This month, OpenTable updated its client agreements to require partner operators to designate the reservation platform as their primary table management system. The company is also pushing operators to shift from month-to-month to yearly contracts. OpenTable said these moves are meant to protect restaurants from bad actors by ensuring accuracy and protecting guest data.
OpenTable claimed unauthorized third-parties are accessing its platform, outside of approved channels, to extract guest and restaurant data without permission and replicate bookings and availability elsewhere.
The company said the new policy changes would make its platform a “single source of truth that protects guests and restaurant data.”
But some restaurant operators feel otherwise.
Operators have expressed concern and confusion over how the changes to the client terms and conditions will impact their operations.
The Seattle Latino Metropolitan Chamber of Commerce President and Founder Marcos Wanless sent a letter to the state attorney general on April 9 asking the office to determine if the new terms violate competition, consumer protection and unfair practice laws. The attorney general office responded saying it will look into the matter.
Even though OpenTable said its system of record language won’t impact restaurants’ partnerships with other platforms, some fear OpenTable is trying to become an exclusive provider.
“We as operators want to have options, and we want to have multiple partners. As someone who has had a positive experience working with a variety of platforms, we want to continue to be able to do that,” said Rebecca Levine-Hough, vice president of Altamarea Group, which has 16 full-service restaurant concepts globally, including seven in the U.S.
Each reservation platform has advantages and offerings that are desirable to specific restaurants. Which platform is used the most by customers is also market dependent, Levine-Hough said. For Altamarea Group’s restaurants in New York, customers tend to use OpenTable, Resy and SevenRooms. But for suburban restaurants, OpenTable has the largest market share.
“While there is crossover in the market, there are also customer and consumer habits that lead guests to prefer one versus the other,” she said. “As operators, we want the ability to reach the largest number of customers as we can.”
OpenTable said in a statement that it has received a “limited amount of inquiries” from its partners regarding the changes to its client agreement.
“As always, our dedicated team of Account Managers are in constant dialogue with our restaurant partners to ensure our platform evolves alongside their needs,” the company said in an email.
Operators find the new terms confusing
There also is a lot of confusion over what the new terms actually mean, what OpenTable is asking of its partners, how it will enforce the new terms of service, what it will mean for operators working with multiple providers and how the changes will impact contracts with other platforms, Levine-Hough said.
Brad Street, managing partner and COO of KYU Global, which has three restaurants in New York City, Las Vegas and Miami, said he hasn’t been able to get a clear answer on what the “system of record” language means. When he spoke to OpenTable, the company claimed that this wasn’t meant to create exclusivity and that operators will be free to work with other platforms.
“The update to our System of Record standard is about reliability—it ensures a 'single source of truth' for inventory that prevents double-bookings and protects guest data,” OpenTable said in a statement. “To be clear: restaurants remain free to use multiple solutions and still list availability on other platforms. We ask that the inventory they share elsewhere also be available on OpenTable, and that OpenTable be the booking system linked from their website. Our goal is simply to ensure that when a guest books a table on OpenTable, that table is guaranteed to be there.”
Street said managing three platforms between SevenRooms, Resy and OpenTable is challenging enough and each has their own needs. SevenRooms, for example, is typically used on KYU’s restaurant website to book tables directly, while Resy and OpenTable have user apps allowing for consumers to discover new restaurants.
Making OpenTable a restaurant’s system of record could be time consuming, labor intensive and expensive, especially since most restaurants work with multiple reservation platforms, Levine-Hough said.
“Without true interoperability across systems, restaurants can face double bookings, table conflicts, overwritten or missed reservations, added manual work, and the need to re-enter guest information across systems,” Wanless wrote in his letter to Washington State’s attorney general. “These burdens fall especially hard on small businesses with limited staff and little margin for operational disruption.”
Impacts on reservations
OpenTable’s policy changes could impact a large portion of business for full-service restaurants. Altamarea Group’s Marea restaurant in New York City, which has been open for about 15 years, has an “extremely strong following” and about half of its business comes from reservations. Sometimes that number is as high as 75%, depending on whatever booking widget is on its platform, like Google Reserve, where people Googling restaurants can book directly versus using a reservation marketplace. Other restaurants see 30% to 40% of its reservations coming directly, with more coming from marketplaces.
