Chile-based startup myHotel has created a mobile app for hotels that doesn't hinge on a specific hotel group, chain or location. The app is downloaded by the traveler, who can then use the same app across properties - regardless of hotel brand.
This is a different approach than individual hotels creating an app that must be downloaded or a mobile site that must be accessed via a guest's smartphone, and it allows for a faster development cycle for new features as the startup can roll out the updates to the app which then trickles down to each partner hotel.
The challenge here is on-boarding enough hotels to make this as useful as possible to the traveler. Even without many hotels on board, the app still has utility, so even just signing up one new hotel has a deep impact on customer acquisition.
The more travelers that are happily using the app, the easier it will be to sell hotels on participating - and of course, more hotels means higher user penetration among guests. A virtuous cycle that has it's own type of network effect, as the product is expanded as more hotels integrate more deeply with the functionality.
The app is currently deployed at several hotels in Chile, including the Renaissance Santiago.
The team's consumer-centric approach to creating a single app that can be used at different hotels is highlighted in the video and interview below.
Tell us how you founded the company, why and what made you decide to jump in and create the business.
As travellers we’ve always thought that technology is underused in favour of improving our stay inside hotels. We have always faced some sort of communication problem during our stays. We realized as guests that we needed information and answers fast because you don’t want to ¨lose¨ time figuring out how to get things, you just want to enjoy them.
That's how we decided to develop a mobile app service starting inside hotels. We want to help people traveling from the moment they book until they leave the hotel, so they can enjoy the experience without worrying about how to get things. Time is the most precious element for a traveller and we are changing their experience through this mobile private travel assistant.
What is the size of the team, names of founders, management roles and key personnel?
We are a Start-up of 7 people. We are three founders: Daniel Dughman (CTO), Sebastian Giacoman (CMO) and Felix Said (CEO). One of our key elements is Alejandro Muñoz, one of the most talented programmers that can materialize any crazy idea we come with.
What are your funding arrangements?
We are part of a Chilean incubator that gave us money and contacts. We also have an angel investment group behind us. The company is controlled by the three founders.
Please share your estimation of market size.
We estimate a 2 billion annual sales market, based on the number of 4 and 5 stars hotels that could be part of a system. The number grows bigger if you figure out how to get to smaller hotels.
What is your competition?
Our main competition are other mobile apps designed for hotels and independent developers.
Please describe your revenue model and strategy for profitability.
Our revenue model is designed to give flexibility for our clients. Basically we charge a monthly fee for the usage of the app to hotels. We are looking for channel partners to grow faster as we believe that the true value is to position ourselves as “the mobile app” for hotels. Our mission is to create one mobile app that works inside any hotel, giving people a universal tool to really create value on any journey they take.
What problem does the business solve?
Guests face lack of communication with their hotels, especially before they arrive, leading to a lower RevPar and client in satisfaction. Even for the most planned visitor, there are lots of issues and uncertainties to solve before and within their stay: How do I get to the hotel? Will my room be ready? What are the schedules of the facilities inside the hotel? What is there to do?
People hate uncertainties, especially when they have paid a 5 stars hotel outside their country. They need a communicational interlocutor that they can trust to solve this problems. However, the hotel doesn´t have the resources nor the channels to attend all these needs. That’s where mobile technology plays a key role.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
At first, we were a mobile app to send requests to the hotel within your stay. Today we have realized that people need to be attended even before they arrive. That’s why we are evolving to an app that accompanies traveller from the moment they book until they leave. This includes information and requests; from essential information to taxi or food requests.
Why should people or companies use the business?
People should use our mobile app because it simplifies their life when travelling. You can worry 99% of your time while working and saving money to travel, with MyHotel is like have a personal assistant for the only moment that you don’t need any worries. On the other hand, hotels should provide this system because it permits them to know better their customers and offer a better service. It automates several processes liberating resources for providing a better service quality.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
For customer acquisition we are creating sales channels through established technology vendors in the hospitality business. We want to create a new revenue source for them, expanding the solution quickly. For user acquisition we are using the hotel as our main marketing platform. Hotels are the single most attractive vitrine to get to travellers when they are willing to use this service and we are using this channel.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
We want to position ourselves as an industry leader in South America and the US. For that we will have to create interesting expansion models through partnerships. The main challenge is to choose the right alliances at the right time in order to grow exponentially in three years.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
The hospitality industry needs technological partners solving old problems for them. Today they don´t have the time nor the resources to adapt to the major shifts in guests technological needs. As they have ignored this issue, massive business has been created (such as Trip Advisor, Booking, etc.) gaining bargaining power and earning a lot of money relegating hotels to a secondary position.
But the hotels should be the protagonists and they should look for solutions that partner with them because they are the ones that ultimately provide the real service. In that sense, developing mobile solutions that really create value for guests is a difficult challenge that must be addressed in order to regain their position in guests’ critical route.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style... and why?
We believe that we align with the vision of TripAdvisor because we want to improve people’s travel experience through technology. Culturally speaking, we feel close to the Google’s culture because we try to attract the best talent by giving meaning to their jobs and we defy the status quo in how things are done.
We want to show that we have enough talent in South America to compete with the industry leaders creating world class solutions in Chile.
The app space for hotels is a competitive one, not the least because hotels often prefer to control their own digital destinies. However, if the startup can sign up enough hotels, there will be a larger pool of guests to hook into the app. As guests use the app, they may become habituated with the process and want to use it at other hotels. So that's a smart move.
The key here is to make the app indispensable and wonderful to use for the guests. If the guests find it important, they will ask for it. Or at least give excellent reviews that the startup can then leverage in sales pitches to other hotels. Even brands with their own apps might then want to access the MyHotel community to provide better, more streamlined services.
Another chicken/egg situation, because if not enough guests are on the app, the incentive is much lower for the hotel to expend financial and time resources on integrating with the app.
MyHotel is definitely taking a different angle and will likely be a welcome addition for many independent hotels struggling to compete with the deeper digital expertise - and budgets - of the larger hotel chains.