HotelTonight is aiming to outrun its copycat competitors with an iPhone app upgrade called Snap Your Stay, which encourages users to take photos of their hotel rooms.
The San Francisco-based company describes Snap Your Stay as a reinvention of the hotel review. That may strike some skeptics as hyperbole. It's just another bell and whistle, right?
HotelTonight insists that this new feature represents a truly an important innovation for the industry.
But are little UX tweaks enough to keep HotelTonight ahead of copycat rivals? Can HotelTonight scale?
For answers to these questions, Tnooz spoke by phone with CEO Sam Shank:
What's the 30-second pitch for the Snap Your Stay function?
We wanted to apply the UGC [user-generated content] model to mobile. It's impractical to write a 200-word review on your phone. But snapping a picture is easy.
We've further simplified the process of uploading photos to only about 20 keystrokes -- much much less than trying to write a review or check boxes.
If a customer is debating between two hotels to pick, quickly scanning photos of each hotel is a fast way to make a decision. Obviously, looking at photos is a favorite use for phones already.
I've been thinking about hotel reviews on and off for about nine years, including a long stint at TravelPost. So it's satisfying to reach this point.
How does Snap Your Stay demonstrate your company's mobile-first approach to product design?
Besides games, the most successful mobile apps have been Instagram, Snapchat. It's been all about visuals. So we wanted to bring more visual elements into HotelTonight.
We have an optional filter that lets a user brighten up the contrast on each photo.
Is there gamification?
Yes, in the very short term, we reward a user who takes six relevant photos with a discount off a future hotel stay, such as $5 off. If you make it into the popularity leaderboard because your photo is particularly good or compelling, then you get a bigger discount, like $10 off.
We've made the photo-taking process is a bit like a treasure hunt. Take a photo of the bed, take a photo of the bathroom. It's hard for me to put this into words and make it sound fun. The proof that's its fun will be if users really get into it, which we think they will.
Any creative ways for getting the word out about the new product?
Virality is built-in because users are encouraged to share photos of the hotel they're staying at via their social networks. You can share a link to a mobile-optimised webpage version of the image.
That should help get the word out about HotelTonight even more.
Can HotelTonight truly scale if its inventory remains so tightly curated?
Yes. There are a lot more hotels we want to work with than the 2,500 are currently working with. We have more inventory to bring on-stream than we have demand to support.
While we don't want to have 1,000 hotels in every city, we do plan to add more hotels in each city than the current levels.
It's a balance, though.
Part of our appeal to hotel revenue managers is that every day they see customer referrals from us, at least in our more mature markets. There's an action and a reaction behavior.
When the revenue manager takes action, we've got 14 hours to have a reaction.
If we can give them that reaction with a reliable stream of quality customers, then they're going to use HotelTonight more often because we'll have proven that we can be useful.
Especially if that reaction is something they can't do on their own, which is bring in, at the last-minute, highly qualified customers who are different and incremental and not part of their customer base.
What about HotelTonight's ability to fend off copy-cat clones that closely mirror it with tightly curated lists of properties, like France's VeryLastRoom?
Starting today, HotelTonight guarantees its rates against competitors’ offerings. On the off chance the HotelTonight rate is beat, the company will offer the booker HT credits equal to the difference in price.
But: big picture. Can we beat the clones more generally? Yes.
The marketing, the building up supplier relationships, the handling of customer support issues, the making sure there's quality control on the inventory and a consistency in the depth of discounts -- all of that requires resources. We've raised more money than our competitors to fund all that, about $35 million.
It's hard to replicate all those advantages.
We've seen more growth than we've seen in the clone competitors we know of in other geographic markets. We've seen our revenue growth rate be 300% from 2012 to 2013.
How can HotelTonight keep ahead of clone apps that also sell same-day rooms and are run by enormous online travel companies, like the Booking.com Tonight app?
We differ from the big boys in that we're focused on one vertical -- hotels -- and one platform -- mobile. So we can innovate faster.
We also run our businesses differently. We have only two offices, so it's easy for our staff of about 100 employees to swap ideas in how to pitch new hotels for business or come up with promotional strategies. Our startup size and dynamic encourages more creativity than a bureaucracy does.
We think we hire better talent, too. For example, we acquired PrimaTable, a restaurant app, last fall, to bring on board its data scientists. And Jamie Davidson became our vice president of product and oversaw the development of Snap Your Stay.
How can HotelTonight compete with the established OTAs and their huge marketing machines?
We tend to attract a different type of customer, someone who tends to be more impulsive, maybe to avoid cancellation fees when their plans are uncertain.
We track what happens to our customers and a large proportion become brand loyal. If they choose to stay for additional days, they tend to do so at full price.
Our customers tend not to be exclusively focused on the cheapest deal possible, so it's not cannibalizing a hotel's sales -- unlike what other companies may be doing.
Our research suggests we're bringing many customers into the market who wouldn't otherwise be there.
Having the mobile device and the HotelTonight range of curated properties at a discount actually changes behavior by converting people who wouldn't have contemplated staying overnight at a destination into people who do because we've made spontaneity convenient and enticing.
Anecdotally, we hear that some of these customers think of themselves as making a little splurge, a little treat for themselves. And upscale hotels want to attract customers with that mindset.
How big can HotelTonight get?
Hard to tell. This is a category that's just been invented, so there isn't much market research about it yet. We think overall same-day mobile bookings account for 15% of the market.
That's a lot of bold talk from a CEO. But Shank's company has a lot to brag about.
Some self-reported numbers: The app has been downloaded 5 million times, more than any of the clones Tnooz knows about. It claims 300% revenue growth rate from 2012 to 2013. It has 250,000 fans on Facebook, which suggests strong user enthusiasm.