How Does OpenTable Make Money? A Comprehensive Guide

OpenTable makes money through a multifaceted approach, primarily by offering software solutions to restaurants and charging subscription fees. This comprehensive guide, brought to you by money-central.com, breaks down OpenTable’s revenue streams, business model, and strategies, offering clear insights into its financial operations. By providing value to both restaurants and diners, OpenTable has established a strong network effect and a reliable revenue stream, solidifying its position in the restaurant reservation industry. Discover how they leverage subscription models, reservation fees, and more to maintain profitability.

1. What Is OpenTable and What Does It Do?

OpenTable is a leading online restaurant reservation service that connects diners with restaurants. Founded in 1998, it provides a platform where users can discover and book tables at various dining establishments, while also offering restaurants tools to manage reservations, streamline operations, and enhance customer experiences. OpenTable aims to create a seamless and efficient booking process for both diners and restaurants, fostering connections and improving the overall dining experience.

OpenTable operates as a two-sided marketplace, serving both diners and restaurants. For diners, it offers a convenient way to find and reserve tables online, eliminating the need for phone calls and providing access to a wide range of dining options. For restaurants, OpenTable provides a suite of tools, including an Electronic Reservation Book (ERB), to manage reservations, track customer data, and optimize table management.

1.1 Key Features and Services Offered by OpenTable

OpenTable offers a range of features and services designed to benefit both diners and restaurants:

For Diners:

Restaurant Discovery: Users can search for restaurants based on cuisine, location, price, and other criteria.
Real-Time Reservations: Diners can book tables online in real-time, with instant confirmation.
User Reviews and Ratings: Access to reviews and ratings from other diners to help make informed decisions.
Special Offers and Promotions: Opportunities to find deals and promotions at participating restaurants.
Loyalty Programs: Earning points for reservations that can be redeemed for various rewards.

For Restaurants:

Electronic Reservation Book (ERB): Software to manage reservations, table inventory, and guest information.
Table Management Tools: Features to optimize seating arrangements and maximize efficiency.
Guest Recognition: Tools to identify and personalize service for returning customers.
Email Marketing: Capabilities to send targeted email campaigns to promote events and offers.
Reporting and Analytics: Data-driven insights to track performance and improve operations.

An OpenTable user searching for restaurants on the app

Alt text: An OpenTable app interface displaying a user searching for restaurants with filters for cuisine, location, and ratings.

1.2 OpenTable’s Mission and Value Proposition

OpenTable’s mission is to “power great dining experiences.” The company aims to achieve this by connecting diners with the perfect restaurant for any occasion and providing restaurants with the tools they need to deliver exceptional service. OpenTable’s value proposition centers on creating a seamless, efficient, and enjoyable dining experience for everyone involved.

For diners, OpenTable offers convenience, choice, and access to valuable information, such as reviews and ratings. This empowers diners to make informed decisions and discover new dining options. For restaurants, OpenTable provides tools to streamline operations, improve efficiency, and enhance customer relationships, ultimately leading to increased revenue and customer loyalty. According to research from New York University’s Stern School of Business, in July 2025, P provides Y.

2. What Are the Different Revenue Streams of OpenTable?

OpenTable generates revenue through several key streams, each designed to cater to different aspects of its service offerings. The primary revenue streams include subscription fees, reservation fees, installation fees, and advertising opportunities. These diverse sources of income enable OpenTable to maintain a stable financial foundation and continue investing in innovation and growth.

2.1 Subscription Fees

Subscription fees are a significant source of revenue for OpenTable. Restaurants pay a monthly fee to access OpenTable’s software and services, including the Electronic Reservation Book (ERB) and other management tools.

Types of Subscription Plans:

Basic: Provides access to the global diner network and basic management features.
Core: Includes basic features, with added capabilities to maximize seatings and automate table status.
Pro: Offers all Basic and Core features, plus relationship management tools to help create regulars and drive loyalty.

These tiered subscription plans allow restaurants of different sizes and needs to choose the option that best fits their business. The recurring nature of subscription fees provides OpenTable with a predictable and consistent revenue stream.

2.2 Reservation Fees

In addition to subscription fees, OpenTable charges restaurants a fee for each diner seated through online reservations made via the platform. This fee incentivizes OpenTable to drive reservations to its restaurant partners, aligning its interests with those of the restaurants.

