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(The New York Times)   With Priceline buying OpenTable and multiple restaurant reservation scalpers operating openly, the cutthroat business of reservations is increasingly driven by apps, not eateries. "We see reservations changing from a cost center to a revenue stream"   (nytimes.com) divider line 40
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944 clicks; posted to Business » on 14 Jun 2014 at 6:27 PM (23 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



40 Comments   (+0 »)
   
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2014-06-14 04:17:00 PM  
I was in Boston this week and wanted to eat at one of the nicer (but little) Italian places downtown. Logged onto Open Table for a 7:30 reservation, was informed that there were no available spots within 2 hours of my requested time. Odd, I thought, for a Wednesday night. So I did the unthinkable, picked up the phone, and called. The host seemed surprised to discover that they were fully booked. "We have lots of open tables," he said. "Just come down when you want." So we did, and we waited maybe 5 minutes when we got there for a table to be cleared and got a nice spot and had a great dinner. So, basically, fark Open Table.
 
2014-06-14 04:34:50 PM  
Pay for the opportunity to pay for a meal?  GFY.
 
2014-06-14 05:01:17 PM  
The same thing happened to me at Infinity Hall in CT.
 
2014-06-14 06:44:53 PM  
"It looks like this: four people, driving through the Lincoln Tunnel at 7:30 on Saturday night, deciding which of their three 8 o'clock reservations they are going to keep."

Then start charging 20 bucks to make a reservation, which goes to your bill when you eat.  If you don't show, no refunds.
 
ZAZ [TotalFark]
2014-06-14 07:15:30 PM  
the best seats at hot restaurants

I solved the problem by not eating at hot restaurants.
 
2014-06-14 07:16:07 PM  
Douchy hipsters who think technology is the answer to everything ruined another part of life? You don't say.
 
2014-06-14 07:29:15 PM  
"Restaurants want to attract good customers, and lots of them are people who don't want to sit on hold, or write an email or stand around outside a restaurant waiting to get in," he said. "They are used to getting what they want with two taps on their phone."

There's your problem, right there.
 
2014-06-14 08:06:54 PM  
This sounds like the social media equivalent of a shakedown.  "Entrepreneurs" (nice way of saying "money worshiping vulture without scruples") of these reservation companies are going to have a small army of offshore call center folks speed dialing restaurants to suck up all of their reservations.  Restaurants are offered two choices: go with the program and pre-reserve a pool of tables for these companies and get a cut, and the company no longer reserves via their call center; or don't go with the program and risk empty tables because nobody "buys" the speed dialed reservations. I could see a number of restaurants doing away with phone-in reservations entirely and require in-person reservations (ideally) and perhaps also allow a small pool of tables to be reserved by OpenTable.
 
2014-06-14 08:41:53 PM  

Pocket Ninja: I was in Boston this week and wanted to eat at one of the nicer (but little) Italian places downtown. Logged onto Open Table for a 7:30 reservation, was informed that there were no available spots within 2 hours of my requested time. Odd, I thought, for a Wednesday night. So I did the unthinkable, picked up the phone, and called. The host seemed surprised to discover that they were fully booked. "We have lots of open tables," he said. "Just come down when you want." So we did, and we waited maybe 5 minutes when we got there for a table to be cleared and got a nice spot and had a great dinner. So, basically, fark Open Table.


That's not how it works.  Restaurants don't have all their tables on OpenTable because they want to leave tables open for walks ins, special guests, or whoever is blowing one of the investors that week.  So basically the hostess is clueless.  Or blowing one of the investors and needed a job.
 
2014-06-14 08:48:27 PM  
Sounds like first class airline tickets. No you are not getting there faster and you pay more.
 
2014-06-14 09:00:02 PM  

ImpendingCynic: Douchy hipsters who think technology is the answer to everything ruined another part of life? You don't say.


Correct, scalpers and douchebag programmers never existed or worked together before hipsters.
 
2014-06-14 09:10:16 PM  
This is stealing bribes from matier des!
 
2014-06-14 09:18:58 PM  
I love open table. That is all
 
2014-06-14 09:48:52 PM  

wildcardjack: This is stealing bribes from matier des!


In Des Moines.
 
2014-06-14 10:00:25 PM  

ZAZ: the best seats at hot restaurants

I solved the problem by not eating at hot restaurants.


Yogi said it best - "Nobody goes there anymore.  It's too crowded."
 
2014-06-14 10:03:29 PM  

Satanic_Hamster: "It looks like this: four people, driving through the Lincoln Tunnel at 7:30 on Saturday night, deciding which of their three 8 o'clock reservations they are going to keep."

Then start charging 20 bucks to make a reservation, which goes to your bill when you eat.  If you don't show, no refunds.


There are restaurants here that do just that - you give your credit card info when you make a reservation. I don't blame them, I was in that business myself.

And I appreciate pocket ninja writing about Open Table, good to know.
 
2014-06-14 10:15:24 PM  
Oddly enough, using the phone function of my phone seems to always get me a reservation when I want it where I want it.  Never tried OpenTable, downloading an app, figuring out how to use it, and using it just seemed harder than actually calling the source of the evening vittles.
 
