TLabs Showcase on travel startups featuring US-based room-level hotel search engine Room 77.
Who and what are you (including personnel and backgrounds)?
- Brad Gerstner – founder and chairman. My day job is running a hedge fund called Altimeter Capital in Boston, but I’ve been in and around online travel as an investor and entrepreneur for more than ten years. Previously, I was co-CEO at National Leisure Group. Currently, I am on the board of Orbitz and other travel startups like Off & Away and Nor 1.
- Kevin Fliess – general manager and VP of product. Kevin runs the business day-to-day. He is also founder and former-CEO of TravelMuse, which was sold to Travel Ad Network late last year.
- Calvin Yang – VP of engineering. Calvin is the mastermind behind our proprietary technology. He was previously at Google and designed the company’s image search platform. After that he founded OpTrip, which is company that merged with Room 77 and still operates as a separate brand.
- Melissa Beauchamp – VP of partner relations. Melissa is leading the charge of building relationships with hotels. She joined us from Hotwire, where she ran supplier relations.
- Jason Bushman – VP of business development. Jason was previously with Orbitz and National Leisure Group.
What financial support did you have to launch the business?I provided initial seed round and opened it up to angels and institutional investors. These are recognizable folks, including Rich Barton (founder of Expedia and Zillow), Erik Blachford (former president and CEO of IAC Travel), Bob Pittman (founder of MTV), and Hugh Crean (former president and CEO of Farecast), among others.
Other investors include Par Capital Management, an early investor in ITA, Farecast, and Orbitz; Sutter Hill Ventures, which also invested in Farecast; and Felicis Ventures among others.
What problem are you trying to solve?
We are trying to give consumers more transparency and control around hotel rooms. There are a number of sites where you can find details and review about hotels and see images for “category” types, but when it comes to hotel room data it’s like a big locked box.
I have been personally peeved about this for years and finally assembled a team who could do something about it.
Describe the business, core products and services?
Room 77 has built the first hotel room database and search engine that can be accessed via the Web and mobile devices. As our core, we’re set on indexing every room in properties around the globe 3-star and above. We’ve already indexed about 425,000 rooms at 2,500 properties and we estimate there are about 5 million rooms in about 25,000 properties.
Our team has built some amazing tech and products: first our Room Rank technology ranks rooms in a hotel based on a traveler’s preferences and shows this by a percentage and color code. For example, a room that matches you preferences will be shown in green as a “strong match” at percentages above 70%.
One of the “wow” factors is our patent-pending virtual Room View, which simulates the actual room view from each room using an algorithm our engineering team designed using Google Earth and factoring in every room’s latitude, longitude and altitude. Based on our regression testing, this is remarkably accurate.
Our mobile app is a check-in lifesaver. Simply enter the room number offered by the front desk clerk and Room 77 will alert you whether you should “take it” or “leave it” based on how well it matches your individual preferences.
The app also makes it extremely easy to share data and feedback with Room 77 by just a few taps to rate the room and upload interior photos – or even the floor plan, located on the back of the guestroom door. We hope every traveler with an iPhone downloads it and sends feedback.
Who are your key customers and users at launch?
While Room 77 has appeal for any traveler who stays in a hotel, we are focused on power business and leisure travelers who are comfortable who book online and are comfortable with the latest Web and mobile technologies.
Did you have customers validate your idea before investors?
While we did alpha and beta testing, it wasn’t a hard sell because every one of our investors is a frequent traveler and sees the benefit of Room 77 and the long-term opportunity.
What is the business AND revenue model, strategy for profitability?
Our core service and data is free to consumers as is the mobile app. While we are most focused now on improving the user experience and growing our database, we see numerous monetization opportunities down the line. We will be exploring some of these in the months ahead and we lump into two primary buckets – advertising and transactional revenue sharing.
On advertising, we’ll likely test display and contextual advertising initially; and, we expect to pilot things like Room Request Guarantee in which consumers might pay a fee to guarantee a specific room, much like they do today for premium airline seats. We’d expect to share in that revenue with the hotel partner.
SWOT analysis – strengths, weaknesses, opportunities and threats?
Strengths:
- We’re the world’s first and only hotel room search engine. We offer patent-pending Room Rank and Room View technology to help travelers gain more insight and control over every hotel stay.
Weaknesses:
- We currently have data on roughly 10 percent of what we’ve identified as the market opportunity, but we intend to close the gap quickly and add more markets.
Opportunities:
- The two big opportunities we’re exploiting now is power of the crowd in helping us “sleuth” data and working with hotels to validate their data. The combination of the two will help us accelerate data collection and get us closer to having a complete database of all 3-star and above hotels and resorts around the world. There are numerous opportunities we see down the line as we start to more closely integrate Room 77 into hotel booking and management systems.
Threats:
- The biggest threat we originally identified was hotel resistance and we’ve already overcome that.
Who advised you your idea isn't going to be successful and why didn't you listen to them?There really haven’t been naysayers among those who have seen the full product demo. Initially, I heard some skepticism about whether hotels would work with us, but we’ve had great response from most of the hotels and chains we’ve spoken with. In fact, since we launched on Thursday, we’ve been contacted by properties around the globe wanting to get their property “verified.”
What is your success metric 12 months from now?
Right now, we’re all about expanding our database and continuing to improve the customer experience. We have a number of metrics and new product features on the horizon we’ll be tracking internally.
What I can share: in 12 months we expect to have data on more than one million rooms and be in more than twice the markets we’re in today, offering significantly more functionality on multiple mobile platforms.
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.