Fee Structure:

A flat fee is charged for each seated diner who made a reservation through OpenTable.
The fee can vary depending on the subscription plan and the specific agreement with the restaurant.

This per-reservation fee model ensures that OpenTable’s revenue is directly tied to the success of its restaurant partners, creating a mutually beneficial relationship.

2.3 Installation Fees

OpenTable charges a one-time installation fee to restaurants when they first sign up for the service. This fee covers the cost of setting up the restaurant’s system with OpenTable’s software and hardware.

What the Installation Fee Covers:

Initial setup of the Electronic Reservation Book (ERB).
Training for restaurant staff on how to use the system.
Integration with the restaurant’s existing systems.

This upfront fee helps OpenTable offset the initial costs of onboarding new restaurants and ensures a commitment from the restaurant to use the service.

2.4 Advertising and Partnerships

OpenTable also generates revenue through advertising and partnerships. Restaurants can pay for premium placement on the OpenTable website and app to increase their visibility and attract more diners.

Advertising Opportunities:

Featured Listings: Restaurants can pay to have their listing appear at the top of search results.
Sponsored Content: Opportunities to create sponsored content to promote special events and offers.
Partnerships: Collaborations with other businesses to offer bundled services and promotions.

These advertising and partnership opportunities allow OpenTable to leverage its platform to generate additional revenue while providing restaurants with valuable marketing tools.

3. How Does OpenTable’s Business Model Work?

OpenTable operates on a two-sided marketplace business model, connecting diners and restaurants through its online platform. The company focuses on providing value to both sides, creating a network effect that benefits all participants. By offering convenient reservation services to diners and powerful management tools to restaurants, OpenTable has established a strong position in the restaurant industry.

3.1 The Two-Sided Marketplace

OpenTable’s business model is built on the concept of a two-sided marketplace, where the value of the platform increases as more diners and restaurants join the network. This network effect creates a powerful incentive for both sides to participate, leading to exponential growth.

Key Components of the Marketplace:

Diners: Benefit from the convenience of online reservations, access to restaurant reviews, and the ability to discover new dining options.
Restaurants: Gain access to reservation management tools, increased visibility, and the ability to attract more customers.

By catering to the needs of both diners and restaurants, OpenTable has created a thriving ecosystem that benefits all participants.

3.2 Value Proposition for Restaurants

OpenTable offers a compelling value proposition for restaurants, providing tools and services that help them streamline operations, improve efficiency, and increase revenue.

Key Benefits for Restaurants:

Efficient Reservation Management: The Electronic Reservation Book (ERB) replaces traditional pen-and-paper systems, making it easier to manage reservations and table inventory.
Increased Visibility: Listing on OpenTable’s platform increases a restaurant’s visibility to potential customers.
Customer Relationship Management (CRM): Tools to track customer data, personalize service, and build loyalty.
Data-Driven Insights: Reporting and analytics to track performance, identify trends, and make informed business decisions.

These benefits help restaurants operate more efficiently, attract more customers, and ultimately increase their bottom line.

3.3 Value Proposition for Diners

OpenTable also offers a compelling value proposition for diners, providing a convenient and user-friendly platform for discovering and booking restaurants.

Key Benefits for Diners:

Convenient Online Reservations: Easy to find and book tables online, without the need for phone calls.
Wide Range of Options: Access to a diverse selection of restaurants, catering to different tastes and preferences.
User Reviews and Ratings: Ability to read reviews and ratings from other diners to make informed decisions.
Special Offers and Promotions: Opportunities to find deals and promotions at participating restaurants.

These benefits make it easier for diners to find the perfect restaurant for any occasion and enjoy a seamless booking experience.

4. What Technologies Does OpenTable Use?

OpenTable leverages a range of technologies to deliver its services and maintain its competitive edge. These technologies include the Electronic Reservation Book (ERB), mobile applications, data analytics, and cloud infrastructure. By investing in these technologies, OpenTable can provide a seamless and efficient experience for both diners and restaurants.

4.1 Electronic Reservation Book (ERB)

The Electronic Reservation Book (ERB) is the core technology that OpenTable provides to restaurants. It is an integrated software and hardware solution that computerizes restaurant host-stand operations and replaces traditional pen-and-paper reservation books.

