OpenTable shows its hand
OpenTable shows its hand
CEO Debby Soo explains a new Visa partnership and a push to win over ‘the best’ restaurants in North America
Oh hey, here I am, checking in from vacation thanks to a pair of announcements from online reservations pioneer OpenTable intended to make some noise (and perhaps a point about the company’s future).
The first is a partnership with Visa to offer its premium cardholders prime time and exclusive reservations and events.
A reservations service and a credit card company teaming up to offer access and exclusivity? You don’t say! The practice of holding tables for a subset of prestige-card customers has been around for ages; more broadly, reservations shifted from plans to perks years ago.
“We didn’t invent this,” Debby Soo, OpenTable’s CEO told me in a recent interview. “The reality is that this is the playing field that we are playing on.”
In other words, OpenTable’s competition has evolved. Resy, the company’s main competitor, was acquired by American Express in 2019. Amex just bought a second competitor, Tock, for $400 million in late June, making a Visa-OpenTable alliance even more important to the booking company’s image and business. There are more competitors, too, including the spate of third-party sites and services that promise hard-to-get tables, often to the highest bidder. The stakes on the best seats have never been higher.
The Visa Dining Collection, as it’s called, is live at some restaurants in Chicago and Los Angeles now, with destinations in Miami and Washington, D.C. coming before the end of the month. By the start of 2025, the OpenTable + Visa deal should grant cardholders access to over 500 sought-after spots — neighborhood favorites and Michelin-starred restaurants alike — in the U.S., Canada, and Mexico.
As the business of reservations becomes more about the business of access, any bookings service, even the biggest one, is only as strong as its roster of restaurants.
“When I joined OpenTable four years ago, the business was in fine shape,” Soo says. “But what I noticed, and what everyone noticed was that, despite the fact that we were growing the number of restaurants on our platform, we were losing some of the best ones.”
“Best” is, of course, subjective. But Soo has made no secret about her intention to win, or in some cases, win back, the sort of restaurants that diners get excited about.
“The problem with losing the best is a lot of people come to the site looking for a certain restaurant,” Soo continues. “And for me, the focus of the company has been about the restaurants, because again, if you do not have the restaurants, we will not have the diners.”
Hence the company’s second announcement: OpenTable created a new tier of restaurants on its platform, dubbed “icons.”
The company bestowed this new status to over 100 restaurants in 11 cities, based on criteria like awards and reputation and notoriety and popularity. It comes with perks like additional marketing and events support, plus special designations on the site. It’s an exclusive set, representing less than 1 percent of the 60,000-plus restaurants that use OpenTable. Icons are live in cities including Boston, LA, and Toronto — restaurants in New York City and Houston will come later this month. (Wonder what — or who — they’re waiting for?)
Soo calls the program “critical to our longer-term strategy.” She didn’t offer details on that strategy, but it’s easy to imagine how a class of top-name restaurants will elevate OpenTable’s image while creating more benefits and value for the diners who use it.
It’s also strategic. The restaurants dubbed OpenTable icons are, per Soo, the type of place that other restaurants want to emulate. “If one of them moves to OpenTable, they’re going to get a call from others asking, ‘Why did you move?’ We know that happens,” she says.
It does happen, especially since a reservations service, unlike other third-party services like delivery, is more of a singular and long-term commitment. Restaurants bounce between booking services for plenty of reasons, potential perks, recognitions, financial incentives, and big-deal partnerships among them. Reservations companies, and now their deep-pocketed credit card partners and owners, are smart to sweeten the deal as much as possible to win and keep restaurants. The competition’s heating up!
Or, as Soo says of the icons program, “It is the first step of a lot of different initiatives that we have cooking here at OpenTable.”
Expedite is back on its standard schedule next week.