STARTUP STAGE: GauVendi brings dynamic and feature-based inventory management to hotels

GauVendi

GauVendi is a sales and revenue system for hospitality. It breaks away from static room type inventory management and introduces dynamic and feature-based inventory management.

Founded in 2020, GauVendi's data structure and product data points are the basis of smart AI and machine learning. They enable novel ways of selling, revenue management, marketing and automation opportunities for any type of accommodation business.

What is your 30-second pitch to investors?

Traditionally, accommodation units are managed, priced and sold in simplified and static room categories. There is a complete lack of transparency for guests during the booking process and high opportunity costs for operators from idle room assets. We’re moving away from this concept and introducing dynamic and feature-based room inventory management. Our Central Sales System opens new opportunities for sales, revenue management, marketing and automation. It’s a win-win for all stakeholders:

• Guests can book individualized room experiences through direct sales channels
• Operators can stand out from competition, benefit from an average of 14%-plus higher average rates, more direct and higher value bookings 
• Owners increase asset appreciation and gain new insights for better CAPEX decisions

Describe both the business and technology aspects of your startup.

Our business is about strengthening the position of accommodation operators, providing better guests experience and delivering higher asset returns. 

A new inventory data structure, as well as new product data points are the basis for effective artificial intelligence and machine learning combined with novel sales psychology. Room and stay experiences can be priced and sold in any imaginative way. We allow accommodation operators to get back full control of their inventory. With more granular and real-time shopping behavior data, more automation opportunities are created for the entire digital guest journey.

We are often asked if we are a booking engine, a central reservation system, an upselling tool or a revenue management system. The answer is, we are a bit of every one of these and we don't allow ourselves to be pushed into one category. We are a new system category: a sales system. The name says it all. Gaudium = joy, Venditio = sale. 

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.

Strength: First-mover advantage with a large learning curve of selling automated and individualized room and stay experiences. We enable accommodation providers to stand out from any third-party sites and competition with true direct booking incentives and optimized positioning and pricing for third-party channels.

Weakness: New technology. To maximize the benefits of our system, there is to be connected two-way interfaces with the PMS provider used by the client.  

Opportunities: The next level of revenue and digital guest journey automation. Expansion into more booking platforms by redefining how room and stay experiences are being managed and sold.

Threats: Legacy systems and slow change of hospitality technology landscapes. Old practices persist based on reluctance to change to newer technology solutions.

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

Unfortunately, booking accommodation today is treated like buying a commodity; it supposedly has to be quick and easy. And when the guest checks in, they are surprised that the room is not as expected. Online travel agents (OTAs) commoditized accommodation units and made the most important value-added element in our industry - the room - comparable. This means that the accommodation booking process is often only differentiated by price and guest reviews. Our industry has forgotten how to sell individual room experiences - or has been unable to do so due to the complex distribution landscape and lack of evolution in traditional property management systems.

What good is it, if I can book a standard room or deluxe room on a booking portal, but want a quietly located room with a large bed, away from the elevator, with a floor-level shower and a good view? 

This is exactly where we come in with our Central Sales System. We define room experiences based on functional and emotional experiences and move away from static room management (1 room = category) to dynamic room management (1 room = countless products). This approach enables clever room matching with feature-based room sales and the opportunity to sell the same room to different names, prices or restrictions in line with the target group. 

So you've got the product, now how will you get lots of customers?

Operators which are building new brands or individual hotels and serviced apartments use us in their tech stacks, because this way of selling creates real differentiation and new automation opportunities. We have customers in the Germany, Austria and Switzerland region, Spain, India, Australasia and America.

Our software is listed on all connected property management systems web stores. Partnerships with those cloud-based systems are benefitting both sides. With two-way integrated solution, our Sales System provides a lot more stickiness for PMS providers and is often the reason to pick this PMS over another one with no integration to GauVendi. In addition, our customers benefit from significant instant upsell revenue delivered by our sales engine at the time of booking and which is replacing common booking engines.

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

We are hospitality professionals having worked for multinationals in senior roles. We globally understand the typical problems of building RevPAR premium for accommodation brands, driving more direct business and higher asset returns for the owners. While there have been some movements in price innovation, such as moving from static pricing to dynamic pricing, nobody has ever touched the way rooms inventory is being managed. That’s too bad, because now we are doing it and breaking down experiences into more granular data points!

As an industry we need to acknowledge that accommodation operators have lost control of their own inventory. Third parties and OTAs can sell room inventory much better than the accommodation providers themselves. We are on a mission to change that and win back control for the operators. The most logical way for us to achieve this is to change the way room inventory is managed, allowing for distinct and true differentiation from any third-party accommodation retailer providing a much better guests experience through booking via direct channels. 

The overall market is huge, and our potential customers range from holiday homes, hostels, serviced apartments, bed and breakfast businesses and hotels. According to market line there are over 356 million accommodation establishments globally with the majority being leisure establishments.

How and when will you make money?

We operate with the software as a service (SaaS) business model and also apply a commission on the instant upsell revenue achieved from our novel sales engine powered by AI. Making money is not equal to making a profit. We believe in a good balance between investments to grow and delivering shareholder returns and this requires a minimum of five years or more with the possibility to expand to other industry verticals. 

What are the backgrounds and previous achievements of the founding team?

We have been fortunate enough that the three co-founders have been working together on various high-profile projects and companies before. Duy Nguyen runs his own IT consulting company, specializing in AI and software solutions for hospitality, accounting, and financial service industries. Carina Stegmayer has been heading up the operations globally at Wordlhotels with a strong distribution and revenue management background, and Markus Mueller has been working globally in senior commercial leadership roles for Hyatt, Moevenpick, IHG and WorldHotels.

How have you addressed diversity and inclusion within your business?

Our team says it all. We are global citizens located in Germany, Spain, Singapore and Vietnam and encourage different types of working routines and nationalities. From digital nomads to parents working only a few hours per week because of family commitments, we have it all. We have a balanced mix of female and male employees and are very aware that with growth company, cultures change and hiring the right talent with a cultural fit is a pivotal part for us. After all, companies are made of people and our technology is an enabler, and we like to maintain the essence of our culture and values.

What's been the most difficult part of founding the business so far?

Getting the right funding partners aligning with our core purpose to strengthen accommodation providers. We are not keen to take on VCs who are up for just short-term profits. Our business is funded by strategic partnerships giving us enough runway to grow. Our goal is to build long-lasting value for the hospitality industry. 

Secondly it was hard to find the right software developers to stand behind our vision and extract the mercenaries just doing it for the money.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

We believe every successful startup company needs to have tenacity. There is no way to cut a product life cycle short. You will always have the innovators, the early adaptors, the early majority and so on. We have started a revolution and were very selective of who we started this journey with to gain the right support. Our expert team, global network and novel product will ultimately break through, we are very certain of that.

A year from now, what state do you think your startup will be in?

We certainly hope that we will be coming out of the early adopter stage and see more smaller and medium-size accommodation chains implementing our solution.

What is your end-game? (Going public, acquisition, growing and staying private, etc.)

Of course we do have exit strategies for our investors including an IPO or strategic merger. However, our core team wants to have a lasting business and brand which finally stands for giving accommodation operators back the control and own their customers! Call it love for the industry.