market value of the restaurant reservation system is estimated to be around $615.2 million by 2031 at a CAGR of 7.9%. These numbers are certainly encouraging for all those planning to build a restaurant booking application and look forward to creating a sustainable revenue generation opportunity.

So, your next step is to get in touch with one of our app development consultants and provide him with a rough about your dream application.