2014-06-14 11:55:17 PM  
Satanic_Hamster: It looks like this: four people, driving through the Lincoln Tunnel at 7:30 on Saturday night, deciding which of their three 8 o'clock reservations they are going to keep."

upload.wikimedia.org

"Veto. Bypass. I went to Alex Goes to Camp last week."
 
2014-06-15 12:21:35 AM  
If I have to go to that much trouble to reserve a table at your restaurant, then I won't be eating at it.

I go out to eat and enjoy myself...not to wait or hustle.
I have better things to do in life.


It's friggin' food...you'll be shiatting it out in 4 hours anyway.
 
2014-06-15 12:29:11 AM  

erik-k: ImpendingCynic: Douchy hipsters who think technology is the answer to everything ruined another part of life? You don't say.

Correct, scalpers and douchebag programmers never existed or worked together before hipsters.


Hipsters predate programmers by, like, a lot, man.
 
2014-06-15 12:45:49 AM  
Am I a simpleton for not wanting to eat at restaurants where I have to make a reservation?

Go in and sit down.  Pretty much the extent of my dinner planning.
 
2014-06-15 01:12:27 AM  

Hobo Jr.: Am I a simpleton for not wanting to eat at restaurants where I have to make a reservation?

Go in and sit down.  Pretty much the extent of my dinner planning.


Never ever?  Not even 1 anniversary/holiday in an entire decade? Probably. I can understand not wanting to do it every time though, or even just some of the time.  Most would be too poor for one thing, before we get to discussing simpleton or not a simpleton.  But it's worth it once in a blue moon.
 
2014-06-15 02:21:31 AM  

rogue49: If I have to go to that much trouble to reserve a table at your restaurant, then I won't be eating at it.

I go out to eat and enjoy myself...not to wait or hustle.
I have better things to do in life.


It's friggin' food...you'll be shiatting it out in 4 hours anyway.



If you are passing food that fast, you should see a doctor.
 
2014-06-15 02:36:47 AM  
Look, we're losing track of what's really important here. It doesn't matter whether OPEN was disrupting the restaurant reservations business or just got lucky. They went public in 2009 raising $60M at a $1.1B valuation, and got an exit within 10% of their peak valuation of about $3B that they reached back in 2011.

Their most recent guidance was at most $90M in EBITDA (or $30M if you actually follow the accounting rules, but GAAP isn't always a great metric) on less than $230M in revenue for the coming year. I don't care what business you're in, if you can sell out for more than 10x revenues, it no longer matters if your company succeeds or crashes and burns. Sell, take the money, and if it's more important to be the CEO or a founder or whatever than it is to actually make money, use the capital to start a new business. With blackjack and hookers. Or forget the business. Aaw, screw the whole thing.
 
2014-06-15 03:50:52 AM  

ZAZ: the best seats at hot restaurants

I solved the problem by not eating at hot restaurants.


I much prefer to eat at places with good A/C.
 
2014-06-15 04:51:23 AM  
PocketNinja/gingerjet: That's not how it works.  Restaurants don't have all their tables on OpenTable because they want to leave tables open for walks ins, special guests, or whoever is blowing one of the investors that week.

Restaurants can also choose block out certain time periods on OpenTable.  So that just means that the restaurant doesn't let you make OpenTable bookings in prime hours.
 
2014-06-15 06:07:15 AM  
I don't understand... Restaurants still take reservations? Where I live, pretty much every restaurant doesn't take them anymore because of douchebags that make the reservation then decide to go elsewhere. The best you can get is call-ahead seating, but if you're not there when your name is called, your seat goes poof.
 
2014-06-15 08:14:37 AM  
I stopped using Opentable a year or so ago. It was great initially because you could hop online and make a reservation then suddenly EVERY good restaurant was always booked. But as others mention you would either call or show up and the restaurants wouldn't be packed and you easily get a table.
 
2014-06-15 08:20:42 AM  

MithrandirBooga: I don't understand... Restaurants still take reservations? Where I live, pretty much every restaurant doesn't take them anymore because of douchebags that make the reservation then decide to go elsewhere. The best you can get is call-ahead seating, but if you're not there when your name is called, your seat goes poof.


Your seat is gone if you're not there at reservation time too. I don't see the difference, except for the places that charge you for being a reservation no-show.
 
2014-06-15 08:29:57 AM  

Satanic_Hamster: "It looks like this: four people, driving through the Lincoln Tunnel at 7:30 on Saturday night, deciding which of their three 8 o'clock reservations they are going to keep."

Then start charging 20 bucks to make a reservation, which goes to your bill when you eat.  If you don't show, no refunds.


That's all sorts of brilliant, right there.
 
kab
2014-06-15 09:18:04 AM  

TheHighlandHowler: Pay for the opportunity to pay for a meal?  GFY.


This x 1000.
 
