STARTUP STAGE: Stay22 targets event accommodation

Stay22

The event services platform has $750,000 in its back pocket after a recent funding round, helping with its mission to help organizers provide accommodation to attendees.

It currently counts some 6.5 million listings in more than 200 countries and has secured agreements with partners as varied as Airbnb and rock band Pearl Jam.

Describe both the business and technology aspects of your startup?

The business

Over half the total spent on hotels and short-term rentals, $295 billion each year comes from event accommodation for conferences, concerts, festivals, and sporting events.

This is an incredibly underserved market. Event organizers typically view attendee accommodation as a non-revenue-producing activity and spend countless hours reserving blocks of rooms for $0 in return.

Stay22 turns this into a HUGE new source of revenue for the event organizers who partner with us.

The technology

Our accommodation map displays all available hotels, Airbnbs, hostels and all other alternative types of accommodation.

The event venue is placed at the center of the map with estimated timing for commute and distance from the accommodation to the venue.

The map also recommends what means of transportation to take: walking, biking, or driving. From there, users have the ability to filter and sort through their preferences to find the best accommodation for their needs.

Through our heatmap feature, we also offer users the ability to see what type of neighborhood they’re staying in - whether it’s nightlife friendly, if there are natural views of mountains or other landscapes, and even whether it’s a foodie sector, as well as other aspects.

All these features are easily embeddable on any web page. Just like a copy-paste Youtube link. Live event organizers only need to know basic HTML to be able to integrate the interactive map on any website they have.

Our travel solution for organisations and platforms in the events, entertainment and transportation industries will make it easier for event and destination travelers to book accommodation like never before.

What inspired you to create this company?

The startup was born as an answer to the problem faced by the founder - i.e. finding a solution to stop wasting time and reduce the amount of frustration experienced by people who organize trips abroad to attend events.

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company?

Strengths

• Being a fledgling business gives the advantage of being able to always adjust and adapt to different changes that may occur in the market. The company uses a mode of participative management where each member of the company is brought to participate in the life of the company beyond its tasks. Everyone is encouraged to take initiative and provide advice and guidance in all areas that affect the company. This way of working encourages a good atmosphere and good communication within the company, and above all motivates the staff to commit themselves to move the company forward. Each team member organizes and manages their schedule, which promotes autonomy and coordination. The company has its office at MT Lab which hosts other startups. The dozen companies work in an open space which provides a good framework for the company. Indeed, the open space has become the hallmark of a discourse on the virtues of communication, transparency and exchanges. It allows to soften the minds, to increase the fluidity of information and informal exchanges.

Weaknesses

• Long sales cycle due to product still being a vitamin instead of a painkiller
• Reliance on hosting inventory provider
• Revenue gets split deeply from the hotel, to the OTA, to us and then to the partner

Opportunities

• The city of Montreal is known internationally for the quality of its festivals. This reputation stems from the cultural, economic and tourist aspects of the city which improves the international exchange process (Ville de Montréal, 2018). Montreal's events are an opportunity for Stay22 to develop its visibility and acquire new partners. Consumer behavior has changed significantly in recent years. New trends are collaborative - they bring in alternative lodging, mobility, the importance of sharing and personalization. This change in behavior is an opportunity for our company, which puts forward a solution that promotes mobility and alternative types of accommodation.
• Airbnb has signed a partnership agreement with Stay22 giving them access to an inventory of more than 4.85 million accommodation properties in 65,000 cities in more than 190 countries. The startup is one of the only ones to have an exclusive partnership in the events space with Airbnb. This partnership is a huge opportunity for Stay22, as its interactive map becomes a unique solution and gives it a competitive differentiation. HotelsCombined is another one of Stay22’s major partners and brings to it an important inventory of accommodation and competitive prices on the market.
• The MTLab is an incubator of innovation in tourism, culture and entertainment. MTLab gives the companies using its workspace access to various leaders of the tourism industry which sits on its board of directors: Tourisme Montréal, Aéroports de Montréal, Alliance Touristique, Loto-Québec, Air Canada, Sépaq, and ITHQ. This incubator provides access to various events in the Montréal tourism industry and encourages networking - a good way for the company to develop its network.

Threats

• The rapid evolution of the tourism industry is bringing new competitors to the fore each day, with direct and indirect competitors disrupting the long-term viability of the company.
• The political environment and the societal environment are major factors that enter into the decision-making process of tourists.
• Several variables such as wars, insecurity, diseases, terrorism have a direct impact on the decision to travel for the tourist. These reasons in some way impact the business, because if tourists are led to travel less in some places, they are less likely to use the interactive map.