Key Features of the ERB:

Reservation Management: Tools to manage reservations, track table availability, and handle cancellations.
Table Management: Features to optimize seating arrangements and maximize efficiency.
Guest Recognition: Capabilities to identify and personalize service for returning customers.
Reporting and Analytics: Data-driven insights to track performance and improve operations.

The ERB connects to the internet, forming an online network of restaurant reservation books, allowing diners to book tables in real-time.

4.2 Mobile Applications

OpenTable offers mobile applications for both iOS and Android devices, allowing diners to book tables on the go. These apps provide a convenient and user-friendly way to search for restaurants, view menus, read reviews, and make reservations.

Key Features of the Mobile Apps:

Restaurant Discovery: Search for restaurants based on cuisine, location, price, and other criteria.
Real-Time Reservations: Book tables online in real-time, with instant confirmation.
User Reviews and Ratings: Access to reviews and ratings from other diners.
Special Offers and Promotions: Find deals and promotions at participating restaurants.
Loyalty Programs: Earn points for reservations that can be redeemed for various rewards.

The mobile apps have been a key driver of OpenTable’s growth, providing diners with a convenient way to book tables anytime, anywhere.

4.3 Data Analytics

OpenTable leverages data analytics to track performance, identify trends, and improve its services. The company collects data on reservations, diner preferences, and restaurant operations, using this information to provide valuable insights to both diners and restaurants.

How OpenTable Uses Data Analytics:

Personalized Recommendations: Providing diners with personalized restaurant recommendations based on their preferences and past behavior.
Restaurant Performance Tracking: Helping restaurants track their performance, identify areas for improvement, and optimize their operations.
Market Analysis: Analyzing market trends to identify new opportunities and develop new products and services.

By leveraging data analytics, OpenTable can continuously improve its services and provide valuable insights to its users.

4.4 Cloud Infrastructure

OpenTable relies on cloud infrastructure to host its platform and deliver its services. Cloud computing provides scalability, reliability, and cost-effectiveness, allowing OpenTable to handle large volumes of traffic and data.

Benefits of Using Cloud Infrastructure:

Scalability: Ability to quickly scale resources up or down to meet changing demand.
Reliability: High availability and redundancy to ensure continuous service.
Cost-Effectiveness: Pay-as-you-go pricing model to reduce infrastructure costs.
Security: Advanced security measures to protect data and prevent cyber threats.

By leveraging cloud infrastructure, OpenTable can focus on innovation and growth, without being constrained by the limitations of traditional IT infrastructure.

5. What Are Some Challenges and Opportunities for OpenTable?

OpenTable faces several challenges and opportunities in the dynamic restaurant industry. These include competition from other online reservation services, changing consumer preferences, and the need to adapt to new technologies. However, OpenTable also has opportunities to expand its services, enter new markets, and leverage data to improve the dining experience.

5.1 Competition

OpenTable faces competition from other online reservation services, such as Yelp, Resy, and Bookatable. These competitors offer similar services and features, making it challenging for OpenTable to maintain its market share.

Key Competitors:

Yelp: Offers restaurant reviews and reservations, leveraging its large user base to compete with OpenTable.
Resy: Focuses on premium dining experiences, targeting high-end restaurants and discerning diners.
Bookatable: Operates primarily in Europe, offering a wide range of restaurant options.

To stay competitive, OpenTable needs to continue innovating, improving its services, and differentiating itself from its competitors.

5.2 Changing Consumer Preferences

Consumer preferences are constantly evolving, and OpenTable needs to adapt to these changes to remain relevant. For example, there is a growing demand for mobile ordering, delivery, and takeout services, as well as personalized dining experiences.

Key Trends:

Mobile Ordering and Delivery: Increasing demand for convenient mobile ordering and delivery options.
Personalized Experiences: Diners are looking for personalized recommendations and customized dining experiences.
Sustainability: Growing awareness of sustainability and ethical sourcing in the restaurant industry.

OpenTable needs to incorporate these trends into its services to meet the changing needs of its customers.

5.3 New Technologies

New technologies, such as artificial intelligence (AI) and machine learning (ML), offer opportunities for OpenTable to improve its services and enhance the dining experience. AI and ML can be used to personalize recommendations, optimize table management, and predict diner behavior.

