Last week, WorldMate, a maker of itinerary-management apps, debuted a major upgrade to its free and paid apps for iPhone and Android.
Key new features include automatic suggestions of hotels a user may want to book when he or she hasn’t yet added a hotel reservation to their itinerary.
WorldMate now suggests hotel stays that may be appropriate. Hotel suggestions will be cued on the user’s dates of travel and hotel booking history. For instance, the app might suggest the user return to a hotel he or she has been to before.
In cases when a user adds a hotel booking to their itinerary that has been reserved through another company, WorldMate will analyze the rate paid for the room and make a “counter-offer” for similar hotels that might be cheaper or a better value.
The startup draws its inventory from Expedia.
WorldMate was founded in Israel as MobiMate to help travelers manage their itineraries, deliver real time alerts, present local content, and book hotels and car rentals.
Worldmate’s Ian Berman, vice-president, business development, admits that the company has made some missteps in the past
In the past we tended to over-engineer product releases instead of taking a more practical “launch, iterate, re-launch” approach. About three years ago, we realized this error and subsequently re-invented our product planning process and team formation.
For example, since January, we’ve had our maiden launches for iPad and Windows Phone, released an Email Parsing API for developers, and issued 3 major updates for our iPhone and Android product lines.
WorldMate generates revenue in five ways: commissions from hotel and car rental bookings; development fees for white label versions of its app for major brands such as RIM’s BlackBerry Travel and AMEX’s mobileXtend; $10 a year subscriptions for its premium WorldMate Gold app; licensing of its email Parsing API; and some advertising.
The company is skeptical of mobile travel booking businesses that primarily hope to monetize based on mostly on advertising. Says Berman:
Everyone’s looking to make money in travel by getting people to click ads instead of actually helping the traveler….
OTAs and meta search companies are spending between 20-40% of their revenues on advertising to (re-)acquire visitors.
In essence, billions are being spent to sell unprofitable flights in hopes of cross selling hotels/ground transportation/local services. It’s not working well.
For much of its history, Worldmate’s leading source of income was subscription revenue. But the company says that booking commissions and its white label/API licensing business has been growing rapidly.
It thinks it is positioned to take advantage of the rapidly growing market in mobile travel bookings. PhoCusWright estimates the size of the 2011 U.S. market was $2.6 billion, and forecasts that the market will expand to $8 billion by 2013.
On the marketing front, WorldMate says it spends nothing on acquiring customers and that it grows on the strength of its distribution partnerships and word of mouth, especially among high-spending business travelers.
Incremental changes that distinguish WorldMate from other competitors are what the company says drive its positive word of mouth.
For instance, WorldMate’s Gold app also now lets users store their credit card information for faster last-minute booking via mobile app.
All of the apps also now support more than 20 currencies.
These functions are popular with business travelers booking on the fly on devices with small keyboards and uncertain Internet connections.
Worldmate currently has 26 employees located in the U.S. and Israel, and is privately funded with investors including Motorola Ventures and the BlackBerry Partners Fund.