How Diners Are Changing — and What It Means for Restaurants

How Diners Are Changing -- and What It Means for Restaurants

Team OpenTable is excited to be exhibiting at the National Restaurant Association’s NRA Show this weekend! Today, our SVP Marketing Scott Jampol will be giving a presentation for the Marketing Executives Group all about the changes he’s seen in the dining landscape since joining the company in 2008, and we’re sharing some of his insights here on Open for Business.

In short: the game has changed when it comes to diner behavior. In 2008 OpenTable had a network of 8,000 restaurants and seated 2.8 million diners a month; today, we work with more than 37,000 restaurants and seat more than 19 million diners a month. (In fact, we’ve seated over 1 billion diners to date.) Here’s an overview of our growth as of Q4 2015:

How Diners Are Changing -- and What It Means for Restaurants

This growth and experience have given us plenty of data and insight into how diner behaviors and motivations have evolved — and how we’re evolving ours to do the same.

Today’s Guests

The way people dine out is changing. Many people have less time to cook but still want a great meal — 2015 was the first year that Americans spent more dining out than they did on groceries. Today’s diner isn’t choosing between fine dining and fast food — we’re in an era where healthy, delicious meals are becoming easily accessible. In 2020, Americans are projected to spend $101.5 billion at casual restaurants, up from $76.5 billion in 2002.

That’s all great news for restaurants, but it also means that finding and attracting diners (profitably) is more difficult than ever, because they have more choices and less time to plan.

How Diners Are Changing -- and What It Means for Restaurants

How they choose

Our research team interviewed diners in LA, NYC, and Nashville to learn what factors influence their decisions to dine at a certain restaurant. They learned that occasions drive unique behaviors around a meal. People use different sources and methods, but their behaviors and motivations change depending on the occasions, be it a date night or a business meal or a friends’ get together.

For example, a business meal needs to be convenient, with a low noise level. A date night needs good ambiance and, ideally, to be new and buzz-worthy. The bulk of the occasions diners are planning for on OpenTable are friends’ get-togethers and date nights, but everyday dining comes not far behind. Diners are going to OpenTable to seek out casual dining experiences they can enjoy regularly. 

How Diners Are Changing -- and What It Means for Restaurants

We also looked at how frequent each occasion is for the average diner. More special occasions occur less often and generally result in a larger spend. But everyday dining happens literally every day, and the check averages tend to be smaller.

Finally, mobile isn’t the future — it’s the now. Half of all diners seated via OpenTable come from mobile, compared to about 13% five years ago. We’re also seeing a rise in last-minute behavior. One in five reservations booked via the OpenTable app are made within an hour of the reservation time.

What they want

Last year we surveyed over 6,000 OpenTable diners in 10 U.S. metro areas to get their thoughts on the role that technology plays before, during, and after dining experiences — and how they imagine it playing a role in the future.

We found that technology’s role depends on the setting. Respondents said casual restaurants (counter service only and limited service) have the biggest opportunity to benefit from technology, but that all concepts can benefit to some extent.

How Diners Are Changing -- and What It Means for Restaurants

The two things diners are most likely to do before dining are making reservations (88%) and finding a restaurant online (87%). In terms of what they would like to do — and what would improve their experience the most — diners answered knowing how long the wait is for a table (85%) and adding themselves to a waitlist (83%), followed by booking a restaurant that’s hard to get into (81%).

Additionally, the more casual the setting, the more frequently personal devices are used. 43% of diners look at their phones three or more times per meal at a counter-service only restaurant; at a limited-service restaurants, that’s 38%. There’s also far less usage of personal devices during the meal than before the meal.

How Diners Are Changing -- and What It Means for Restaurants

Among diners who haven’t tried new technologies, we saw the biggest appetite for mobile payments: 46% of respondents said they liked the idea.

What It Means for Restaurants

Diners are changing — and the restaurant industry is changing, too. The industry isn’t divided into reservation-taking restaurants and walk-in restaurants; many casual restaurants may want to consider accepting reservations for large parties, for example, and many upscale restaurants reserve space exclusively for walk-ins. It’s a mix. Our focus at OpenTable is to help restaurants run and grow their business by giving them the tools and resources to stay on top of the evolving dining landscape.

Running the business

Helping restaurants run better requires innovation in a few different areas. First, restaurants need to improve operational efficiency with sophisticated, customizable table management tools that allow restaurants to do more turns during a single service and deliver exceptional hospitality to their guests. They need to manage reservations and walk-ins according to their restaurant’s unique traffic patterns and keep tables full, no matter the time of day. They need to solve the pain of paying the check through a seamless payments experience that diners crave.

Finally, to run wisely and efficiently they need superior insights and analytics. Here are a few dashboards OpenTable restaurants use to answer critical questions, measure success, and make smart business decisions.

How Diners Are Changing -- and What It Means for Restaurants

When can I expect to be full? We run aggregate Capacity Reports for entire neighborhoods, and we can narrow them down even further to cuisine types, price points, and more. You may see that diners are out and about in your neighborhood on Monday nights early, but there’s no need to stay open past 9 p.m. These reports also help you understand whether you’re in a reservations-heavy neighborhood or a walk-in one. These reports are incredibly valuable for restaurants that want to make a tight business plan and staff for the optimal hours.

How Diners Are Changing -- and What It Means for Restaurants

How long are diners waiting for a table? Any restaurant that accepts walk-ins will run a wait list at some point. When a host starts to over-quote wait times, that can lead to abandonments — a huge risk when diners have plenty of alternative restaurants in a short walking distance. In this Wait Time Reporting dashboard, you want the red bars to be close to the orange bars; if the red bars are too high the host is over-quoting, and if the orange bars are too high, the host is making people wait too long.

How Diners Are Changing -- and What It Means for Restaurants

What are the dining patterns near me? Sales Benchmark reporting looks at a city (and often down to the neighborhood level) and gives insights on dining patterns for a large number of restaurants. This report gives you an idea of some of the insights you can see. In fact, OpenTable has such a wide reach in certain markets that we can help with predicting future dining patterns, too.

Growing the business

Being part of the OpenTable network makes restaurants discoverable to an audience of millions. The vast majority (78%) of diners who book on OpenTable are booking at that restaurant for the first time through our system. We’re excited to play a role in helping restaurants expand their guest database and, hopefully, turn those first-time diners into loyal regulars.

Finally, one in four OpenTable diners are booking outside their home metro area, which gives us the ability to introduce guests to new restaurants when they’re traveling for work or pleasure. That presents a unique opportunity to reach diners around the world.

If you’re in Chicago for the NRA Show, stop by and see us at Booth #6670!


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