Hôtels Privés is a members' only hotel deals service which offers hoteliers a commission-free platform and promotes direct booking.
The Paris-based business, launched earlier this year, says it wants to help people travel more via its discounted hotel rates.
Hôtels Privés was founded by Julien Laz, who set up online travel guide service Cityzeum (TLabs here) in 2010.
The startup is currently self funded but seeking its first round to the tune of EURO 500,000 to finish the first version of the platform, sign up hotels and create brand awareness.
While the hotel market is sizable, the company wants to offer a hand-picked selection of properties from tw0 to five-stars as well as include some bed & breakfast inventory.
The target is to have about 3000 properties on the platform by the end of this year and grow to about 40,000 properties worldwide in the medium term.
Hôtels Privés is facing stiff competition from online travel agencies which charge commission to existing private sales platforms, which also charge commission. However, the startup says that in its short history there are already more offers online on Hôtels Privés.
The company differentiates itself via its commission-free which it says enable it to offer real discounts on hotels. It is based on a classified ads model but will also offer, for a small fee, premium services to hotels such as visibility features, micro flash sales, last-minute sales and presence on affiliate sites.
Laz says:
"Hôtels Privés is aiming to be 10 to 20% less expensive than OTAs, more respectful than competitors on the hoteliers job, and is not acting as an intermediate since it links hoteliers to travellers. The platform is providing a Saas service where hoteliers will be able to publish flash sales and last-minute deals in a minute."
What problem does the business solve?
Being conscious that OTAs are today a must be place for hoteliers and that they have brought additional sales thanks to increased visibility, many hoteliers have nevertheless become OTA dependent through time.
Most of them are stuck in a position where they have to give up 15% to 25% of their rates through commissions, and at the same time, travelers not paying a “fair price” while booking online.
Hôtels Privés offers a tool for hoteliers to develop direct bookings via a platform that highlights special offers and links interested travelers directly with hoteliers. This solution increases hoteliers margin with a commission free model and offer better rates to customers.
Depending on the hoteliers strategy, this self-service platform helps them sell rooms at the very last minute, in advance or, all year round.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
In the early stages of Hotels Privés' development, the idea of offering special offers without any commission was widespread in many segments of the tourism industry (flights, resorts,...). Step by step, the idea was narrowed down to becoming a specialist in hotel offers.
Why should people or companies use the business?
Hôtels Privés offers different value for hoteliers and customers, a kind of virtuous circle we hope. As mentioned previously, it offers a flexible tool for hoteliers to increase their direct booking with a commission free and subscription free model.
The platform enables hotel owners to publish a special offer in a few minutes via a dedicated extranet. The offer is then moderated by the editorial team within 24 hours (or a few minutes…).
At the same time, hoteliers are offering attractive rates from 10 to 30% under public rates or exclusive services to the Hôtels Prive members. Some of them also offer exclusive amenities (upgrade, free breakfast etc.).
Hotels Privés is not a pure private sales player, with a restricted target of four to five-star hotel partners. Hotels from two to five-stars, EURO 50 to 1,000 per night, in France or outside of France are accepted willingly.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
Hôtels Privés is a digital native brand, so it mainly relies on word-of-mouth social media, mobile social media, (40% of traffic as of today, without an application yet), PR, social reward and SEO to raise awareness.
The team can already see this WOM effect thanks mainly to the novelty of its economic model.
The promise for the internet user is to have a 10 to 20% discount on public rates and exclusive amenities/services such as free breakfast, upgrades etc.
The service is quite young but it already partners with nearly 450 hotels. The number of special offers is already more important than in services provided by historical players in business for the past 10 years.
The company has also set up a partnership with Cityzeum Travel guides, that has helped 40 millions travelers in the past five years.
As a private consumer club, it will also benefit from a loyalty program with hoteliers and travelers.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
Hotels Privés is eager to become a reference in the hotel special offers market with several thousand hotels online from Euro 50 to 1000 per night. We plan to have more than 3000 hotels within the first year and, then time more in the coming years.
This is not so simple to achieve, we need more money to grow this metric rapidly.
The platform will have challenges to improve its level of service in the coming months to offer new synergies, creating tools for hoteliers to develop direct bookings (self service for gift box, micro flash sales, widget tools etc.) and to improve the customer experience.
Today, we distribute promo codes to end users, which creates some usability constraints. Going forward, we will try to make processing as simple as possible through the use of technology.
More broadly, Hôtels Privés’ ambition is to rebuild some kind of relationship between hoteliers and travelers and it is eager to generate a more respectful way to travel.
The most important thing is that we need plenty of other businesses like this to educate end users and help them buy directly at fair prices!
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Many hoteliers are OTA dependent today and can’t stand paying such high levels of commission to intermediaries.
Hotels Privés is not the first player to try to enhance direct booking for hoteliers but we can observe a lack of usability, SEO and marketing work on the various previous platforms, within our markets at least.
Moreover, many of them requiring an entrance fee or commission that doesn't fit for us with a policy of the intermediary's withdrawal in the booking process.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style and... and why?
Hotels Privés is today a unique concept in its market, representing a mash-up between classified ads, private sales, a coupon platform and an OTA.
It provides a way of booking to travelers, discounts as private sales websites do and a useful process for hoteliers to upload special offers with a dedicated extranet.
It is also building a unique coupon and CRM platform to manage its business. We are also looking at technologies and services take into account humans, their emotions and enthusiam, not to replicate a fear marketing strategy as some players do!
Tnooz view:
The strength of some OTAs in France has certainly created some bad feeling in recent years. According to a Reuters report, in in March the Economy Minister filed a complaint against an OTA for anti-competitive practices.
Other hotel booking services have also come under fire so perhaps the commission-free, direct distribution of Hotels Privés will gain it a lot of traction.
It will have to be backed up by a great user experience on the consumer end and simple technology for hoteliers at the back-end.
The startup will also likely again additional column inches as a result of its approach which will bring it to the attention of the hotel community and hopefully encourage more to sign up and publish deals.
Creating brand awareness among consumers will not be easy especially with the large OTAs and metasearch services such as Trivago throwing millions at television advertising.
The partnership with CityZeum will certainly help here as will the social media/word-of-mouth strategy but will it be fast enough?
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