OpenTable’s expansion plans may not be faring so well. In its third quarter earnings last week, Priceline revealed that OpenTable, its restaurant reservation booking property, is very negatively impacting its bottom line. Priceline’s net income was reduced thanks to a $941 million non-cash charge “relating to an impairment of OpenTable’s goodwill,” according to its earnings statement. The write-down is related to a change in OpenTable’s growth strategy. Priceline is curbing its financial expectations for some of OpenTable’s recent international initiatives and will be moving ahead with growth opportunities “on a more measured and deliberate basis,” its financial statement reads.
Priceline acquired OpenTable in 2014 for $2.6 billion. Though the brand fits right in with Priceline’s other travel and entertainment properties, it’s hard not to wonder whether it may have overpaid for the reservation and front-of-house management software.