Posted: Jul 11, 2017
The Alinea co-owner says thousands of restaurants are overpaying for OpenTable
Nick Kokonas, co-founder of hallowed Chicago restaurants Alinea and Next and founder of the online restaurant ticketing system Tock, has seemingly declared an all-out war against reigning reservations giant OpenTable.
In a new post on Medium, Kokonas claims there’s a high probability that restaurants using OpenTable’s reservations system are overpaying for the service. When diners book restaurants directly through OpenTable, the restaurants pay the reservations company a commission of $1 per guest. But if diners follow a link from, say, the restaurant’s own website to make their reservation, they’ll pay much less — only 25 cents a head.
The problem, Kokonas says, is that many restaurants — as many as 40 percent of those using OpenTable, he estimates — don’t realize that they need to use a special referral link in order to get that reduced rate. That important tidbit of information, he points out, is buried at the bottom of OpenTable service contracts in small print.
As the founder of Tock, a much smaller online ticketing system used by high-end restaurants such as Heston Blumenthal’s the Fat Duck, Napa’s Single Thread, and Paul Qui’s Otoko, Kokonas certainly has a vested interest in luring restaurants away from OpenTable. But Kokonas writes, “Even if you never switch to Tock, we want you to start saving money.”
Tock’s website now offers a tool that restaurants can use to analyze their own websites and check if they’re using the proper referral links. If news of this spreads far and wide to OpenTable’s restaurant clients, it could seemingly cost the reservations giant a significant wad of cash in lost referral dollars. That difference of 75 cents per head could potentially add up quickly when considering that tens of thousands of restaurants are using OpenTable on a daily basis. Kokonas writes:
OpenTable claims to have seated something on the order of 252,000,000 diners last year alone. It’s unclear how many of those booked digitally… but let’s be generous and say it’s only half. If 35% of bookings originate at a restaurant’s website, and 40% of those 31,000 restaurants are affected and are overpaying by $.75 per seated customer… well, it’s impossible for us to calculate the amount of money restaurant’s may be overpaying, but it’s on the order of millions and millions of dollars every year. For many, many years.
Kokonas’s estimate that 35 percent of bookings originate at a restaurant’s own website seems somewhat steep, though. Besides offering the ability to simply book a table, OpenTable also serves as a discovery tool that allows people to search by location, cuisine, price, and availability to find a restaurant that meets their criteria — ostensibly leading to many bookings by guests who hadn’t heard of a restaurant before visiting OpenTable. Behaviorally, it would seem, most diners’ instinct is not to go a restaurant’s website to make a reservation, but to go to a listing service first.
An email to OpenTable was not immediately returned.
By Whitney Filloon
July 10, 2017
Go-Wine's mission is to organize food and beverage information and make it universally accessible and beneficial. These are the benefits of sharing your article in Go-Wine.com