OpenTable CEO Debby Soo joins Yahoo Finance's Zack Guzman to discuss the outlook on dining trends amid the pandemic and how OpenTable's app is adapting to the current climate.
ZACK GUZMAN: Of course, we've been seeing a noted recovery as economies had reopened here in the US when it comes to restaurants and bars. And traffic there had been ticking higher. As of late, things do seem to be plateauing a bit. And the shift from getting everything delivered when we were in the intense stages of lockdown also seems to be letting up just slightly.
And for more on that, I'm lucky to be joined here by the new CEO at OpenTable. Debby Soo joins "The Ticker" now. Debby, it's good to chat with you. And congrats on the new position here.
But what have you been seeing play out when we talk about the recovery in restaurants maybe stalling a little bit?
DEBBY SOO: Yeah, so we're seeing a couple trends. And some of them you've talked about, you just mentioned. The first one is that in the US and Canada, people are dining out. So there is this recovery. There is demand to be out and eating food not in your house.
In a recent survey that OpenTable conducted, we found that 25% of survey respondents are dining out at least once a week. What we're also seeing is that people are really concerned about safety. And that makes sense, right? You're very-- if you're going to go out, you want to make sure that restaurants are doing everything to keep their patrons and their employees safe.
So at OpenTable, we recently launched a feature called Safety Precautions. It lets you know what the restaurant's doing. Are servers wearing masks? What's the distance between tables? All of that.
So the demand is definitely there. And as cities and counties open up and restaurants are allowed to open up, either outdoor or limited capacity indoor, the demand is there. People are filling those seats.
But as you see when virus cases spike, you can then see the impact it has on seated reservations as well.
ZACK GUZMAN: Yeah, and when we talk about that, I mean, there's a reason why, I imagine, the safety precautions and your support on that front was wanted, because we talk about the risks associated with indoor dining, which is something you still can't do here in New York. When you look at some of the cases in other states, Louisiana, about a quarter of the state's case count there from March that were outside of nursing homes and prisons stemmed from bars and restaurants. So, I mean, it's an area that we know does carry a risk of transmission.
But on the delivery front, that's another thing, too, that I'm interested to know how OpenTable's playing the part in that sense, because reservations are tougher, I guess, if you don't have outdoor seating. But what have you seen in restaurants maybe grappling with that and the way that everyone had been getting delivery before, and now that shift to eating outdoors?
DEBBY SOO: Sure. I mean, even before COVID, we saw a rise in delivery, which is why we launched our delivery feature last summer, partnering with players like Uber Eats and Postmates. So delivery was already an up and coming trend. And obviously, during COVID, it really spiked up.
To your point, we have seen delivery continue to be up year-over-year. But if you compare it to March and April levels, where the shelter-in-places by and large were everywhere, it is down. So people are going out more and ordering delivery less. But it is still up versus this time last year.
ZACK GUZMAN: Well, let me just do a quick little heat check here, too, since you are now the new CEO of OpenTable. We, of course, chatted with the man who previously held that post, Kayak's CEO and OpenTable CEO before you, Steve Hafner. And he had said that restaurants, based on the recovery that he'd seen so far, the data was pointing to the reality that about one out of every four restaurants here in the US would permanently close. We've seen similarly data points coming from Yelp in terms of the struggles that we're seeing from small businesses.
Now that we've seen a little bit more in terms of the data coming in, what's your take on how many restaurants might be able to weather the storm?
DEBBY SOO: Yeah, so we stand by the one in four estimate that Steve had provided a few weeks or months ago. That estimate is probably conservative, right, as the news is coming out. And we hear it every day on our front lines at OpenTable, of restaurants just not being able to make it work and closing down. So one in four is probably still accurate, but likely conservative.
ZACK GUZMAN: When we talk about what's going on in those restaurants, aside from the safety measures here, your data also pointed to a very interesting trend as well on the tipping front. As we know, servers are grappling here with a lot of different things. They have to wear the mask. Oftentimes, if you're out there, you might not be wearing the mask while you're eating, but they got to keep it on the whole time.
And interesting to see customers out there being maybe a little bit more friendly with tips. What are you seeing on that front?
DEBBY SOO: Yeah, so in our survey, we saw 48% of diners are now willing to leave a tip amount that's 5% greater than the tip amount they would have left pre-COVID. And I think that speaks to we all are so appreciative of restaurants being open, as bastions of local communities and people who work there. And so I think that's why people are more willing to be more generous right now.
ZACK GUZMAN: Obviously, regionally, there's a big difference between New York City dining, where, as I said, still have indoor dining allowed here. But you walk the streets and you see restaurants getting very creative with building outdoor space very quickly. Foot traffic, though, here, very different than perhaps the suburbs in a lot of other states around the US.
Regionally, what are you seeing in terms of breakdowns on that front? And maybe some interesting examples of how things are shifting, as, again, a lot of this is tied back to what we we're seeing on the pandemic front?
DEBBY SOO: Sure. We have-- we released-- we at OpenTable have released what we call the State of the Industry Report. So we've made it publicly available, the dining trends that we're seeing broken out by various metros. And you're right in saying that in large cities, like New York City, for example, the year-over-year decline is more drastic at this moment than we're seeing in the more suburban areas.
There are some places where dining has ramped back up almost to the level of pre-COVID in a few specific, like you said, more suburban cases. But in those large hub cities where population is very, very dense, we are still seeing a pretty drastic year-over-year slump.
ZACK GUZMAN: Yeah, and we've seen a pretty drastic slump in a lot of restaurants that are normally in college towns, tied to activity there, if college students don't return to campus. But I know you guys are also working closely with colleges to help reservations and socially distance when it comes to, I don't know, dare I say, the mess halls in some of these dorms and these colleges out there. What are you seeing on that maybe being a new business opportunity as well?
DEBBY SOO: Sure, sure. So as colleges are looking to reopen or safely reopen their campuses in the fall, OpenTable has offered our technology for free-- so it's not so much a business case-- to help colleges reopen their dining halls safely, to manage things like capacity flow. So a student could make a reservation at their dining hall the same way they would make the reservation at a restaurant on the OpenTable app.
ZACK GUZMAN: Hey, I know signing new users up, it's a young demo-- getting them comfortable with the OpenTable app and getting them comfortable with all that. It may be free, but--
DEBBY SOO: That's certainly-- yeah, that's certainly a side benefit. But for sure, we're trying to do our part here. We know that the restaurant industry has been ravaged. Colleges are trying to figure out what to do and how to reopen. So we want to be as helpful as we can and be in the trenches with everyone else.
I mean, certainly, our business has taken a hit. So again, this is very much to do what we can to help the industry.
ZACK GUZMAN: Oh man, well, going back to my dorm days, probably the least beneficial reservations you come through that platform there, when we think about college food. No one's leaving five stars there. All right, Debby Soo, the new CEO at OpenTable, appreciate you taking the time to chat.
DEBBY SOO: Thanks so much, Zack.