Publicly traded OpenTable has been the Microsoft of restaurant bookings, a proprietary hardware-software inventory management solution with Cadillac fees and effectively without competition for the better part of the last decade. The company has a market cap of almost a billion dollars.
That was the beginning of an elaborate post I was going to do on Urbanspoon’s new “Rez” challenger to OpenTable. But the Wall Street Journal “broke the embargo” last night and then everyone piled on. You can read all the competing stories here.
So in lieu of the elaborate post I was going to do, here’s the “just the facts ma’am” version:
- Rez was in beta in Seattle and LA with something approaching 150 restaurants for the past several months
- It’s essentially a widget that goes on Urbanspoon, Citysearch profiles and I believe InsiderPages (and is distributed with those profiles via CityGrid to third party sites). It can also be added to the restaurant’s own site too
- Many of the Rez beta testers were also on OpenTable; Rez can be used along side OpenTable
- There’s an iPad inventory management app that replaces the elaborate hardware-software combination OpenTable requires
- Fees for Rez (to the restaurant) are $99 per month plus a dollar per “head” per reservation. This includes new customers and repeat business. Urbanspoon/IAC won’t charge if the reservation comes from the restaurant’s own website however.
- The Citysearch sales force will sell Rez to restaurants
- OpenTable is already responding in Seattle by trying to cut prices and being more aggressive from a sales standpoint.
Here are a couple of images of the iPad inventory management app:
The bottom line is that this is a cheaper, simpler alternative to OpenTable, which the company will have to take seriously. It will probably force OpenTable to step up brand marketing and cut prices. If Rez gains visibility and “word of mouth credibility” among restaurant owners OpentTable’s growth may be slowed or stopped in some markets. Unofficially OpenTable has only about 10K restaurants across the US — a tiny subset of the entire population.
Citysearch and Urbanspoon can bring a compelling set of related marketing services along with Rez, which OpenTable cannot. And Rez can become a more generic online booking/appointments system for Citysearch and InsiderPages over time, extending to other categories beyond restaurants.
Now there’s an angle nobody else covered!