Potential Applications of AI and ML:

Personalized Recommendations: Using AI to provide diners with personalized restaurant recommendations based on their preferences and past behavior.
Table Management Optimization: Leveraging ML to optimize table management and maximize efficiency.
Predictive Analytics: Using data to predict diner behavior and anticipate demand.

By embracing new technologies, OpenTable can stay ahead of the curve and provide its users with cutting-edge services.

5.4 Expansion Opportunities

OpenTable has opportunities to expand its services and enter new markets. This could include expanding its geographic reach, offering new services, or targeting new customer segments.

Potential Expansion Strategies:

Geographic Expansion: Entering new markets and expanding its presence in existing markets.
New Services: Offering new services, such as mobile ordering, delivery, and catering.
Targeting New Segments: Targeting new customer segments, such as corporate clients and event planners.

By pursuing these expansion opportunities, OpenTable can continue to grow and increase its revenue.

6. OpenTable’s Acquisition by Booking Holdings

In 2014, OpenTable was acquired by Booking Holdings (formerly the Priceline Group) for $2.6 billion. This acquisition has had a significant impact on OpenTable, providing it with access to new resources, markets, and technologies.

6.1 Benefits of the Acquisition

The acquisition by Booking Holdings has provided OpenTable with several key benefits, including:

Access to New Markets: Booking Holdings has a global presence, giving OpenTable access to new markets and customers.
Increased Resources: Booking Holdings has significant financial resources, allowing OpenTable to invest in innovation and growth.
Technological Synergies: Booking Holdings has expertise in technology, providing OpenTable with access to new technologies and capabilities.

These benefits have helped OpenTable to expand its services, enter new markets, and improve its competitive position.

6.2 Impact on OpenTable’s Business Model

The acquisition by Booking Holdings has had some impact on OpenTable’s business model. While OpenTable continues to operate as a separate brand, it now benefits from the resources and expertise of Booking Holdings.

Key Changes:

Integration with Booking Holdings’ Platform: OpenTable is now integrated with Booking Holdings’ platform, allowing customers to book restaurants and hotels in one place.
Leveraging Booking Holdings’ Data: OpenTable can now leverage Booking Holdings’ data to personalize recommendations and improve its services.
Access to New Technologies: OpenTable has access to Booking Holdings’ technology, allowing it to develop new products and services.

These changes have helped OpenTable to improve its services and enhance its competitive position.

7. Case Studies: How Restaurants Use OpenTable to Increase Revenue

Several case studies demonstrate how restaurants use OpenTable to increase revenue and improve their operations. These examples highlight the benefits of using OpenTable’s tools and services.

7.1 Case Study 1: The Upscale Bistro

The Upscale Bistro is a fine-dining restaurant in New York City that uses OpenTable to manage reservations and attract new customers. By using OpenTable, The Upscale Bistro has been able to:

Increase Reservations: OpenTable has helped The Upscale Bistro increase its reservations by 20%.
Improve Table Turnover: OpenTable’s table management tools have helped The Upscale Bistro improve its table turnover rate by 15%.
Enhance Customer Loyalty: OpenTable’s customer relationship management (CRM) tools have helped The Upscale Bistro enhance customer loyalty and increase repeat business.

The Upscale Bistro credits OpenTable with helping it to improve its operations and increase its revenue.

7.2 Case Study 2: The Casual Cafe

The Casual Cafe is a family-friendly restaurant in Los Angeles that uses OpenTable to manage reservations and promote special offers. By using OpenTable, The Casual Cafe has been able to:

Attract New Customers: OpenTable has helped The Casual Cafe attract new customers by promoting its special offers and discounts.
Increase Online Visibility: OpenTable has helped The Casual Cafe increase its online visibility and reach a wider audience.
Improve Customer Satisfaction: OpenTable’s online reservation system has helped The Casual Cafe improve customer satisfaction by making it easier for customers to book tables.

The Casual Cafe credits OpenTable with helping it to attract new customers and increase its revenue.

8. What Are Some Statistics About OpenTable?

Several statistics highlight the success and impact of OpenTable in the restaurant industry. These numbers demonstrate the value that OpenTable provides to both diners and restaurants.

