Open Table, the online restaurant reservation system, has swept its way into over 10,000 eating type establishments. With revenue of $55 million and an almost unbelievable, successful IPO, given the economic climate, the company has even infiltrated the suburbs. Now, iPhone App competitor Urbanspoon looks to enter the same space.
Currently being tested, Urbanspoon’s twist looks to be immediacy as the new service can now help users make same-day reservations. Instead of planning reservations in the future like Open Table, Urbanspoon looks to seize the “where can we eat now” crowd. So how can Urbanspoon compete with an established market creator?
OpenTable’s start up cost for a restaurant is about $1300 for hardware installation and training. The site also collects $1 bounty per diner and $199 per month for membership (figures from here). Ouch. Why would anyone sign up for such an expensive system? The software. OpenTable’s reservation management, customer database, and email tools allow restaurants to have better access to their customers — an important means for marketing.
One hiccup for Urbanspoon is compatibility. A reservation coming in through Urbanspoon while earning the same $1 bounty for Urbanspoon must be manually entered in a restaurant that also has OpenTable. For a busy place, that is going to be an issue.
This should be one to watch.