TLabs Showcase on travel startups featuring UK-based accommodation rental site and network MyFriendsHotel.
Who and what are you (including personnel and backgrounds)?
MyFriendsHotel is a peer-to-peer online marketplace for renting accommodation. Independent property owners can list anything from a spare bed to a luxury villa for anyone to rent. Hosts can make some extra money from their spare space, while Guests save money on hotel costs and get a trusted local travel experience.
We connect people and places by considering three personalities: the host, the guest and the property; our intuitive search features make it simple to find properties to suit you.
I was born in Hong Kong and have lived in 8 different countries. Personal experience has shown me that local hospitality is a great way to get under the skin of a city or country. The website connects like-minded people, using the internet to open up the realms of travel so that we can all find unique and interesting places to stay around the world.
Prior to founding MyFriendsHotel, I worked as a product development manager for Fremantle Media. My love for travel and my ten years experience in new media prompted me to develop this site and plug an obvious gap in the market.
What financial support did you have to launch your business?
The website is boot-strapped. This was a once in a lifetime, go-for-broke, opportunity. My passion is travel and my extensive experience in this area, combined with my love of innovation, prompted me to take the plunge.
What problem are you trying to solve?
We connect people and places by considering three personalities: the host, the guest and the property.
By enabling more intuitive searches more relevant properties are found, and a bit like dating, by matching the right property to the right person we aim to achieve more repeat bookings. This means, happier customers, memorable holidays and real friendships between likeminded people.
Matching people and places through location and interest offers a much more meaningful and long-term solution. In that respect we are unique.
Recent statistics by PhoCusWright show that 78% of holiday renters are more likely to book accommodation which has a review and 73% of referrals for owner rented accommodation come from friends, family referrals and previous guests.
MyFriendsHotel is really focused on catering to and capturing this market
Describe the business, core products and services?
We provide a secure platform for hosts and guests to list and rent accommodation (anything from a sofa-bed to a villa).
Hosts and guests create a profile on the site and choose their interest tags. These tags link Guests to Hosts. In total, there are over 200 tags to link hosts, guests and accommodation.
- Holiday type
- Property type
Host and guests are able to communicate openly on the site (by writing on a profile wall or using our private messaging service), and our booking system is secure.
When a guest pays they receive a Unique Verification Code, which they give to the host at check in.
This code then allows the Host to activate payment. The host is paid 24-48 hours after the code has been activated. This protects everyone from fraudulent activity.
Payment is managed through PayPal credit cards are accepted and bank details are traceable if necessary.
Feedback is 100% genuine as only hosts and guests who have booked through the site are able to leave feedback.
The website also allows Hosts to only show their profile to friends should they require this privacy. This allows people to offer 'mates rates' to friends or by using our HTML badge* members can target their own niche audiences.
We also have a charity option for hosts who are using our service without requiring any financial gain. In this instance, MyFriendsHotel will also donate its proceeds to charity.
Who are your key customers and users at launch?
- Hosts – are 25-70+ but outgoing, adventurous and interesting people who like the idea of meeting or accommodating travelers.
- Guests – they vary a lot and are slightly younger than hosts. We appeal to anyone from a musician on tour, to businessmen wanting a change of scenery.
The common denominator is members tend to be outgoing, positive thinkers who enjoy meeting people.
Did you have customers validate your idea before investors?
Yes. I conducted thorough market research prior to initiating this project and also had statistics from PhoCusWright indicating a significant market opportunity.
I am also a traveller and a homeowner so I recognised the gap in the market from my own experience.
A few websites offering a slightly different proposition have sprung up since we first came up with the concept. We now need to work smarter and faster to build our customer base and position our self in pole position.
To do this we are improving searches and developing unique tools to help members find trusted places to stay.
What is the business model AND revenue model, strategy for profitability?
The site is free to join. It is also free for hosts to list accommodation. Hosts only pay when they make money.
Hosts are charged a 10% fee on the cost of a booking. Guests are charged a £3/Euro 4/$5 booking fee (dependent on the booking currency).
We felt it was more open to charge the host the commission rather than adding, in some cases up to 15% (+3% to the host) to the cost of a property at the point of purchase. Our business model makes us cheaper for guests.
SWOT analysis list under each title strengths, weaknesses, opportunities & threats?
- By connecting Hosts, Guests and Properties through Interests we offer much better search criteria.
- The current economic climate also works in our favour as more people are having to find ways to save money or to cover the cost of their mortgage.
- We're innovative and driven by the customer not the shareholder.
- We are also a green travel solution by better utilising existing accommodation and utility resources.
- 20% of people travelling have no destination in mind when initiating their holiday search, so we're a great place to start and search by interests!
- We have a good, strong brand to build on which in a competitive market place is really important. What’s more, having "Hotel" as part of the name is a real SEO gem!
- Being self-financed is difficult with a long tail idea such as this.
- Being such a small company there are not enough hours in the day!
- Competition is growing and soon the public may not be able to differentiate between us all.
- There is a growing awareness of 'homestays' as being legitimate and trusted accommodation alternative.
- As our network grows, the benefits to our community will also grow, through our new development tools. We’re not worried about scalability, as we’ve built the site to accommodate the personalities of the host, the guest and the property right from the start. As the number of ourlistings increase, we’ll be able to present properties and hosts that are more tailored to a users’ personal requirements. As such, few search results will ever be the same. This makes us different to the competition in a fundamentally important and useful way.
- We offer a service that is useful and interesting to a global audience.
- We're now a working website and are able to improve and develop the services we provide.
Who advised you your idea wasn’t going to work and why didn’t you listen to them?
- Laws may be introduced in major cities to prevent short-term rentals - such as the new legislation in New York.
- Competition is growing, especially now that big players are showing and interest in this previously niche sector.
- Safety is always an issue for any traveller and we will do everything possible to minimise the risks in our community.
Nobody blatantly said the idea wouldn't work. A Fortune Teller in Hong Kong said it would be a long road and hard work. He was right and maybe I should have listened!
What is your success metric 12 months from now?
To be profitable with an organically growing membership base. This would indicate that we’re offering a useful service and that the community is happy!
Here is a clip explaining the MyFriendsHotel concept:
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.