OpenTable

1. Restaurant Owners widely complain about OpenTable fees. Are their concerns well founded?
Yes
2. Why?
High Commission Fees: OpenTable charges restaurants a commission fee for each reservation made
through their platform. This fee can range from a percentage of the total bill or a fixed amount per
reservation. For some restaurants, especially smaller ones with slim profit margins, these fees can add
up and impact their bottom line significantly.

Subscription Costs: In addition to commission fees, OpenTable offers various subscription plans with
monthly costs. These plans provide additional features and benefits, but the expense can be a burden
for smaller restaurants or those just starting out.

Competitive Industry: The restaurant industry is highly competitive, and profit margins can be tight.
Restaurant owners may find it difficult to justify the costs associated with using OpenTable, especially if
they believe they can fill their reservations without relying on the platform.

Cost vs. Value: Some restaurant owners question whether the fees they pay to OpenTable are worth the
value they receive in return. They evaluate whether the reservations generated through OpenTable
justify the costs incurred.

Dependency Concerns: Relying heavily on a third-party platform like OpenTable can make restaurant
owners feel dependent on its services. If there are changes in fee structures or policies, it can impact
the restaurant's financial stability and operational strategies.

Limited Customer Data Access: Some restaurant owners express frustration with the limited access to
customer data provided by OpenTable. Access to detailed customer information can be valuable for
marketing and improving customer experiences, and restrictions in this regard can be a concern.

3. Assess the prospects of OpenTable Payments. Is OpenTable Payments better positioned than the
competitors presented in Exhibit 4?

3. Why or why not? What adjustments would help improve the prospects of OpenTable Payments?
User Base and Reach:
OpenTable has an established user base due to its reputation as a leading restaurant reservation
platform. If OpenTable Payments can leverage this user base effectively and encourage adoption, it
may have an advantage in terms of initial market penetration.

Integration and Seamless Experience:

The integration of payment capabilities within the OpenTable app offers a seamless experience for
diners. This integration may provide an advantage over competitors that require users to use multiple
apps or platforms for reservations and payments.

Transaction Fees and Revenue Model:

The transaction fees and revenue model of OpenTable Payments compared to competitors' fee
structures are crucial. Lower or competitive transaction fees can attract both restaurants and diners,
potentially giving OpenTable Payments an edge.

Security and Reliability:

Security and reliability are paramount in payment systems. If OpenTable Payments offers a secure and
reliable platform for transactions, it could gain a competitive advantage, especially if it's perceived as
more secure than its competitors.

Competition in the Industry:

The competition in the payment processing industry is fierce, with various players offering similar
services. Square, Toast, and other payment processors have their own advantages, such as
widespread adoption, comprehensive point-of-sale systems, or lower fees.

User Experience and Features:

The user experience and features offered by OpenTable Payments compared to competitors are crucial.
Offering a superior user experience, additional features, or integration with loyalty programs can make it
more appealing to users.

Partnerships and Integration:

Partnerships and integrations with other industry players, such as POS system providers or restaurant
management platforms, can enhance the appeal and functionality of OpenTable Payments, potentially
giving it a competitive advantage.

The following adjustments would help improve the prospects of OpenTable Payments:
Competitive Transaction Fees:
Conduct market research to determine appropriate transaction fees that are competitive and attractive
to both restaurants and diners. Consider offering tiered fee structures based on usage volume to
incentivize increased adoption.

Partnerships and Integrations:

Form strategic partnerships with other industry players, such as popular POS systems or loyalty
programs, to enhance the value proposition of using OpenTable Payments. Seamless integration with
these systems can provide added benefits for both restaurants and diners.

Enhanced Security Measures:

Invest in robust security infrastructure to safeguard user data and financial transactions. Regular
security audits and certifications can help build trust and confidence in the payment platform.

User Education and Incentives:

Conduct marketing campaigns to educate users about the benefits and ease of using OpenTable
Payments. Offer incentives, discounts, or loyalty points for using the payment feature to encourage
adoption and regular usage.

Feedback and Iteration:

Actively seek feedback from both restaurants and diners using the payment feature. Use this feedback
to identify areas for improvement and iterate on the platform to address concerns and enhance the
overall experience.