Hotelsoft claims to be a next generation, cloud-based software and services company, providing revenue management tools for hotels.
The company is based in the San Francisco Bay Area and has a development office in Bengaluru in India.
Hotel veteran and co-founder Vish Bhatia came up with the idea "on the back of a napkin" at a bar in San Francisco International Airport, apparently frustrated at the lack of "intuitive solutions" in the hotel sector.
He joined forces with Abhishek Begerhotta, who was having similar experiences in the healthcare industry.
HotelSoft recently raised $3 million from a combination of founder and unnamed angel investment.
A Q&A with co-founder Vish Bhatia:
What problem does your business solve?
The genesis of Hotelsoft came from my experiences as a VP of revenue management at a mid-size hotel chain and the frustrations of my team, as we always seemed to lack the information needed to make effective pricing decisions in real time.
So I asked the question, what if there was a platform that could give me all the information I needed such as what are the booking windows by market segments and the key accounts, what are their lengths of stays, which accounts are under-performing, what is the pace by segment, what is the market demand outlook, what are the airfare trends, what are the pricing trends of my compset and the local shared economy, what’s my financial forecast and more?
So we spent our first year as a consulting firm, while looking for a solution which answered all these questions and yet was affordable.
There was none. We figured if I have these issues there may be thousands of other hotels facing similar challenges, and thus Hotelsoft was born.
We are trying to solve three basic problems facing the industry today:
- Data isn’t readily available
- Forecasting is a big issue with most systems today – they don’t understand hotel demand or anticipate market influencers accurately enough leading to incorrect forecasts and thus pricing
- Lack of uniform data has created information silos which is hurting profitability of the hospitality industry.
While the recent debate has been around the fact that it may not be important to consider demand based pricing and the sales pitch is now moving to just external signals, we believe that it is dangerous to adopt such a narrow view.
Hotels can’t ignore organic demand while looking at weather patterns and air lifts. We believe in a hybrid approach, which begins with understanding true organic demand for the property, layering in market demand signals and taking a holistic approach to pricing.
We call this Intelligent Pricing.
Hotelsoft One is our flagship integrated Revenue Management, Business Intelligence and Rate Shop platform that uses Intelligent Pricing big data and machine learning algorithms, which incorporates organic demand with external influencers such as compset pricing, airfare, city events, Tripadvisor ratings and other third party data to make smarter pricing decisions.
Rate Shop data includes rates from all major OTAs, hotel websites, vacation rental sites such as AirBnB, Homeaway, VRBO, wholesalers and other travel partners.
Names of founders, their management roles, and number of full-time paid staff?
We have a team of 15 spread across our San Francisco Bay Area headquarters and our India office, which is our development centre.
- Abhishek Begerhotta – CEO and co-founder
- Vish Bhatia – President and co-founder
- Kesav (KK) Kolla – CTO and co-founder
While Abhishek takes on the role of strategy, VP engineering and administration, I handle product management and business development. KK is our truly outside the box CTO – a great technology architect and a veritable design thinker.
We are anticipating hiring additional 15-20 development resources by the end of this year.
Funding arrangements?
We have raised a total of $3 million in founder and angel investment rounds. Our seed round was $1 million and recently we raised an additional $2 million in equity capital.
Revenue model?
We have revenues from two sources – one from software products and the other from professional services and consulting project engagements.
Rzr RMS, Rzr BI and Spydr Rateshop are subscription fees products based on the number of keys in the hotel.
We intend to have rapid implementations, which we believe will also help to democratize the platform.
Professional services are either project based or on a monthly retainer, where we provide a wide range of services from being a hotel’s acting DORM to project management to providing strategic consulting to ownership groups.
Why do you think the pain point you’re solving is painful enough that customers are willing to pay for your solution?
We have found similar issues in large as well as smaller hotel companies. I have been on various panels and conferences and the pain is evident.
There are silos in hotels, information is not easily accessible, there may be data but revenue managers spend hours putting this data together on spreadsheets and not enough time analysing it, and thus forecasts are way off.
Demand cues are missed and revenues are lost.
We believe machines should do the hard work; DORMs and hotel GMs should focus on strategizing and ultimately on the guest experience.
Our mission is “to drive more revenues and to make hotel teams more productive”.
Hotelsoft’s unique proposition is two fold:
- Hotelsoft One: an integrated software comprising of Rzr Revenue Management System (Rzr RMS), Rzr Business Intelligence (Rzr BI) and Spydr Rateshop, built around consolidated workflows of revenue managers and hotel revenue strategy teams.
- Intelligent Pricing: a unique patent pending Big Data and Machine Learning econometric model. Our algorithms also calculate incremental revenue gains from pricing decisions so owners can see real monetization of the system.
External validation? (Examples: The incubators/accelerators you have been accepted to, the mentors who are advising you, the number of customers you’ve signed, the marketing partner deals you’ve made, the skills/connections of your founders, etc.)Abhishek, who is our CEO, is also a serial entrepreneur and currently has a 135-people successful healthcare IT business in the San Francisco Bay Area.
Hotelsoft has been incubated out of the same offices and we have a strong infrastructure support to deliver on our brand promise. We have setup our development and global delivery centre in Bengaluru and have recently raised additional capital to grow our team.
We already have approximately 40 hotels signed up across our platform and services in the US and in India, who have helped us shape the product. We anticipate growing to 150-200 hotels over the next twelve months.
While our platform has Google-like scalability to handle large amounts of data and multi-tenancy, we are currently focused on midsize hotel chains, boutique and luxury hotels.
Short video pitch here:
Tnooz view:
Any travel newbie that launches with a B2B offering should be applauded - not least as the likelihood of success is markedly higher than those that try to enter the consumer-facing space.
And with the global inventory of hotels contining to grow, there is clearly scope for a company like HotelSoft to make some inroads.
It's competitors might have something to say about the claims about an apparent lack of already available tools that HotelSoft has now created, yet the size of the market dictates that there could be room for a number of players to operate.
The challenges for HotelSoft are still obvious: reaching potential customers (it will be at HITEC this summer, so that's a decent start); going up against established players; and appealing to chains (rather than independents, with their lower footfall).