Even before Street learned about the changes, his company was considering moving away from OpenTable, especially since it doesn’t have a strong presence in New York City, compared to other services. However, for its Miami restaurant, KYU has to continue using it because OpenTable has a stronger presence there. In Miami, OpenTable accounts for about 10% of KYU’s reservations, and a lot of tourists use it for discoverability as they are used to the platform, Street said.
“Marketplace is an important part for any restaurant,” Levine-Hough said. “That’s where we see people who are traveling, whether it’s for business or international diners, trying to discover new places in new cities, while your local clientele maybe is used to going direct.”
What are ‘bad actors?’
OpenTable claims that the move is meant to protect restaurants from bad actors who may scrape data and use it to book reservations elsewhere for resale to consumers, leading to potential cancellation and lost business.
Levine-Hough said she has heard of this happening at restaurants, but hasn’t seen it at Altamerea Group restaurants specifically.
“I understand that it does happen, [but] personally that has not been my experience and we enjoy being able to work with multiple platforms and leverage the tools, capabilities and visibility of being in multiple places.”
Altamarea Group typically is on top of reservation confirmations and reaching out to guests, she added.
“A lot of our restaurants have a very strong core client base,” Levine-Hough said. “We generally have had positive experiences working with many different reservation platforms. We have great guests that come in from OpenTable. We have great guests that come in from Resy. We have great guests that are booking direct through the widgets on our website. With SevenRooms, we’re now seeing some come through DoorDash.”
What restructuring contracts could mean
The biggest concern for the Latino Restaurant Association, which has 1,400 members nationwide, is the switch from month-to-month contracts to annual contracts. This change could hurt operators who need additional services but can’t switch, Lilly Rocha, CEO and executive director of the LRA, said.
Longer contracts can lock in restaurants to certain contracts and products, like point-of-sales systems, but limit the services. Some restaurants end up having to add another POS partner to access the services they require. This means that operators typically have to manually manage POS services, especially if the systems can’t integrate with each other. Rocha said OpenTable’s contract changes could replicate that problem with reservation systems.
“This is giving me those vibes with [OpenTable] having ownership of all your tables … and then not having good integration with other systems,” Rocha said.
OpenTable said its move to annual terms “brings us in line with industry standards and reflects the long-term nature of the marketing and operational support we provide. We’ve been working closely with our partners to ensure these updates provide them with more stability, clearer renewal terms, and the modern tools they need to thrive in a competitive market.”
The LRA makes sure that its members are educated about policy changes and aware of their impacts. They are advising restaurants to make sure they read their contracts as well.
“When we see policy changes from big tech companies, whether its third-party apps, whether it is the POS systems, … [or] inventory control systems, … it usually is not beneficial to restaurant owners,” Rocha said. “This always has something to do with their business model and how they’re going to be making money.”
Growing contention over third-party platforms
OpenTable isn’t the only tech platform operators are concerned about. Earlier this year, Uber Eats raised its rates across pricing tiers, leading a handful of operators, like Rave Restaurant Group, to cancel their partnerships.
Uber Eats said it informed restaurants of its rate changes 30 days in advance, allowing partners to shift pricing plans or to exit the platform. Uber Eats hadn’t changed its rates in 10 years and didn’t properly reflect Uber Eats’ operating costs, especially given the growth of its delivery marketplace over that time.
KYU has also been considering moving away from Uber Eats and already works exclusively with DoorDash in Miami, Street said.
Street criticized platforms for dictating terms and rates without having the best interests of operators in mind.
“At the end of the day, you may have the most reach. You may provide the most visibility, but if you’re not offering anything in terms of a true collaborative partnership, it’s not worth it,” Street said.
Levine-Hough expressed similar sentiments, especially over how Altamarea thinks about third-party partnerships.
“You want to feel like the businesses and companies that you're working with are invested and involved partners in what you're doing, and they understand us, working closely with us, how challenging things can be,” Levine-Houghs said. “When decisions like this are made by third-party companies that we rely on to be part of our family or our restaurant ecosystem, it does make operators think twice about who they want to invite into that circle and who they want to work with.”