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

Location is a top priority for event-goers, who hope to book an accommodation within walking distance from the venue.

Price of lodging is an important concern for event-goers, especially after already spending their money on the event ticket.

Once we have A round funding, we can comfortably spend money and do what every travel company does: bid for keywords.

Stay22

Share this quote

With our innovative solution, consumers save time and money. By embedding our accommodation solution on the event website, we enhance attendees’ booking process by reducing friction during the transaction, delivering an effective accommodation solution precisely when they need it.

Organizers spend time and energy chasing hotel deals and negotiating room blocks when they should be focusing on their events.

With our solution, event organizers earn revenue for each booking made through the map, thereby creating a new revenue stream.

By partnering with Stay22, event organizers improve their out-of-town attendees’ experience. Where they used to leave money on the table by referring attendees to hotels or OTAs, they can now earn revenue from each attendee booking.

Stay22 is designed with the event-goer’s experience in mind. We’ve implemented specific features that no other interactive map solution offers, such as venue itineraries, a heatmap to identify neighborhoods, and information on other attendees whereabouts.

So you’ve got the product, now how will you get lots of customers?

For now: our network, cold emails, cold calls, using our event organizers as sellers by referring us more customers in exchange for commission.

The next step is to see how we can automate some of the cold reach out, as there are always potential customers to reach out to, and we can always hire more salespeople.

Once we have A round funding, we can comfortably spend money and do what every travel company does: bid for keywords. However it will be extremely profitable for us - we've tested $100 a week on "SXSW hotels," which has yielded us $11,000 in revenue.

Look, no one is taking care of accommodation for events, and they're half the reason why people go in hotels. Over 50% of the people stay in a hotel for a meeting or event purpose...not for leisure. And it's crazy there's no solution out there for these people.

Tell us what process you’ve gone through to establish a genuine need for your company and the size of the addressable market?

Process

• We proposed the MVP on Reddit for an e-sports event in Cologne for gamers, to see what the reaction would be like, and the PMF was there right on the spot!

Size of the market

• In 2016, the global hotel industry retail market was valued at $490 billion, not including revenue from alternative accommodation such as Airbnbs. Projection for 2018 is evaluated at $554 billion, a growth even taking into account annual inflations of 3.5% (inflation only from $490B in 2016, 2018 would be around $525 billion).
• From the event industry, 2.55 million events are held each year, where attendees spend USD$700 average per event. Airfare rates are also at an all time low (around 15% lower in 2016 compared to 2015) which makes long distance travels more attractive.

How and when will you make money?

We get paid whenever a user books a hotel. The commission varies, but it's usually between 5% to 20% of the total booking price. We then split that between us and our partner.

What are the backgrounds and previous achievements of the founding team, and why do you have what it takes to succeed with this business?

• Andrew Lockhead (Co-Founder CEO - Previously co-founded Canada’s largest student ticketing platform Student Sphere)  is a lucky entrepreneur with various ventures related to the event industry. He previously founded the largest ticketing platform for students in Canada. Having been raised in the family business, he had the chance to fulfil his business acumen early on.
• Hamed Al-Khabaz (Co-Founder CTO - Previously co-founded Canada’s largest vacation rental aggregator Zilyo) is a co-founder of Stay22, a Montreal-based startup that helps event organizers provide places to sleep for their attendees. He is a full stack entrepreneur coding by night and selling by day. Most of Hamed's previous work revolves around Travel, eSports, Events, Web Security, and Growth hacking tools.
  
  

What’s been the most difficult part of founding the business so far?

So far, the one of the most difficult parts of founding the business have been creating partnerships, reaching sales goals and partnership goals.

Partnering with Airbnb and Travelport, for example, was very important for us. Since we are such a new company, every day we have new goals to work towards and new expectations.

Another challenging aspect is finding investments and, of course, becoming profitable.

The sales cycle is the most challenging part. Platforms don’t usually prioritize integrating our solution, hence it’s considered as a vitamin to businesses (generating extra revenue).

If we can find a way where it becomes a pain killer for our prospects it would help tremendously.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

Since we’re the founders of the company, we’re essentially solving our own problems, from the attendee and the organizer side.

It also helps that we both have incredibly relevant experience in the event and accommodation industry. It also helps that we’re a first mover.

We’re also one of the few companies in the world with a partnership with Airbnb to lead their event segment.

This puts us in a special position by enabling attendees to have a large inventory and book with confidence, knowing they comparing both Airbnbs and hotel choices.