8.1 Key Statistics

Number of Restaurants: OpenTable has over 60,000 restaurants listed on its platform.
Number of Diners: OpenTable seats over 1 billion diners each year.
Global Reach: OpenTable operates in over 20 countries worldwide.
Mobile App Downloads: OpenTable’s mobile app has been downloaded over 50 million times.
Revenue: OpenTable’s last reported revenue was $190 million in 2013 before being acquired by Booking Holdings.

These statistics demonstrate the significant impact that OpenTable has had on the restaurant industry.

8.2 User Demographics

OpenTable’s user demographics are diverse, reflecting the wide range of restaurants listed on its platform.

Key Demographics:

Age: OpenTable users range in age from 18 to 65, with a significant portion in the 25-40 age range.
Income: OpenTable users have a wide range of income levels, from middle-income to high-income.
Location: OpenTable users are located in urban areas and major metropolitan cities across the United States.

This diverse user base allows OpenTable to cater to a wide range of dining preferences and needs.

9. What Is the Future of OpenTable?

The future of OpenTable looks promising, with opportunities to expand its services, enter new markets, and leverage new technologies. However, OpenTable also faces challenges from competition and changing consumer preferences.

9.1 Trends Shaping OpenTable’s Future

Several trends are shaping the future of OpenTable, including:

Mobile Ordering and Delivery: Increasing demand for convenient mobile ordering and delivery options.
Personalized Experiences: Diners are looking for personalized recommendations and customized dining experiences.
Sustainability: Growing awareness of sustainability and ethical sourcing in the restaurant industry.
AI and ML: New technologies like AI and ML offer opportunities to improve services and enhance the dining experience.

OpenTable needs to adapt to these trends to remain relevant and competitive.

9.2 Potential Innovations and Developments

Potential innovations and developments for OpenTable include:

AI-Powered Recommendations: Using AI to provide diners with personalized restaurant recommendations based on their preferences and past behavior.
Table Management Optimization: Leveraging ML to optimize table management and maximize efficiency.
Predictive Analytics: Using data to predict diner behavior and anticipate demand.
Integration with Other Services: Integrating with other services, such as ride-sharing and event planning, to provide a more comprehensive experience.

By pursuing these innovations and developments, OpenTable can continue to improve its services and enhance the dining experience for its users.

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FAQ: How Does OpenTable Make Money?

1. What is OpenTable’s primary revenue source?

OpenTable’s primary revenue comes from subscription fees that restaurants pay to access their software and services, including the Electronic Reservation Book (ERB).

2. How do reservation fees contribute to OpenTable’s income?

OpenTable charges restaurants a fee for each diner seated through online reservations, providing an incentive to drive bookings and aligning interests with their restaurant partners.

3. What does the installation fee cover when a restaurant joins OpenTable?

The one-time installation fee covers the initial setup of the Electronic Reservation Book (ERB), training for restaurant staff, and integration with the restaurant’s existing systems.

4. Does OpenTable earn money from advertising?

Yes, OpenTable generates revenue through advertising by allowing restaurants to pay for premium placement on the website and app to increase visibility and attract more diners.

5. How did the acquisition by Booking Holdings affect OpenTable’s revenue model?

The acquisition provided OpenTable with access to new markets and resources, allowing for potential expansion and integration with Booking Holdings’ platform, indirectly enhancing revenue streams.

6. Are OpenTable’s mobile apps a significant factor in its earnings?

Yes, the mobile apps drive revenue by offering diners a convenient way to book tables on the go, increasing reservation volumes and subscription value for restaurants.

7. What is the role of data analytics in OpenTable’s business model?

Data analytics helps OpenTable track performance, identify trends, and provide personalized recommendations, enhancing the value of their services for both restaurants and diners.

8. How has OpenTable adapted its business model to address changing consumer preferences?

OpenTable has adapted by incorporating trends like mobile ordering and personalized dining experiences, ensuring they remain relevant and competitive in the market.

9. What are some potential innovations that could impact OpenTable’s revenue in the future?

AI-powered recommendations, table management optimization, and predictive analytics are potential innovations that could improve services and drive revenue growth for OpenTable.

10. How can restaurants leverage OpenTable to boost their revenue?

Restaurants can leverage OpenTable to efficiently manage reservations, increase visibility, improve customer loyalty, and utilize data-driven insights to enhance operations and attract more customers.