Travelzoo is reversing the trend of online travel agencies getting into the world of media (by buying metasearch companies) and will soon start its own hotel booking service.
The new product is to be spearheaded by a recent addition to the team: Steven Rubin, previously of YOTEL, Kimpton Hotel and Restaurant Group, and Swissôtel New York, joining the company as vice president.
Rubin will oversee all aspects of the new service: direct hotel bookings for VIP subscribers.
Travelzoo, which bills itself a "global media company", has a current business model that includes travel, entertainment, local and vacation deals, and provides deep discounts to travel products all over the world.
The expansion of the business into direct hotel bookings is significant, as it will not only provide more revenue opportunities to the company, but also segment their subscriber base.
This segmentation allows Travelzoo to build a more elite community that spends more on travel, and is interested in purchasing curated hotels directly rather than just waiting for a deal.
On the consumer side, Travelzoo will invite a select group of travelers from their 26 million subscribers to join in the VIP program. These travelers will be the most engaged and interested in travel, and will be offered exclusive access to the booking platform via a closer user group environment.
On the hotel supply side, Travelzoo will use its positioning as a curator to identify hotels to invite into the program. Only a select few will make it into the program, with an initial group of 600 hotels developing into 3,000 globally over the medium-term. Hotels pledge to offer not only any other deals currently available, but most importantly for this particular product rollout, their Best Available Rate.
Tnooz spoke with Steven Rubin about the plans to develop a direct booking model for hotels alongside Travelzoo's existing deal-centric business.
What is the new hotel booking product, and how is it new and different for Travelzoo?
We're showcasing selected hotels, and these hotels will be driven by our subscriber reviews.
This is a unique product. We're utilizing a specific demographic that's interested in travel, and we're putting out the Best Available Rate and our existing business model, and making a shift from our existing business model. IT's the #1 thing that our travelers have asked for: the ability to book a reservation 365 days a year. From a hotel's perspective, it's a shift because we're not looking for deals but the Best Available Rate.
It's also going to be curated by our Chief Curator, who is going through and vetting everything on the site. It's very market driven - subscribers continue to review them, and if you don't get good reviews, you may find yourself when you're not on the site anymore and not part of the program.
It will continue to complement our current model and will be driven by the [current] commission model.
Tell us more about the Chief Curator.
The Chief Curator, Angela Dow, has been with the company for along time. She was employee #1 when we launched in the UK, and she launched the Top 20 program in Europe. Her and her team have spent hours and hours going through the hotels and vetted them each independently. They've stayed at hotels, and are going through to curate the list.
Who are the customers?
Targeted, engaged, affluent consumers that are highly interested in travel. We have 26 million subscribers globally, and we've identified a subset of VIP subscribers for this product. It's an invite-only situation - for both consumers and hotels.
What hotels have signed on already?
It's going to be evolving. Right now, we are in the middle of negotiations and working with hotels. That will continue to evolve as time goes on and as we get closer to launch later this year. Our goal is to launch with 600 hotels globally, and as the program continues to grow we're aiming for 3,000 globally. We're narrowing it by city. A city like New York with 450-500 hotels, we'll only be looking for 30-40 hotels.
How is this product a different space for Travelzoo?
Travel is a entrepreneurial company and has a great passion fro travel. This is completely different than everything I've ever done, but I've always had a passion for the hospitality industry.
This program and new booking opportunity gives me the unique ability to create a global program that is going to benefit both hotels and guests.
For me, it's a hotelier's dream. Even though I'm not working at a hotel anymore, I'm still bringing both together - bringing the value of all the experience that Travelzoo has on the advertising and media side.
We have these VIP subscribers that are an affluent demographic, engaged and interested in travel. For some of them, travel is a hobby. Now we can take that and market curated hotels directly to them. It's creating a niche in the marketplace while also helping hotels, because now we're enabling hotels to have direct access and direct bookings from a differentiated market.
For me, this is a perfect marriage between working with hotels and working with travelers and future hotel guests. That has been one of the biggest drivers for me.
Technology is an important part of direct bookings. Did Travelzoo create its own technology? And when are you launching the product?
Technology challenges are part of what we're working on in advance of the launch. Technology moves so fast and the skys the limit. We have an amazing tech team that is cranking through all all it.
We're launching later this year. We're curating hotels and going after an audience that are engaged in travel and the hotels are curated to the point that we know they are delivering a high-end experience to our travelers. Will it be the cheapest? No. Will it be the most expensive? No. We're basically curating to guarantee a good experience, and people will pay more for that.
It's a trust - our subscribers trust Travelzoo. We've done our research and curated the list for them. They know that these hotels have been vetted. The booking platform will be pulling the best available rate, which will be market driven. So its a combo of existing deals but the platform will also be available to book best available rate.