Room 77, a hotel metasearch site that recently received a $30 million injection from Expedia and other investors, has hired Drew Patterson as CEO.
Patterson, 36, widely regarded as an industry wunderkind, earned raves for his performance as a former vice president at Kayak and as co-founder of flash-deals site Jetsetter, which was bought by the Gilt Groupe.
Not all has gone smoothly for the boy wonder, though. Last May, Patterson was asked to leave Jetsetter after a series of departures by senior executives, according to reports.
But Patterson has retained the intense admiration of many in the industry, especially among his former colleagues at Kayak.
The move is partly a talent acquisition. Room 77 acquires CheckMate, Patterson's as yet un-launched hotel check-in mobile application, along with three of its employees—including Adam Rugel, former CEO of Trazzler.
The price of the acquisition wasn't disclosed. A figure of $3 million has been floated by the rumor mill.
UPDATED 4:50 pm ET, Q&A with Brad Gerstner:
Room 77 has been without a CEO since it was founded in 2009 by Brad Gerstner, who is also the founder and CEO of investment firm Altimeter Capital.
We caught up with Gerstner by phone as he was checking in at a Chicago hotel.
Why acquire a mobile app no one has heard of?
We see Room 77 as a mobile-first company.
Consumers are rapidly turning to mobile devices to do their hotel searches, even when they're in the presence of desktops, because it's becoming a preferred medium for search.
The user experience of opening five or six windows to comparison shop for hotels is impractical on mobile devices.
That's where Room 77 has a killer advantage. We can streamline the search process for mobile consumers.
Will CheckMate continue to be developed as an app, now that it's been acquired?
I would characterize it this way: Checkmate was working on a product that hadn't launched.
The CheckMate team will continue to work on the problems they were working on, and Room 77's mobile development team will continue to work on the problems it was working on.
We'll integrate what they're doing as a killer tool for Room 77 users.
Letting customers do early check in and late check out will soon become an integral part of the Room 77 mobile product, for instance.
How many hotels does Room 77 return search results for today? In early March, the company was touting about 100,000 hotels in the US and 100,000 outside the US.
This week we're adding three major brands, which combines with other deals we've done, so we should shortly be closer to 300,000 globally. International expansion is a priority.
In the search results that Room 77 produces, it's all OTAs and the hotels themselves. Why not include results from other metasearch companies?
So far, most of those metasearch providers are just republishing availability we can already get from the hotels direct.
We haven't found enough unique inventory with those providers that would augment the prices and availability we already have.
But, to the extent if there is unique hotel rates available in the marketplace we want to aggregate it. No matter where it comes from, we would be happy.
Some news reports today said that Expedia led the latest investment round of $30 million. That's not right, is it?
Technically Expedia did not lead the round.
One blog has speculated that you picked a candidate for CEO who lacked public company experience because you wanted a person who would let your "choreography" of the company go unchallenged.
Anyone who knows Brad Gerstner or Drew Patterson knows that couldn't be further from the truth.
Patterson is very seasoned and as about as much of a heavyweight as you could find to play this role.
I look forward to partnering with Drew to achieve success. I'm thrilled to have him on board and in charge.
You have to remember I run Altimeter Capital, which is based in Boston, and Room 77 is in Mountain View, California. I have more than a full-time duty job running my investment firm.
I'm tired of having more than the job-and-a-half I already have, and as Room 77 scales it will need a strong leader who has its full attention.
This isn't about Brad Gerstner. It's the opposite. It's about installing someone I trust to build a company into a success.
UPDATE: 3:16pm ET
Patterson's knowledge of Kayak may be a useful advantage, as Room 77's metasearch product increasingly competes with that site, the world's leading travel metasearch company.
Room 77 plans to out-Kayak Kayak on speed, relevance, and comprehensiveness.
It will need to scale up fast.
In an interview, Kevin Fliess, chief operating officer, says that about 12 billion hotel queries a year are done globally across all sites including generic search engines like Google.
A very small fraction of that is metasearch, about 500 million, I estimate.
However, the metasearch bucket is growing at about 100% a year, while OTA bucket growing to 5 to 7% a year. Increasingly consumers are starting their search on a metasearch site. That's a huge opportunity for us.
Prices vary across searches, too.
Fliess also says that in in the past 15 months Room 77 has collected 1.5 billion hotel price points, and that it has found an average $36-a-night difference between the highest and lowest rates on any given hotel about two-thirds of the time.
That's enough of a gap to make metasearch appealing to price sensitive shoppers.
In mid-March, Room 77 launched a mobile optimized site that the company says is the first hotel metasearch to compare mobile-only hotel rates with standard hotel rates across dozens of suppliers and OTAs, according to Fliess.
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Tnooz backgrounder
Room 77's signature product is Room Concierge, a service that offers customers hands-on assistance in helping get them into rooms that match their preferences when they book directly with a hotel that costs at least $400 per reservation and/or that involves a four-star or better property.
Gerstner says that Room Concierge requests work perfectly well on mobile interfaces.
In the past year, Room 77 quadrupled to 15,000 the number of hotel listings for which it has created custom editorial information on room quality.
Room 77 is the only site to allow users to sort hotels by their TripAdvisor ratings besides TripAdvisor itself. [CORRECTION: April 2: Actually, Hipmunk was the first site to do this. Sorry for the error.]
Room 77 is also the only site that lets users sort results by discounts such as AAA-membership or senior, military and government rates.