Bangalore-based RoomsTonite places itself under the startup pitch microscope with a refreshingly straightforward proposition - it connects travellers looking for a room with hotels in India which have last minute availability.
This is hardly a breakthrough in business thinking - the original dotcom darling in the UK was called "lastminute.com" so even before 4G and smartphones, the idea of using tech to help hoteliers sell rooms that would have remained empty was part of the digital vernacular.
Fast forward fifteen years or so and while the technology has improved, the fundamentals remain. Every night of the year, quite a lot of hotel beds are not slept in.
This is where RoomsTonite comes in. Mobile adoption in India is high, and RoomsTonite is an app-only business. The thinking is that people who turn up somewhere without having booked a room will expect there to be an app to help them book.
Here's the Vine submission, followed by the Q&A and Tnooz's view.
1. Tell us how you founded the company, why and what made you decide to jump in and create the business.
Suresh John, the CEO of RoomsTonite has been in the hospitality technology industry for the past 25 years. Having launched two successful hospitality technology companies - IDS Next and RezNext - he saw a huge gap between the hotel supply and demand in India, especially when it comes to last minute travel.
For the past five years in India, the average occupancy rate across hotels in India was only 60%. With the spending power increasing among Indians, more and more people looking for short breaks, and mobile adoption is skyrocketing, John observed a clear opportunity to merge the gap between people who are looking for last minute hotel stays and hotels wanting to sell their unsold rooms at the last minute.
In June 2014, RoomsTonite, a mobile-only last minute hotel booking app, was beta launched. The adoption of RoomsTonite since then has been very encouraging. We came out of beta version in December 2014, and we now have an app for both Android and iOS platform.
2. Size of the team, names of founders, management roles and key personnel?
We are about 40 Toniters (we proudly call each of our employees as 'Toniters') strong now. But we are still looking for talent in the areas such as Android and iOS app development, sales and others.
RoomsTonite was founded by Suresh John, other key people in the company are:
3. Funding arrangements?
- Karthick Prabu - heads the product
- Subramanian Paramasivan – heads technology
- Mathew Chacko, Dhanya Nair - heads hotel signups and alliances
- Prakash Mahato - heads revenue management
- Manoj Kandasamy - heads marketing
We are self funded for now.
4. Estimation of market size?
Currently, we are focused on the Indian market. But, very soon, RoomsTonite will be expanding to regions outside India too.
When it comes to the market size of last minute hotel sales, it is over a $5 billion (yearly) opportunity in India alone.
Our core competitors include OTAs and other similar last minute businesses.
6. Revenue model and strategy for profitability?
We take a small transaction fee from the booking that we send to our hotel partners.
7. What problem does the business solve?
RoomsTonite is a mobile-only last minute hotel booking app.
For consumers, whenever they are in need of a hotel stay (for today, or tomorrow), they will be able to get a good quality hotel at great rate from RoomsTonite platform. So, customers don’t have to plan their hotel stay in advance.
For hotels, we are a platform to sell their unsold inventory (which otherwise would have been empty) at a good deal. So, hotels can earn additional revenue through RoomsTonite, and therefore increasing their RevPAR.
Other major benefit for hotels is the direct connect that RoomsTonite has established with majority of its hotel partners’ PMS system – IDS Next. Because of this two way connectivity, a booking made in RoomsTonite platform will automatically be available real-time in the hotel’s PMS.
We are also in talks with few other companies channel manager / PMS companies to establish seamless connectivity between hotel reservation / management tools and RoomsTonite.
8. How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
We did not pivot from the original concept of building a mobile-platform for on-demand hotel booking :)
However, during the journey, we explored the option of a mobile website as additional channel for RoomsTonite, but after considering various parameters, we decided to stick only with a mobile app channel.
9. Why should people or companies use the business?
At RoomsTonite, before we bring a hotel onto the app, the hotel goes through a stringent quality check process. Various parameters such as the hotel’s review rating, actual reviews (yes, we read the reviews too) and management response, are considered. We ensure that only top quality hotels are available, and the prices of these hotels are very competitive. So, customers can book a top quality hotel whenever they wish, at a great deal.
At the time of writing, we have 1,000+ handpicked hotels across 200+ destinations in India.
For business travellers, RoomsTonite offers multiple benefits including great saving (about 25% on average) on the hotel stay expense, the flexibility of booking a hotel only when needed, and giving the employees a wide and better choice of curated hotels to stay with (at the current or cheaper cost).
Also, we recently rolled out a new service called RoomsTonite Assist, a 24x7 travel companion service to help travellers with enquiries and specific needs in all stages of travel: Pre-stay, during hotel stay, and post-stay.
RoomsTonite Assist service is aimed at enhancing customer comfort and experience - it offers solutions from informing the hotel about an unexpected flight delay to purchasing movie tickets, sending couriers, co-coordinating with the hotel on any special room requests, locating the nearest restaurants and entertainment to booking a taxi, among other value added services.
For RoomsTonite customers, this service is free of cost and can be accessed by a call or email. Charges are applicable on actuals such as cost of the movie tickets, taxi fare, etc.
10. What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We started our marketing activities only in January 2015. We deliberately didn’t spend or start marketing from June to December 2014, because we wanted to see RoomsTonite grow organically, learn about market adoption and tweak the offering.
Now, we're leveraging Facebook and other ad networks for growing RoomsTonite.
We’ve also started our content-focused initiatives to increase brand awareness.
11. Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
Three years from now, RoomsTonite will be the most preferred on-demand hotel booking market leader in India, Middle East, APAC, and parts of African market.
a) When we expand to regions outside India, there will be a number of challenges in the product - because we should cater to the local market’s need and expectations but still maintain the simplicity of the app.
b) Competing with OTAs and other similar business companies in the regions is always a challenge - we need to offer and we will have a unique value proposition to overcome this challenge
12. What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
There is nothing wrong as such; just that there is a market need to bridge the gap between (daily) unsold hotel rooms and customers looking for impulse travel. RoomsTonite has addressed that need and has already started to narrow this gap.
13. 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?
In terms of product engineering and service delivery, we would like to have a brand recall like Uber.
14. Which company would be the best fit to buy your startup?
We intend to build and grow the business across the globe. However, likely partners in the future could be global OTAs ot travel conglomerates among others.
As mentioned in the introduction, last minute hotel bookings have been part of the e-commerce world from the very beginning.
So while other start-ups are falling flat on their face trying to solve a problem which doesn't exist, Rooms Tonite is operating in a sector where there is clearly identified supply (hotels looking to sell rooms) and demand (travellers).
But such an established marketplace is inevitably crowded. India's accommodation sector is fragmented enough for the big two (booking.com and hotels.com) to be less dominant than in other markets. This might give Rooms Tonite a head start.
RoomsTonite also checks the properties on its list. A curated approach might work better than the scattergun approach of other businesses.
Its RoomsTonite Assist program reinforces the curation element to what it does, giving it another potential differentiator.
The mention of business travellers is interesting - often people looking for a room tonight are frustrated roadwarriors rather than holidaying pals. Identifying and marketing to different types of last-minute travellers will help.
And in such a crowded marketplace, these small differences could end up being greater than the sum of their parts.
NB: Disclosure - Karthick Prabu was general manager for APAC at Tnooz from March 2013 to September 2014.