In 1998, Chuck Templeton, a former US Army Ranger, came up with the idea of creating his own restaurant booking service after observing his wife’s futile attempts to make a dinner reservation in San Francisco by phone. He called the service OpenTable, and it became the online restaurant reservation company that turned the food service industry in the US upside down.
Since its inception, OpenTable has had market dominance, which has guaranteed the company’s growth. From 2009 to 2014, OpenTable acquired eight potential rivals, and in July 2014, OpenTable itself was bought by the Priceline Group – an online travel giant whose other brands include Booking.com, Priceline.com, agoda.com, and Kayak – for $2.6 billion. Today, having extended its service to 20 countries including the UK, Australia, and Japan, OpenTable still holds the leading position in the restaurant reservation sector by market share.
However, with the growth of the mobile app market – which has triggered the creation of numerous restaurant reservation apps and systems – OpenTable has started losing its monopoly status despite being the first to cross the digital frontier. Some of OpenTable’s newly founded competitors include:
Bookatable, a restaurant reservation company from London
Quandoo, a Berlin-based restaurant reservation app
La Fourchette, a Parisian platform for location-based restaurant booking
SeatMe by Yelp, a San Francisco-based restaurant app developer
Reserve, another San Francisco-based restaurant app focused on high-end establishments and led by an Uber co-founder
Resy, a New York-based booking software app that offers paid last-minute reservations
TableUp, which offers waitlists on restaurant’s website, application, Facebook widgets, and other places
Read on to see what technologies you’ll need when developing a reservation service app. You’ll also discover how OpenTable makes money from reservations and subscriptions.
How does OpenTable benefit diners and restaurants?
The advantages for diners are obvious: they can quickly find a good place to eat, choosing from over 46,000 restaurants. Just imagine: OpenTable seats 23 million diners a month! More and more restaurants are partnering with OpenTable because it gives them a great opportunity for promoting themselves to over 25 million users.
OpenTable also allows other websites – such as restaurant directories, food blogs, and movie venue sites – to earn revenue from their visitors by participating in the OpenTable affiliate program. Affiliates obtain access to the FTP site with North American and UK restaurant addresses and restaurant IDs in order to implement referral links. For restaurants, this means even more promotion.
The world’s leading reservation platform employs different channels to connect diners with restaurants, including a website and the OpenTable: Restaurants Near Me app for iOS (for iPhones or iPads) and Android (smartphones and tablets as well).
According to a report by OpenTable, in the third quarter of 2018, the company seated more than 755 million diners worldwide through its mobile solutions. This represents more than $30 billion in revenue for restaurants. Developing an app like OpenTable can be a profitable initiative for both restaurants and app owners.
We’re not here to talk about the business side of the product, though, but rather to discuss the technology stack for OpenTable-like application development. Let’s focus on the most important functionality that the OpenTable app provides for diners and restaurants.
OpenTable for diners
Location-based search, booking history, and user-generated reviews are the features that a reservation application like OpenTable should use to help OpenTable customers discover restaurants. Let’s take a close look at these top features and others that may come in handy for your restaurant app.
To start discovering restaurants in the local area, users should be able to quickly register using an email address, phone number, or Facebook or Google account. Also, it’s a good idea to allow users to fill out a profile with dining preferences, including location and cuisine. This will help your app give relevant suggestions for nearby restaurants.
Advanced search with suggestions, filters, and ratings
After filling out their profile and enabling location tracking, users see a list of suggested restaurants. This list shows the number of restaurants in the area, their ratings from other users, and available reservation times.
[List of suggested restaurants for OpenTable users]
Users can search for a specific place or within a city or neighborhood, and can filter suggestions by location, cuisine, rating, etc. To make a reservation, users have to choose the time and number of people in their party.
Other than a restaurant’s location, ratings, and menu, the app provides other information such as its phone number, prices, hours, payment options, parking availability, and a short description.
To offer choice for users, the app needs a regularly updated database of restaurants. OpenTable has solved this problem by offering restaurants software for managing online reservations. Any restaurant using this software is added to OpenTable’s site and apps, and data on available tables is updated in real time.
Diners can select seats based on their preferences: outside, bar, or standard seating. Moreover, users can filter restaurants by seating options, which is also quite convenient.
[Seating options on OpenTable]
Detailed history of bookings
Apart from restaurant search, users can see their history of reservations. This provides users with quick access to places they’ve visited and may come in handy if a user forgets the name of a restaurant they liked.
Ninety-four percent of diners rely on reviews when choosing restaurants. OpenTable users can share their dining experiences and review restaurants on the website and the mobile app by leaving comments and rating a restaurant’s food, ambiance, and service from 1 to 5. Unlike Yelp, OpenTable doesn’t let just anybody post a review. You have to be confirmed as having been seated at the restaurant you wish to tell the world about.
On the one hand, user-generated reviews contribute to a positive user experience and serve as effective bait for new customers. On the other hand, some reviews may harm a restaurant’s reputation, including reviews that aren’t necessarily truthful.
Online payment system
The world’s biggest booking app offers a Pay with OpenTable feature, which allows iOS and Android users to pay using the OpenTable app. Diners can either add a credit card to the OpenTable app or can use Apple Pay or Google Pay.
