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Tuesday, August 23, 2016

Cleveland is First US Market for Reso, Latest Challenger to OpenTable

Posted By on Tue, Aug 23, 2016 at 2:34 PM

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During the three years since he opened Cork & Cleaver, chef and owner Brian Okin has managed reservations the old-fashioned way: by answering phone calls and emails from customers and jotting the information down in “the book.” But a few months ago he began using Reso, a new online reservation management system that just entered the Cleveland market. In fact, Okin was the company’s first American account.

“Within a month, more than 50 percent of my reservations were coming in through my website,” Okin says, referring to the Reso widget that lives on his restaurant website. “It has all the same functions as OpenTable, like managing your dining room and communicating with customers, but they only charge a flat monthly fee.”

Okin might not have used OpenTable at Cork & Cleaver or his newer restaurant, Graffiti, but he did use the reservation system at his previous restaurant, Verve. As was the case with many restaurant owners, it was a one-sided relationship that left a pretty sour taste in his mouth.

“It was terrible,” are his exact words.

For almost 20 years, OpenTable has been the de facto tool for making online restaurant reservations. Each month, 19 million diners reserve spots at one of 37,000 restaurants around the globe. That reach and brand awareness lands small, medium and large restaurants in front of countless potential new customers. But it does so at a hefty price.

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“People don’t understand the fees that are associated with the system,” explains Doug Katz, who recently swapped Fire Food and Drink’s OpenTable system for Reso after learning about it. “It’s like credit card fees, but so much more extreme. The fees are really astronomical for the value they currently are giving you.”

Katz says that he was paying up to $25,000 per year to OpenTable in the form of equipment rentals, monthly fees and per-diner costs of $1 and up. And even those supposed marketing perks that tout Katz’ Eastside eatery on OpenTable’s Cleveland portal are not always what they are cracked up to be, he says.

“Your restaurant might not even appear to people looking for a table in a certain region if you are not in that region, if you happen to be offline, or if you’re booked up,” Katz states.

Katz agrees that OpenTable might be a tough habit to break for restaurants that might have a stronger appeal to those living outside the local market. Fire, he says, lives and dies on a pretty consistent customer base who know where and when they want to dine. Having them fill out a slightly different reservation system to do so is not a significant hurdle.

“I think the main clientele who use OpenTable are travelers,” says Katz. “If you’re going out of town you often start with OpenTable to check all the best restaurants. But unfortunately now, you see a lot more chain restaurants and others that can afford a system like OpenTable. In a way, the best restaurants aren’t always on OpenTable because they can’t spend the money or don’t want to spend the money.”

Over the years, a number of startups have challenged OpenTable at its own game, hoping to break the company’s stranglehold on the market. Not many, it seems, get very far; they either fold, remain niche or irrelevant, or get gobbled up by OpenTable. Reso is one of the latest to enter the cutthroat restaurant reservation management game, and the company has selected Cleveland as its first U.S. market.

“Cleveland has a strong independent restaurant scene, and it has been getting more and more attention nationally for its chefs and great restaurants,” explains Tyler Davis, VP of Operations for Reso. “We thought it was strong market.”

While Reso might be new to the United States, the company has been providing a cloud-based restaurant management tool for years in its home market of Canada, where 1,000s of restaurant owners coast to coast utilize its software to manage their booking and seating. They chose Cleveland as the place to roll out their new consumer-facing website and app that will seamlessly pair with that system.

“We really invested in Cleveland because we feel like we can build and grow the local market instead of doing a scattered approach where we can be everywhere but be nowhere at the same time,” Davis says.

To that end, Reso hired Don Apel to manage, maintain and grow the Cleveland market. For years, Apel has worked in some of Cleveland’s finest restaurants, most recently as GM of Flour. Just weeks into their launch, Reso has inked deals with about a dozen area restaurants. That number is expected to double very soon. Most mention the predictable fees and ease of use as enticements to switch.

“At the end of the day, the restaurant is the attraction,’ Davis says. “We want to make booking as easy and seamless and as enjoyable an experience as possible. At the end of the day, people are not suffering through a restaurant meal for the joy of filling in their name and number.”

It’s still early in the going for Katz, who signed on just a week ago, but he’s cautiously optimistic.

“It’s a risk,” he admits. “I think people are scared because OpenTable is such a big fish. But personally, I felt I needed to make a stand and do it. I felt confident enough that we’re serving a great product and have a great customer base to support us.”


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