In August 2014, TJ Person founded Plano, Texas-based startup OpenKey, wants hotels to say goodbye to metal—or plastic—room keys.
The startup enables hotel guests to use their smartphones as room keys. OpenKey is on pace to have 149 hotels under contract in 2016.
The company has been funded by a dozen large hotel ownership and management companies, and it has disclosed that it has raised $1.5 million in seed funding.
The company's technology pairs with hotel room locks that use NFC, RFID, or Bluetooth technology. Hotel clerks can zap the key to guests' phones, which then can be used to open locks.
OpenKey's backend system gives hotels analytics about their guests.
Here's a one-minute video pitch:
A brief Q&A with CEO Person:
How is OpenKey’s solution better than and distinctive from other solutions on the market?
OpenKey’s solution is universal – integrated with more major lock manufacturers than any other solution on the market.
OpenKey is distinctive in that it is not part of a larger concierge product – we focus on improving the hotel guest stay through enabling them to check-in prior, skip the desk and go straight to their room – using their smartphone as the room key.
This strategy is better aligned with hotels and brands that have Loyalty programs in place.
We are integrating with PMSs.
What is the number of full-time paid staff?
OpenKey has a current FTE count of 20.
Do you have to be one of the member hotel groups that backed OpenKey’s founding to use the product?
The OpenKey product is available to any hotel, brand or group that wants to improve the digital guest experience while saving money
What is the revenue model?
OpenKey has a simple ‘pennies-per-day’ revenue model that equates to half the cost of replacing one RFID card. Most hotels pay $.25 per door per day for OpenKey service.
OpenKey also finances lock upgrades to Bluetooth Enabled locks necessary for mobile key as part of a 36 month agreement for a little as $.40 per door per day.
Why do you think the pain point you’re solving is painful enough that hotel customers are willing to pay for your solution?
Hotel customers don’t pay anything for the OpenKey app – it’s available for free download in both the iOS and Android stores.
Hotels pay to license the OpenKey software because the savings more than offset the expense.
OpenKey enables hotels to reduce front desk overhead through our skip-the-desk feature, reduces keycard waste and expense and provides hotels with valuable customer data necessary to convert those guests to direct booking in the future.
External validation?
OpenKey client hotel and customer user numbers increase every month.
Tnooz view:
The hotel industry has talked about digital keys for years. Perhaps the biggest announcement came earlier this year when Hilton Worldwide added keyless entry to its app for loyalty members at 250 US hotels.
OpenKey says that it has at least one hotel participating in "nearly every major stay brand", which, along with traction from some independent hotels, shows adaptability.
The company says it has been funded by 12 of large hotel ownership and management companies.
That's good given that there are many competing attempts in the market.
A couple of examples: Hotel group Starwood began to add keyless entry via its SPG mobile app in November 2015 while InterContinental Hotels Group said in June 2015 that it has been testing keyless entry technologies.