TripBAM is bringing a different perspective to hotel bookings - rather than listing a bunch of prices in an area for purchase, the startup promises to search all booking sites for the best rates at a user-selected group of hotels.
Dubbed "the ultimate hotel shopping experience," this allows travelers to book a hotel at one rate, and then use tripBAM to ensure that they are not missing out on a lower rate as their trip approaches.
After entering either a hotel name or a destination, travelers are brought to a map interface where they can select hotels of interest.
These hotels make up the "hotel cluster" that the service will search on each day. On days with the lowest rates, tripBAM will send an e-mail so the traveler can cancel a previously made reservation and make a new one at a lower cost.
This is one of those simple, ingenious services that everyone wishes they would have thought of first. The idea of using a machine to perform repeated searches - especially searches that were being completed by humans prior - in order to identify a better deal is not new to travel, but is quite new in the hotel space.
Sites like Kayak and Bing have been tracking historical prices for flights, and alerting travelers when the best deals are to be had. However, hotel prices are much more elastic given the larger inventory and number of variables impacting price. This sort of service on the hotel front is very clever, and will likely provide some very clear savings.
In fact, TripBAM co-founder Steve Reynolds claims to save users an average of 25%.
tripBAM makes it as easy to shop across more than 200 hotels as it is to shop just one. The traveler picks the hotels for shopping and then we shop every day while making it very easy to cancel any prior reservations and rebook. By doing this, we save the average traveler 25% or more on their hotel stay.
There is no competition for this service today. We provide an API to agencies to capture reservations from the GDS to initiate the search process without traveler intervention.
The 5-person startup has moved from angel funding to a seed round from Thayer Ventures for $1.25M.
Tell us how you founded the company, why and what made you decide to jump in and create the business.
I’ve been in the travel technology space for over 25 years. While attending a board meeting in DC, we were all discussing hotel rates and the frustration around shopping. One of the members had a great rate at a hotel right next door to the one we all booked. He said he had an executive assistant that regularly created a set of hotels to shop and then checked the rates daily.
She would change his reservation as prices dropped. After spending several months analysing the industry, we realized that hotels do change rates frequently, especially in major markets. We also realized that if someone shopped a cluster of hotels (more than one) each day and booked flexible rates, they could save 25% or more on their hotel stay without corporate discounts.
What is your estimation of market size?
The addressable market is all leisure and business travellers wanting to save money on their hotel stay and willing to stay flexible as to the hotel which amounts to more than $100B.
Please describe your revenue model and strategy for profitability.
For consumers, the model is based upon commissions paid by the hotels earned by finding better deals for consumers. For companies, either a transaction fee or commission split. For agencies, a fee based upon searches or bookings made.
Describe what your start-up does, what problem it solves (differently to what is already out there) and for whom?
TripBAM makes it as easy to shop across more than 200 hotels as it is to shop just one. The traveler picks the hotels for shopping and then we shop every day while making it very easy to cancel any prior reservations and rebook. By doing this, we save the average traveller 25% or more on their hotel stay. There is no competition for this service today. We provide an API to agencies to capture reservations from the GDS to initiate the search process without traveller intervention.
Why should people or companies use your startup?
To save money.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
The marketing strategy varies by market. For B2B, we sell thru travel agencies leveraging past industry relationships and contacts. We’ve already signed several agencies and have a large pipeline of prospects. In addition, we sell and promote the product thru Hickory Global Partners to their member agencies. We promote the product directly to Independent Contractors and Executive Assistants.
For consumers, we have partnered with Traxo and plan to replicate similar relationships with other travel related B2C solutions, several of which we will announce by end of the month. Finally, for B2C sales, we plan to use digital marketing strategies, social media, industry relationships, and more.
How did your initial idea evolve? Were there changes/any pivots along the way? What other options have you considered for the business if the original vision fails?
Our biggest challenge is focusing on an initial market. We’ve gotten so much attention from multiple market segments that it’s been difficult to stay focused. Our service has value for consumers, travel agencies, independent contractor agents, executive assistants, corporations, convention management companies, and more.
Where do you see yourselves in 3 years time, what specific challenges do you hope to have overcome (please refrain from using biggest, best or most awesome in your answer)?
We plan to finalize the interface for our B2C solution, continue to sell and grow in the B2B market, expand internationally, finalize our patents, launch our mobile solution, then expand into alternative markets such as car, cruise, and more.
For the immediate and long-term, tripBAM plans to finalize the interface for their B2C solution, continue to sell and grow in the B2B market, expand internationally, finalize our patents, launch our mobile solution, then expand into alternative markets such as car, cruise, and more.
>What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Shopping for hotels has become incredibly complex. Multiple channels all claim to have the best price (OTAs, HOAs, MetaSearch, Direct, traditional agencies), a wide variety of rates (opaque, penalty, commissionable, deposit required, amenities included, negotiated, consortium), along with a high amount of rate fluctuation each day.
Travelers simply give up and book the most convenient. This often results in high cost and a high level of frustration and eventual buyer’s remorse. For the corporate market, negotiated discounts are becoming increasingly hard to obtain, don’t cover many of hotels booked, and require expensive RFP processes and frequent rate audits.
Our service allows a company to reduce the number of RFPs and focus on hotels where they have enough volume to obtain rates below market.
Tnooz view:
Given the relative ease of tracking a cluster of hotels, tripBAM will likely see rapid uptake. Travel managers will love the ability to quickly save money and shave hours off the time it takes to ensure compliance of any 'best available rate' policies. Independent travelers will also be able to take advantage of the service, for family trips or independently managed business trips.This will surely not be welcome news to hoteliers, as the secret sauce to revenue management is always very closely held. However, price sensitive individuals and companies will still have to take steps to leverage the service - it's not automated, so reservations still need to be monitored, cancelled and rebooked if a better rate is found.If tripBAM takes off, hoteliers might be pressured to rethink their flexible booking policies for different rates. There may also be an opportunity here to differentiate rate categories more thoroughly with value-adds, similar to how American Airlines revamped their rate structure to include specific perks.Regardless, this idea is a simple solution to a complex problem. By eliminating the time hurdle, tripBAM has made it easy for anyone to get the best possible rate on their hotel stay. It also increases competition among nearby hotels in their quest to poach guests from one another - either way, the guest wins on this one, and the clever hotelier will need to consider how this new breed of service plays into their revenue management strategy.
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.