A recent Dish column looked into online reservations' impact on Twin Cities restaurants. While many restaurants, especially those that are new, off the beaten path, or have many seats to fill, are benefiting from using the dominant online reservation system, Open Table, some were feeling beholden to a service didn't really meet their needs and took a huge bite out of their budgets.
Desta and Russell Klein, the owners of Meritage in St. Paul felt that Open Table wasn't aiding their restaurant enough to be worth its exorbitant cost, roughly $15,000 to $18,000 a year. They wanted to be able to offer their customers the ability to make online reservations, but they didn't really need Open Table's marketing services.
So a couple of weeks ago, Meritage dropped Open Table and switched to another reservation system...and a lot of other local restaurants may soon be following suit. Here's why:[jump]
Desta Klein says that after the Dish article came out, she talked to Cynthia Gerdes, co-owner of Hell's Kitchen, who had just received her monthly $3,000 Open Table bill and was fearing she would have to raise menu prices to cover the costs. The two looked into an online reservation service called Eveve, which is Open Table's primary competitor in Europe. "We were both kind of scared to leave Open Table," Klein says. "They have such a dominant market share. That's not a good position to be in."
Eveve still offers diners same-time reservations and confirmations, Klein says, but with the ability to customize the process in a way that better suited her restaurant's needs. (The system can be set to designate which seats should be filled first and factor in the restaurant's ability to push tables together for large groups, for example.)
Also, with Open Table, diners' contact information feeds into Open Table's database, which means customers on one restaurant's email list receive marketing information from Open Table, essentially encouraging them to visit competing restaurants. "Open Table forced to pay for marketing I didn't really want," Desta Klein says. "Some of it was directly working against me."
Best of all, Klein says, Eveve charges only a $200 per month flat fee. By contrast, Open Table charges a one-time installation fee of several hundred dollars (to cover setup and training for the Open Table computer terminal and software), plus, at minimum, a basic monthly fee of $199 and a per-cover charge of $1 for each person in the dining party on reservations booked through Open Table's website. Eveve requires no contract, no special equipment, and can be accessed through as many computers as the restaurant desires, so staff can even manage reservations from home.
Klein says that so far, the new system is working better, and has cut Meritage's online reservations expenses about 85 percent. Hell's Kitchen made the switch a week ago and says it has seen its numbers of online reservations hold steady. Open Table was very useful to the large, downtown Minneapolis, tourist-friendly spot--Hell's Kitchen was the system's second most top booked in the Twin Cities, and among the top 10 in the nation, Gerdes says. But while the restaurant may miss out on some of the exposure Open Table offered, Gerdes thinks the annual savings--they paid a whopping $32,000 last year--will be more beneficial to the business overall.
Interestingly, Klein says she's already received calls from several large local restaurant groups who are also interested in finding an alternative to Open Table. "We might be starting a mini revolution here," she says.