The problem is familiar to many business travelers: every hotel near the convention's location is sold out, and the only way to secure a last-minute opening is to re-search regularly.
Hotel Room Alerts is a new travel startup that faciltates these sorts of sold-out hotel situations. The team, which consists of founder & CEO Dylan Loch and co-founder & Sr. Engineering Lead Miko Borys, has built a system that automatically checks specific stays for ongoing availability. An email and/or text message is then sent out when a room has become available in a particular search submitted by a user.
A new app has brought the product onto mobile, potentially increasing the utility for users to successfully complete a booking for a newly available room wherever they may be at the time.
The team has locked in investment and advisement from iCap Performance Partners, LLC, and shares more about the product below.
Tell us how you founded the company, why and what made you decide to jump in and create the business.
In June of 2013, Dylan and his girlfriend celebrated their 2nd anniversary of dating. He wanted to take her on a nice getaway for the weekend, so he started researching hotels in the area. He found a great deal on a room with a queen-sized bed.
After procrastinating booking the room for a week, he logged onto their website to book his room and realized that the room he wanted was completely sold out. He freaked out, called the hotel, and they told him that the best way to get that room was to call the front desk every day, check their website, and download their app to check during the day when away from his desktop.
He was forced to book a room that had a king sized bed, which cost him an extra $150 dollars. He checked their website numerous times per day for, we kid you not, an entire month before something finally opened up. He immediately booked the room, saved himself $150 dollars (that he ended up blowing on dinner and wine), and had a great weekend.
He thought to himself that their had to be a better way to go about getting a room at a sold out hotel, and after doing several hours of research, was shocked that their were no services to help with that problem. He utilized a similar service in college that helps students obtain seats in a completely booked up class by sending out text message alerts, and he immediately realized that this would be a perfect solution to this problem in the hotel industry.
He pitched the idea to our now current Sr. software engineer, Miko who had previously created a class alert service for Virginia Tech. He loved the idea, and began coding our website that very night.
Miko and Dylan make a fantastic team together, and work collaboratively in order to maintain maximum efficiency from an operational as well as financial perspective. Having both a lead software engineer and business manager as the founders of the company incited us to jump in and turn this idea into a functioning reality.
What are your funding arrangements?
We partnered with iCap Performance Partners, LLC in order to fund the development of our mobile application and infuse capital into marketing and advertising our products and services – we have not spent any of the capital on marketing and advertising yet, therefore all of our growth has been via word of mouth and organic SEO.
What is your estimation of market size?
Our service will benefit travellers worldwide, which encompasses a market of over 1 billion annual travellers.
Who do you see as your primary competition?
Our service is first to market and the first of its class. Therefore, we currently do not have any direct competitors offering a service that rivals ours.
What is your revenue model and strategy for profitability?
We are currently affiliated with several OTA’s. When we alert users of availability, we provide a direct link to the user’s desired hotel room via our affiliates, and we receive commission when our users book through our affiliate links provided.
What problem does the business solve?
We solve the age-old problem that travellers worldwide have had for hundreds of years: trying to obtain a room at a sold out hotel.
Prior to the creation of our service, individuals were told that the best way to obtain a room at a sold out hotel is to continuously call the hotel’s front desk or check their website for availability until they find an opening.
Our service alleviates the stress associated with trying to find an opening at the hotel because we have developed a software solution that continuously checks for availability online and sends automated e-mail, SMS text message, and push notifications the moment that our user’s desired hotel room becomes available.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
We initially charged $0.99 per hotel room added to an order. We noticed that we were experiencing a 48% bounce rate once users reached the check out page where they were to submit payment for our service.
We realized that that it would be more beneficial to gain as many users as possible, so we removed the fee from the service and now offer it completely free so that everybody has access to our service, and we also receive higher margins on hotel commission versus the initial start-up fee.
After removing the fee associated with creating an order, we experienced significant growth in our user base and customer satisfaction.