We’ve already written about Stripe and Braintree, the most popular payment systems. It isn’t a surprise that OpenTable chose them to handle their mobile payments. Partnership with Braintree allows OpenTable to securely process payments that go through the app, and Stripe helps restaurants get paid by OpenTable.
Apple Watch app
In 2015, OpenTable released an app for Apple Watch, following the hottest trend. This app reminds users about their upcoming reservations. It also notifies users if they can pay using Apple Pay or Google Pay once they’re in a chosen restaurant.
OpenTable for restaurants
Surprisingly, OpenTable’s main client isn’t diners; it’s restaurants, since this is where the revenue comes from. Let’s see what restaurants get when working with OpenTable.
Registration for businesses is quite simple, as restaurants can either fill out a form or opt in by phone. But before they start operating on the platform, restaurant owners have to pass a verification process that’s normally done over the phone.
Once registered and verified, restaurant owners get a personal account page called Restaurant Center. This is where they can add their menu, contact details, hours of service, pricing, pictures, and a description of their cuisine. Restaurant managers can also view user reviews along with statistics and reports on restaurant performance.
Restaurants can also promote themselves using the OpenTable solution called Seasonal and Ongoing Promos. Here, businesses can create search ads for a special occasion and provide special offers that will get posted on OpenTable’s promo page.
Guest management software
Businesses can only operate on OpenTable using special Connect or GuestCenter apps. With Connect, restaurants can manage online reservations, cancellations, no-shows, seating, and wait staff assignments. Connect also stores information on customers, tracks their activities, and allows restaurants to run email campaigns. Additionally, this software:
provides a registration widget that restaurants can post on their website or Facebook Page to create a restaurant reservation
offers the ability to track and accept reservations from any website or page
sends automatic reservation confirmations via email
GuestCenter is a more advanced software package, offering more functionality for businesses. Aside from the features we’ve already mentioned, it can:
manage floor plans
create shift reports for restaurant employees
create profiles of restaurant guests for marketing purposes
view, filter, and export data on reservations
[GuestCenter iOS app]
Point of sale integrations
OpenTable’s GuestCenter offers a number of PoS integrations with Aloha, Toast, Olimpos, and other services. Apart from receiving payments and updating information about revenue, it can compare the performance of all points of sale and marketing channels.
Using PoS integrations is also quite comfortable for users, as they get an easy way to pay on their smartphones using the OpenTable mobile app without having to wait for the bill.
What marketing tricks does OpenTable use to hook users?
To engage more users and drive more sales, OpenTable uses a Dining Rewards program, which is a system of loyalty points. Users get 100 points for each reservation. They also get an additional 1,000 points or a chance to get a special off-peak table if a restaurant participates in the pay-for-performance marketing program.
Read also: Gamification Dynamics in App Development
Once users collect 2,000 points, they can convert them into a Dining Rewards Gift, which is sent via email. Users can print out this gift card or simply show it on their phone at a restaurant. Users can also purchase gift cards on the OpenTable website or redeem their loyalty points by converting them into $20 Dining Cheques that can be used at any OpenTable partner restaurant. The value of Dining Cheques varies depending on the currency. Participating restaurants submit customers’ Dining Cheques directly to the OpenTable app to get refunds.
How does OpenTable make money?
Remember that OpenTable’s main clients aren’t diners but restaurants? That’s why services for diners are absolutely free. Reservation fees and subscriptions (charged to restaurants) bring the most money to OpenTable.
OpenTable charges $1 per reservation made on the OpenTable website or app. For reservations via the widget, OpenTable charges $0.25. The only situation when restaurants don’t pay anything to OpenTable is when a reservation is made by phone.
OpenTable provides paid restaurant management software and access to their database on a subscription basis to help big chains and small restaurants alike attract patrons. Big restaurants pay a $199 monthly subscription plus $1 per reservation. OpenTable charges smaller establishments $50 a month, but the per-reservation fee is $2.50 instead of $1.
OpenTable has created a Directory API for acquiring and synchronizing restaurant data, allowing any affiliate to become an OpenTable partner. Once an affiliate integrates with the Directory API, diners can book restaurants right from the affiliate’s site or app.
According to the rules of OpenTable’s partner program, affiliates have to log over 100 seated reservations monthly before they get paid for attracting diners to the restaurant booking platform. This means that OpenTable gets new diners and revenue for free if an affiliate attracts 99 or fewer diners.
Should you create your own restaurant app?
Despite increasing interest in OpenTable, it's clones, or similar apps, not all restaurant owners approve of the system. Some don’t see the point in spending extra money setting up an online reservation system, especially if they already have a stable customer flow. Others would like to hold tables for special customers and not just anyone. There are also restaurants that prefer sticking to old-school pen-and-paper bookings.
What’s more, the cost of OpenTable’s services is high. Maybe instead of paying money to online reservation companies, it’s better to develop your own restaurant app? Momofuku, an international group of restaurants, uses OpenTable services alongside its own reservation system. Chicago-based Alinea is a restaurant that has recently introduced its own ticketing platform. This platform allows diners to make reservations by buying tickets to the restaurant or booking them for free. This unusual idea makes guests feel as if they’re attending a show rather than going out to eat.
We suggest that you take a closer look at the opportunity of growing your business without relying on any third parties. Besides, our developers can always help you create an app like OpenTable! And if you want to answer the question How much does OpenTable cost? and need qualified restaurant app developers, you can always drop us a message on our contact page.