2014-06-15 10:17:15 AM  
I prefer the porn adult meeting website / app better:  Open Snatch
 
2014-06-15 10:41:27 AM  

Twilight Farkle: Look, we're losing track of what's really important here. It doesn't matter whether OPEN was disrupting the restaurant reservations business or just got lucky. They went public in 2009 raising $60M at a $1.1B valuation, and got an exit within 10% of their peak valuation of about $3B that they reached back in 2011.

Their most recent guidance was at most $90M in EBITDA (or $30M if you actually follow the accounting rules, but GAAP isn't always a great metric) on less than $230M in revenue for the coming year. I don't care what business you're in, if you can sell out for more than 10x revenues, it no longer matters if your company succeeds or crashes and burns. Sell, take the money, and if it's more important to be the CEO or a founder or whatever than it is to actually make money, use the capital to start a new business. With blackjack and hookers. Or forget the business. Aaw, screw the whole thing.


+$60M in positive operating cash flow in 2013.

Priceline paid a lot, but we don't know who the other bidders were. Yelp is currently valued at 23 times sales, has just $40M more in revenue despite a much bigger user base, and is barely breaking even.
 
2014-06-15 10:58:27 AM  
TheHighlandHowler: Pay for the opportunity to pay for a meal?  GFY.


kab: This x 1000.


And then pay someone else's employee after you've already paid for your meal?

This + 15%
 
2014-06-15 12:24:25 PM  
We stopped in at our favorite (and very popular) restaurant at 7pm on a Saturday and was told there was a 45 minute wait.  Then the manager saw us and immediately gave us a table.  There's no substitute for being nice.
 
2014-06-15 03:00:49 PM  

Snotnose: Oddly enough, using the phone function of my phone seems to always get me a reservation when I want it where I want it.  Never tried OpenTable, downloading an app, figuring out how to use it, and using it just seemed harder than actually calling the source of the evening vittles.


I've used opentable and liked it, mainly as there isn't much in the way of inputs. Just time and number of people. I suppose if I wanted a special seat it wouldn't work.

On the flip side I went to the webpage of the local pizzeria and noticed they had online ordering. First off it was a third party that was slow. Secondly there's so many things to choose from with options it makes it a pain to use. So I iust picked up the phone and placed it within 1 minute of dailing. That's hard to compete with.
 
ZAZ [TotalFark]
2014-06-15 05:01:08 PM  
lelio

I wanted to order from a major pizza chain.(*) There was an online ordering system. So I went through the explanation of where I was and what I wanted. Typetypetypetypeclicktype no i don't want to upgrade to wings no I don't want this or that. Finally I got to the last page. I was presented with a five page contract including an arbitration clause, which I needed to agree to if I wanted to order a pizza online. So I used a phone instead.

(*) I was traveling and hungry. That's my excuse.
 
2014-06-15 10:06:43 PM  

Hobo Jr.: Am I a simpleton for not wanting to eat at restaurants where I have to make a reservation?

Go in and sit down.  Pretty much the extent of my dinner planning.


I see in your profile that you live in Alabama. I know that Alabama has some fine restaurants, and I am not in the slightest putting down Alabama. But when you live in the South, particularly away from the larger urban centers (Atlanta, Charlotte, etc), you think of restaurants that require reservations as being the really fancy, real silverware, once-a-decade type of place. I don't recall ever making a dinner reservation when I lived in South Carolina.

But in the large cities a reservation is quite normal, even if you don't expect the restaurant to be crowded. If there's a specific restaurant I want to eat at I almost always make a reservation just to avoid any hassles of waiting for a table if it's busy. If I'm going on vacation I can reserve a few places that others recommend so that I don't risk walking up at 8pm on a Friday and finding a crowd out the door. It's not that they're such fancy places that they require reservations, just that everything good is going to be packed on a Friday or Saturday night.
 
2014-06-16 12:59:58 AM  

MithrandirBooga: I don't understand... Restaurants still take reservations? Where I live, pretty much every restaurant doesn't take them anymore because of douchebags that make the reservation then decide to go elsewhere. The best you can get is call-ahead seating, but if you're not there when your name is called, your seat goes poof.


You must be doing all of your eating at casual dining places, and not the places where the vast majority of the entrees are over 20 bucks.
 
2014-06-16 03:46:16 AM  

lelio: Snotnose: Oddly enough, using the phone function of my phone seems to always get me a reservation when I want it where I want it.  Never tried OpenTable, downloading an app, figuring out how to use it, and using it just seemed harder than actually calling the source of the evening vittles.

I've used opentable and liked it, mainly as there isn't much in the way of inputs. Just time and number of people. I suppose if I wanted a special seat it wouldn't work.

On the flip side I went to the webpage of the local pizzeria and noticed they had online ordering. First off it was a third party that was slow. Secondly there's so many things to choose from with options it makes it a pain to use. So I iust picked up the phone and placed it within 1 minute of dailing. That's hard to compete with.


Funny, I like the food-ordering apps, as it's reduced to near-zero the chance that I'm going to get something other than what I ordered, or that my food will take 3 hours to show up.

/admittedly, I'm mostly ordering from Chinese/Mexican/Vietnamese/Thai places and the online ordering removes the language barrier.
 
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