Questions and Answers
OpenTable was founded in 1998 by Chuck Templeton.
True
As of 2019, OpenTable has over 100,000 restaurants using its system.
False
OpenTable's revenue model includes a monthly fee of $249 plus a fee per guest seated.
True
The basic version of OpenTable, named OpenTable Connect, has a monthly fee of $2.50 per guest.
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OpenTable went public in 2009.
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OpenTable was acquired by Booking Holdings for $1.2 billion in 2014.
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OpenTable has faced challenges from competitors such as Resy and Yelp.
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58% of OpenTable's reservations were made via desktop devices by 2018.
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OpenTable automates the reservation process and helps restaurants build diner databases for enhanced guest recognition and targeted marketing.
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The cloud-based version of OpenTable is known as the Electronic Reservation Book (ERB).
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OpenTable’s primary source of revenue is based on advertisements targeted at diners.
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As of 2019, OpenTable reported that 31 million diners book reservations every month through its app and website.
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OpenTable initially thrived by being widely adopted across many restaurants in the industry.
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The basic version of OpenTable, OpenTable Connect, charges a monthly fee but has a lower transaction fee compared to the standard version.
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In 2018, a majority of reservations made on OpenTable were completed using mobile devices.
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OpenTable was acquired by Booking Holdings for $2.6 billion in 2014 to enhance Booking’s market share in the restaurant reservation sector.
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Study Notes
OpenTable Overview
- Founded in 1998 by Chuck Templeton, OpenTable is the top provider of restaurant reservation and guest management software.
- Nearly 60,000 restaurants worldwide utilize OpenTable's system as of 2019.
- Serves approximately 31 million diners booking reservations monthly through its platform.
Technology and Services
- Automates the reservation process and builds diner databases for improved guest recognition.
- Restaurants use the Electronic Reservation Book (ERB), a proprietary software on touch-screen systems that helps manage floor layouts and serves as a CRM tool.
- OpenTable also offers a cloud-based system called Guest Center, compatible with iOS, Android, and web browsers.
Revenue Model
- Primarily subscription-based, charging 249monthlyplus249 monthly plus 249monthlyplus1 per seated guest via online reservations.
- Offers OpenTable Connect, a basic version with no monthly fee but with a $2.50 transaction fee per guest.
- Online reservations are free for diners.
Market Challenges
- The restaurant industry was slow to adopt internet systems due to its fragmented structure.
- OpenTable initially faced challenges, operating at a loss, until it concentrated on major cities, refining its ERB system, which led to significant growth.
- By 2018, mobile devices accounted for 58% of all reservations made.
Expansion and Acquisition
- Went public in 2009 with a successful IPO despite economic challenges.
- Acquired by Booking Holdings in 2014 for $2.6 billion, aiming to enhance global expansion using Booking’s resources.
Competition and Adaptation
- Faces competition from Resy, Yelp, and TripAdvisor’s TheFork, which offer lower costs and additional features.
- To stay competitive, OpenTable continuously upgrades its platform with analytics, integrations, and improved user interface.
- The COVID-19 pandemic severely impacted the restaurant industry, with estimates suggesting 25% of U.S. restaurants may not survive and $240 billion lost in 2020.
Recovery and Future Outlook
- OpenTable responded to the pandemic by introducing features for grocery and bar reservations, reducing prices, and sharing safety information.
- Data from countries like Germany and Australia indicated a recovery pattern, and U.S. bookings are beginning to increase as the economy reopens.
- Booking Holdings is focused on integrating OpenTable with its travel platform to create a cohesive customer ecosystem.
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Description
Explore the journey of OpenTable from its foundation in 1998 to becoming a global leader in restaurant reservation and guest management software. Understand its role in automating the reservation process and enhancing diner experience. This quiz covers key facts about OpenTable's influence in the restaurant industry.
