Hall St. is a marketplace enabling anyone who has booked a hotel room but can no longer use to resell it as well as enabling hotels to run flash sales.
The first version of the website was unveiled a year ago and the first person-to-person trade took place in mid-October.
Milestones in 2012 so far have been social media integration, the launch of a mobile application and the company says more than 5,000 hotels are using the service.
The startup is manned by a team of four including chief executive and founder Alfredo Ouro, CTO Toni Rodriguez, CFO Pere Sanz and COO Chris Bates who are all partners in the business.
To date funding to the tune of 600,000 Euro has come via the team, friends, family and two angel investors but Hall St says it is in the middle of a new financing round to take it to the next level.
Competition is pretty much everyone in the hotel distribution landscape but divided by the startup into three groups:
- Direct competitors such as Cancelon, Roomerit (secondary hotel marketplaces created before Hall St.) and Ubid4rooms, Travelsurf or Room Auction (negotiating concept)
- New players in the hotel distribution sphere focused in provide value after-booking such as Backbid and Tingo
- TOP players such as Priceline, booking.com, Hotels.com, Expedia...
Revenue is derived from a competitive fee earned per transaction from the client, which allows Hall St. to offer hotels a low-cost platform where they can sell rooms on a daily basis as well as hold flash sales or special promotions.
Q&A with co-founder Alfredo Ouro:
How is the way you are solving this problem more special or effective than previous attempts you or the market has seen before and how different do you have to be to succeed?
Hall St. is a new and exciting marketplace that links hotels and clients, allowing them to negotiate without middlemen. Furthermore, as changes are part and parcel of modern-day life, our users may also put their room up for sale on the marketplace in the event of their plans changing.
The hotel business is a low liquid market where big players dominate the distribution and the hotel is assuming all the financial risk. For this main reason, Hall St. has been designed in order to create a new way to reserve rooms between users and hotels; one that is more direct, beneficial, and profitable for both parties. Hall St. provides cash, risk reduction and low cost sales for hotels, with involved opportunities and flexibility for users.
Why should people or companies use your startup?
In addition to an exciting reservation experience, the users (travelling for pleasure or for business) get an exclusive price according to their budget. They also have the amazing opportunity to take advantage of the reservation of other platform users who cannot use their rooms. The benefits are twofold: on the one hand, users buy at amazing prices and, on the other, sellers are very happy to recover all or part of their money.
Hotels also benefit as in addition to instantaneous liquidity and a decrease in financial risks, they can also improve their image among users. When hotels need to sell their rooms, the users become a powerful agent that spreads the hotel’s brand among their contacts and friends across the social networks. This is not a simple review as this is an active sale, a much bigger step forward.
What we do is actually quite simple, but something that nobody has done yet in this sector: give users a voice, connect them, and put them in direct contact with the hotel through technology. The result is Hall St. and all its potential.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
The strategy to attract users has been a catch 22 from the beginning - how to get hotels without users? And, how to get users without hotels? For this reason, we designed the following three sequential stages:
- going from an idea to a product
- focusing on the offer, by adding enough hotels that made the offers interesting and attractive for users
- focusing on the demand, the two prior steps have been successfully completed and we are at this stage at the moment
Once we were able to obtain positive indicators on a test basis, we designed a communication strategy based on the social networks, which, in combination with a business partnership, will allow us to achieve the minimum critical mass to make the platform viable.
What other options have you considered for the business and the team if the original vision fails?
Innovating has let us see the hotel room from a different perspective, which allows us to understand new uses for rooms and relations for users with a degree of sharpness. Hall St. is a deep concept and, even though we currently do not have any argument that makes us think of taking other directions, the alternatives are so interesting and substantial that we’re already working to offer them to our users: donating, sharing and exchanging rooms…
What mistakes have you made in the past in business and how have you learned from them?
Hall St. brings together three things to which I did not pay the appropriate attention on my previous projects:
- A challenging and powerful vision
- A high-performance team in which the worst member is better than me
- A completely scaleable concept
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?The business model in the tourist sector is changing completely. Tourists have gone from a passive attitude to a main role in which trustworthy sources of information come from themselves and communication among users expands without limits throughout social networks. As a result, new models and new businesses appear, which serve those interests: accommodation, transportation, and entertainment offered and shared by the users themselves. In this context, the hotel world seems obsolete in the eyes of a new client that shares everything, has a voice, and takes his or her own decisions.
Hall St. is positioning itself to become an ideal platform so that hotels answer these new challenges and business models openly and freshly. This is not a follower project, but a ground-breaking proposal that aims to challenge the status quo in the hotel distribution market worldwide, trying to create a new category: the free market.
Tnooz view:
Speaking at a TTI conference last week, Hall St founder Alfredo Ouro listed some of the startup's five-year goals - a strong presence in 112 of the world's major cities, direct agreements with 15,000 hotels and a database of five million users.
There's lots of positives to this model - users get access to both deals from hotels and deals that other people no longer require, hotels can look at their inventory, see what's unsold and target the Hall St audience. You can also see the potential for Hall St to be extended to other products and services.
There are also downsides - hotels are being bombarded with different distribution models and it remains to be seen if and how the race to the bottom mentality can be addressed. Distribution has become such a mess that what most hotels want is to take the business direct.
Then, there's the stiff competition coming at Hall St from every angle - OTAs, deals sites, auction sites...
Hall St is one of a number of interesting models emerging taking advantage of social networking trends, increasingly popular person-to-person opportunities and hotels with distressed stock.
As always, it will be numbers game - those capable of attracting volumes of users alongside volume inventory will survive and that requires marketing dollars.
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Video:
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