Furthermore, we were only offering the service on our website, http://www.hotelroomalerts.com for the entire first year of operating. We just recently launched our mobile applications on both the Apple iOS and Google Android platforms. The mobile app, “Hotel Alerts” allows users to search hotels by utilizing the map view so that they can see which hotels are available vs. sold out in any specific location. It’s like having a front desk manager in their pocket.
Why should people or companies use the business?
Both individual travellers and companies should use our service because we relieve the wasted time and stress associated with trying to find a room at a sold out hotel.
Most travellers, specifically business professionals, have loyalty programs at specific hotels in which they consistently stay at. We will notify that traveller when their desired hotel becomes available so that they can continue receiving loyalty points at their desired hotel instead of having to stay at a new hotel where they have no affiliation.
The hotels themselves will want to utilize our service because we help fill their vacant rooms that become available due to last minute cancellations.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We are currently reaching out to travel bloggers and major publications that are passionate about travel and finding new services that make travel more efficient and effective. We’re looking to grow organically via word of mouth before we start infusing capital into a large-scale digital marketing and advertising campaign.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
In three years time, we anticipate our company to be the preeminent provider of all hotel availability services. No longer will travellers be forced to use meta-search websites or call hotel front desks to try and find a room to stay at because we will provide a one-stop-shop for all hotel availability.
The largest challenge we will need to overcome is spreading the word about our service to travellers worldwide. We have received several thank you notes from users once they utilize our service because they’re so thankful that we have solved this problem. Therefore, once we can create widespread exposure, the problem associated with finding hotel availability will be non-existent.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
The problem is that there is currently no service that notifies people when their desired hotel becomes available. Most hotels do not even have a waiting list that notifies their guests when their desired room becomes available.
Furthermore, even when a waiting list exists, it seldom occurs that the guest will even hear about the availability. Because our software checks for availability electronically, we can notify users the very moment that their desired hotel becomes available which is quicker than a front desk manager picking up the phone and calling a guest on the waiting list. This also serves as an added benefit to the hotels because they will not need their front desk managers spending their valuable time calling guests on a waiting list.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style... and why?
We would align our company with that of Uber. Uber is a brilliant idea that has revolutionized the way people utilize transportation services. They created an idea as simple as a taxi being ordered to the user’s current location instead of the user flagging down a taxi. It’s a service that makes peoples’ lives easier, and we’ve created a service that aims to do the same.
Which company would be the best fit to buy your startup?
Expedia, Inc. All of the major OTA’s compete against each other to provide the lowest rate, best customer service, most hotel inventory, etc., but what really sets them apart? If one of those OTA’s provided a service that notified users of hotel availability, it would set them head and shoulders above the rest.
Describe your startup in three words?
Filling every vacancy.
Tnooz view:
While it's not entirely clear that travelers hundreds of years ago struggled with sold out hotel rooms, the team has definitely identified an ongoing problem that has a straightforward technology fix. And while 1 billion travelers is clearly too large of an addressable market, there is definitely a solid niche in travel for the service.
Similar to the way TripBAM recognized an inefficiency, Hotel Room Alerts uses technology to identify better opportunities.
Unlike TripBAM however, there is less of a business-to-business use case that clearly saves money for a business. At its surface, this product is much more geared toward the independent business traveler and leisure traveler seeking a sold-out room. Deeper down, it's possible that this product would be a good app for travel agents and corporate travel managers to keep track of potential vacancies for travelers.
It was a smart shift from an upfront fee to a straight commission model - assuming of course that an open room is booked through the service. If the room alert doesn't convert (for example, if the traveler books elsewhere), then the startup will have an uphill battle on the revenue side.
This also seems to be more of a feature than a company. Of course, this doesn't mean a healthy lifestyle business or new products couldn't be created to further differentiate. It's just that an OTA or agency could divert some resources to this problem and offer a similar branded product for their own users.
Hotel Room Alerts must work diligently to create a loyal community that comes back to its specific product, and start building competitive advantage via loyalty, robust inventory and best-available pricing.
NB: Sold image courtesy Shutterstock.