Commeasure has its eye on small, independent and boutique hotels who are eager to increase their direct bookings.
The Singapore-based startup's platform includes a booking engine, training and online distribution.
The company's revenue will come via a percentage of the takings the hotel makes via its website and mobile channel. Simple, right?
Amit Saberwal (CEO) and Kunwar Asheesh Saxena (CTO) founded Commeasure in early 2014.
The pair have some pedigree in the online travel sector, with Saberwal previously chief business officer and Saxena the director of technology for hotels at MakeMyTrip.
Q&A with Saberwal below.
Tell us how you founded the company, why and what made you decide to jump in and create the business.
I was a hotelier for many years, prior to joining MakeMyTrip in its startup phase in 2005.
As we built a highly successful online hotel business at MakeMyTrip, one thing that did not change was that many of my hotel friends and ex-colleagues continued to be blissfully ignorant of the changes that were taking place in the online hotel space.
With time, customer acquisition got more and more complicated. As customers started using mobile and social media to check on prices and reviews, smaller hotels kept falling further behind.
Solutions available to them, were either too expensive or addressed only one part of the customer acquisition problem. A quick look at the scenario revealed a huge opportunity to bring small, independent or boutique hotels at par with bigger chains on the customer acquisition front.
This inspired us (founders) to build a comprehensive plug and play solution for hotels that would enable them to acquire customers from their own mobile and websites and thus lower their cost of distribution.
We decided to focus on the customer acquisition and retention side of the business while opening our platform for integration with good technology partners that are complementary to our offering.
Our focus is to keep things simple for hoteliers so that they can spend more time and effort on keeping their guests happy, while Commeasure works on keeping their web presence at par with competitors.
Saxena and I worked together for five years and he headed online hotel technology at MakeMyTrip. I headed the business side for online hotels so we felt that we had the necessary expertise and exposure to solve this problem.
Size of the team, names of founders, management roles and key personnel?
Ours is a lean startup to ensure we do not top load and make the platform unviable for the very people we hope to help. At present, we have a two man–management team and a small scalable technology team.
Funding arrangements?
We're self funded.
Estimation of market size?
By 2015, online hotel gross bookings in APAC is estimated at $34.5 billion, a 51% increase over 2012. Bookings generated via hotel websites would be about $12.3 billion.
Competition?
Most competition either handles one aspect of the problem or offers expensive customized solutions. Sabre, Travelclick (acquired by Thoma Bravo), Buuteeq (acquired by Priceline) are some of the names in the hotel technology space that we compete with in some shape or form.
Revenue model and strategy for profitability?
Our revenue model is highly scalable with two pillars: Number of hotel signups and bookings per hotel.
Low setup fees, plus percentage of revenue materialized through the mobile and website channels setup by us for the hotel.
What problem does the business solve?
Commeasure solves the customer acquisition proposition for small, independent or boutique hotels who are unable to generate enough direct online business through their own mobile and website channels, through a solution designed to deliver success.
Consolidation in the OTA space means that commissions can go as high as 25-30% for independent hotels.
Hotels need to have a healthy mix of business from OTAs and from their own/direct websites. Commeasure lets hotels distribute their property on OTAs as well as their own websites and not be solely reliant only on third party distributors.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
We are still with our original idea, adding bells and whistles as we build the business.
Why should people or companies use the business?
Commeasure offers a transparent, revenue enhancing and success based model. This aligns us and the hotel to work towards a common cause of getting more direct business into the hotel.
We also have a money-back guarantee so customers can be assured of a better bottom line. All hotels who face challenges on optimizing their online sales due to lack of optimization or dynamic sites, have nothing to lose by using the Commeasure solution.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We are well connected in the business and would leverage our contacts to reach out to the first 100 hotels.
Use direct mail, success stories, web, social media, and blogs for lead generation.
Convert leads through our call centre for demos and a lean business development team.
We have compiled a database of over 35,000 hotels as a starting point for this business.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
I think we would be a significant player in the online space offering a real and cheaper alternative to third party distribution available to hotels.
I envisage Commeasure being implemented in over 5,000 properties worldwide. Challenges are numerous and related to scaling the business, but we are well exposed to building and running large businesses and intend to leverage that expertise to grow the business.
The right amount of capital infusion at each stage of the business’ growth would ensure our success.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
The lack of significant disruption for many years and the fact that distributors are stronger than suppliers.
If you look back, AirBnb is the only real disruptor in the past five years. As OTAs keep consolidating and expanding in other markets, they are moving through the online travel space like a behemoth that no one wants to take on headfirst.
This fear of failure, has created an inertia and a lack of innovation.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style... and why?
MakeMyTrip - because I worked there for over eight years and loved every minute of it. Also, MakeMyTrip knows how to get the job done and adapt to changing circumstances rapidly.
I joined MakeMytrip in its startup phase and was witness to how agility and responsiveness can give a startup the first mover’s advantage in a market space as dynamic as the travel industry.
Tnooz view
At a time when hoteliers are increasingly facing direct and indirect competition, commissions going up, and with Airbnb-type businesses enabling non-hoteliers to become hoteliers, it is important for hotels to have the best technology to market themselves better, increase visibility and drive more direct bookings.
Commeasure's decision to focus on small, boutique and independent hotels obviously makes perfect sense.
I have spoken to a number of independent hoteliers in India in various conferences. A vast majority of them mention the need for direct and online bookings as their priority.
For example, I know of an independent hotel (recently launched) in Bangalore that offered its costliest room (President Suite) worth Rs 7,500 for Rs 2,000.
This was when the hotel was not listed on any OTA channel. But, the hotel's direct website channel was open.
A month later, I inquired for the same President Suite at the hotel, and this time the front desk incharge quoted the full price of Rs 7,500.
When I asked the reason for this price, I was told that the hotel was listed on major Indian OTAs, and it was running on good occupancy numbers, so the hotel stopped offering discount. Thus is the dependency on OTAs.
Hotels very much see OTAs as friends - here and here.
When some star hotels such as Leela Hotels and Taj Hotels doesn't have good mobile presence, one can imagine the amount of help needed by small and independent hoteliers.
Commeasure's client base of 15 hotels within two months of its launch is a decent enough start. But it does face incredibly stiff competition.
Also, the founders profile - one into hotel business side and the other into hotel technology - makes it an interesting team.
Vine video of Commeasure