Justin Brunson, chef-owner of Old Major in Lower Highland, took a big risk last year when he decided to end his relationship with OpenTable, the online reservations giant that serves about 27,000 restaurants in the United States. “I was scared to death no one would show up at the restaurant,” he said. “But people kept coming.”
Brunson saved about $2,200 a month after switching to Eveve, an independently owned online reservation system that charges him about $300 a month, compared with the $2,500 he paid for OpenTable.
“I’m a small independent guy,” he said, ” and I’d rather figure out how to keep more money instead of giving it all away to a large corporation.”
OpenTable, bought last year by Priceline for $2.6 billion, boasts more than 15 million seated diners per month. It’s one of the sponsors of Denver Restaurant Week, which started Friday, along with culinary stalwarts such as Johnson & Wales University and the Columbia Winery. Its website promotes Denver Restaurant Week, and its technology allows restaurants to maximize capacity during the 10-day crush with real-time updates, counting everything from the number of walk-ins to last-minute cancellations triggered by snowstorms.
But behind the scenes — as invisible as the wizardry of this technology — a drama is quietly playing out. In the past four months, five restaurants have left OpenTable for a new competitor in the market, following the lead of Old Major. This defection illuminates the frustrations that some restaurants have long experienced with OpenTable, grievances rarely experienced by restaurant diners.
It’s about money — who pays and how much.
Most consumers love OpenTable because they can make reservations anytime and it’s free. They also enjoy OpenTable’s rewards-points system, where diners who book at certain restaurants at certain times — usually low-peak hours — get 1,000 points.
Sylvia Atencio, a Denver-based stylist, is one of OpenTable’s biggest fans. Whenever friends mention getting together for dinner at a restaurant, she said, “I want to jump to it and make the reservation on OpenTable because I want those points.”
In her busy life, it’s also a time-saver. “We’re all going fast,” she said. “When I’m on the phone or e-mailing with a friend, before we’re done, I’ve already gotten the reservation online with OpenTable.”
She can’t imagine life without it. On the other hand, she said, “I never thought about who paid for it.”
Restaurants pay.
For many owners, those fees have long been a source of disgruntlement. They include a monthly fee of $249, and restaurants also pay OpenTable for diners. It’s 25 cents for each reservation booked on the restaurant’s website, and $1 for every reservation that comes from the OpenTable website.
Those small fees can add up. If a restaurant gets 1,000 diners a month who booked on OpenTable, that costs $1,000.
“I don’t want to say OpenTable is overpriced, but it’s very expensive for an independent owner,” said Andy Ganick, owner of the Berkshire in Stapleton, who saved about $400 a month by switching to Eveve. “The margins in restaurants are paper-thin.”
But OpenTable gives great value, said Tiffany Fox, the company’s senior director for corporate communications. They provide restaurants with technology to run their reservations systems, and OpenTable also has nearly 600 partners, including Bing, Facebook, Google, Zagat and TripAdvisor, that can help send diners to OpenTable.
“We provide a hospitality solution for restaurants to run the front of their house, and we drive diners into their restaurants,” Fox said.
Opting out
Still, despite these benefits, five restaurants left OpenTable for Eveve: Old Major, Charcoal, Curtis Club, Cedar Creek and Berkshire. And when Nocturne Jazz and Supper Club opens this month in RiNo, it will be using Eveve.
Co-owner Nicole Mattson considered using OpenTable, and observed the online-reservation industry for a long time, watching competitors like Urbanspoon’s Rezbook service being bought by OpenTable.
“I come from a hotel background and … Priceline is kind of a necessary evil in the hotel world, a marketing channel with last-minute options for selling a hotel room,” she said.
“I felt like OpenTable was the big gorilla in the room for restaurants and that they didn’t have a whole lot of competition.”
She considered two alternatives to OpenTable and chose Eveve because it has more of a presence in the U.S.
The company, based in Scotland, expanded to Denver after recent success in three test markets: 93 restaurants in Minnesota’s Twin Cities; 50 in Houston and Austin, Texas; and 20 restaurants in Seattle since the company started there in November. Eveve manages about 240 restaurants in the United States and 630 in other countries, most notably New Zealand, where it has about 300 restaurants.
“Restaurants in Denver have been very receptive,” said Timothy Ryan, CEO of Eveve. “For a lot of restaurants, especially those that are independent-minded, the big advantage is not having a broker between them and the diner.”
Ben Brecht, Eveve’s representative in Denver, is busy fielding calls from local restaurants.
“We’ve been inundated with inquiries,” he said. “OpenTable has been a virtual monopoly for some time, and there’s been frustration because of that.”
Part of the plan
For Gary Sumihiro, owner of Charcoal in the Golden Triangle, periodically re-evaluating the effectiveness of OpenTable was always part of the business plan.
“We used OpenTable for an introduction into the market,” he said. “They were a great partner when we opened.”
But the business evolved, and Charcoal — named one of the city’s best new restaurants when it opened in 2011 — now has a strong walk-in business and its own brand identity.
That’s one reason Eveve was attractive.
“They’re branding our restaurant, not OpenTable,” he said.
When a diner goes to Charcoal’s website to make a reservation, there is no OpenTable branding — it’s all about promoting Charcoal.
Sumihiro said he now saves about 75 percent of what he’d previously spent on OpenTable.
“I’ve gotten no negative feedback from customers who used OpenTable, especially when I say the money saved is going back into improving the quality of the restaurant,” he said.
Sales at Charcoal are about 25 percent higher than last year, he said. They’ve not lost reservations, and they’ve gained customers.
“Our website looks great; we got a ton of reservations on it,” he said. “I wish OpenTable well and may use them in future. But right now I’m happy.”
Over on South Pearl Street, two restaurants owned by the Kizaki brothers each took a different path when it comes to online reservations: Sushi Den switched to Eveve, but sister restaurant Izakaya Den did not.
“Izakaya Den still has OpenTable because it’s a bigger reservation restaurant, and OpenTable is still a great tool for us,” said director of operations Michael Yi. “Their marketing is great, and their database is so big that we’re able to capture some of those (diners). Sushi Den is different. It’s an institution, and we fill it just through walk-ins.”
Colleen O’Connor: 303-954-1083, coconnor@denverpost.com or twitter.com/coconnordp
