Emerging travel startup XciteGo has created a new type of marketplace for hotels and travelers, where travelers can bid in an open forum for hotel rooms alongside hoteliers offering hotel rooms.
This is a stock market style mechanic, where an offering is made by the party owning the inventory and a bid is shared by the party seeking access to the inventory.
From the site:
XciteGO is creating a marketplace Xchange for hotel rooms where buyers and sellers interact in real-time, just like the stock market. With existing travel websites, travelers must accept the prices as offered or go through a blind bid process hoping to get the price they want.XciteGO enables travelers to create bids for their desired bookings in a transparent Xchange and connects them to obtain group rates. Simultaneously hoteliers can directly “shop” these bids and accept them anytime or compete to offer the lowest prices.Our patent-pending Xchange connects hoteliers with ready-to-go buyers enabling the rapid and cost-effective sale of rooms and last minute expiring inventory.
The technology is the key to the concept, as this is what drives the ability for both hoteliers and travelers to list, and bid on, inventory.
The Tnooz questionnaire follows the brief Vine explaining the startup's concept.
Tell us how you founded the company, why and what made you decide to jump in and create the business.
We wanted to help doctors sell expiring vaccines to patients that were willing to pay less for perishable product but act timely. When we thought of how to dynamically have supply meet demand we realized that there is no "actual demand" that can be viewed and "shopped" so sellers can "unload" unsold inventory on demand. So that realization lead to a pivot towards XciteGO.
What is the size of the team, names of founders, management roles and key personnel?
We currently have less than 10 employees with Barry Hayut as the Founder and CEO, Kathleen St John as Product and Intellectual Property Manager, Minesh Patel as CTO and Paul Harrison as Director of Business Development
What are your funding arrangements?
We've raised $420,000 from angels.
What is your estimation of market size?
Approximately 37% of hotel rooms remain vacant every year forfeiting over $70b in lost revenue annually.
Who do you see as competition?
We see Priceline, Expedia, Orbitz, and HotelPlanner as competition.
What is your revenue model and strategy for profitability?
We charge a flat 10% commission on hotel room sellers each time a transaction is consummated.
What problem does the business solve?
For travelers: There is no online forum that allows travelers to place bids (auction style) for desired hotel rooms bookings and get connected with same minded travelers in order to get what they want and also combine purchasing power to be more attractive to hoteliers.
For hoteliers: For the sellers they don’t have a marketplace exchange in which they can shop the travelers and sell/liquidate rooms on demand by accepting bids by ready-to-go buyers. There is an annual loss of $70 billion for unsold hotel rooms in the US alone.
So our solution is a marketplace exchange where buyers compete to place their highest bids and sellers compete to offer their lowest prices in a bilateral view. Both the buyers and the sellers can shop each other simultaneously in real time to consummate a transaction at efficient market prices.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
The idea began as a solution for doctors to sell expiring drugs. It evolved to a real-time marketplace that connects buyers and sellers directly in order to create efficient pricing. We pivoted to the hotel industry because we believe our platform is versatile and can be used in many verticals such as wellness, products, and many other services.
Why should people or companies use the business?
Hotels, property management companies and individual travelers should use XciteGO to sell more hotel rooms, have more control over their prices removing the middleman, better manage their inventory while travelers utilize the marketplace as a tool to increase their market power. and even receive group discounts.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
Reaching out to hotels and property management firms, growing our partner network. We will partner with music festivals to get their attendees the best rates possible. Also we are heavily marketing to Atlanta, GA travelers in order to become the premier booking engine for travelers entering Atlanta.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
We want to be at the forefront of all transactional purchases. Our app is completely translatable to nearly every industry where buyers and sellers come together. We are removing the middleman and placing the purchasing power as well as the entire market demand into the hands of the consumers. What industry wouldn’t want that?!
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Today’s solutions are seller-centric solutions only presented by middlemen OTA's like Expedia, Priceline, Hotels.com and etc with no control over pricing structure given to hotels themselves. Additionally, there’s no forum for real-time, NASDAQ-like exchanging for buyers and sellers to come together.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style... and why?
We (like most startups) like to see ourselves as a young, eager startup ready to take on the world. We have fewer than 10 employees but each one brings his or her own specialty to the the table making us a well-rounded eager beaver.
We may align ourselves with HotelTonight, Uber and maybe Airbnb because of their gradual yet grandiose rollout, while at the same time we are more similar to Amazon with its ever-growing presence into more and more markets.
NB: The stock market image courtesy Shutterstock.