Hotel management company Life House is spinning out its revenue technology as an independent entity.
The new company, which is called Diamo and will continue to be supported by Life House initially, is focusing on providing revenue management technology to small independent hotels.
Diamo CEO James Kay said a B2B software-as-a-service unit was established within Life House at the beginning of 2023 to start offering the technology as a platform.
“We had zero clients at the beginning of last year and now we’ve got 110,” he said, adding that the market for revenue management at smaller properties is underserved.
Kay said it’s not only about having a pricing engine but also having a good website with an optimized checkout process, investing in marketing and ensuring distribution on different online channels. Most customers have not had a revenue management system until now, but properties are willing to adopt “products focused on solving their problems,” he said.
Kay also spoke about the changes at Life House in recent months with a new management team brought in that had enabled the teams to “take a step back” to look at the business models.
“We have different customers between the management business and our software business, with different go-to market strategies and different groups of investors. We have different exit opportunities. So the agreement we ultimately came to with our board is to allow Life House to be the best hotel operator for independent properties and allow Diamo to be focused on really solving the holistic revenue problem that a smaller property faces.”
Life House is providing Diamo with finance to get up and running, but the company hopes to complete a seven-figure funding round to capitalize the software business in the next three months.
Kay has had some good conversations with investors and said it will all be down to executing and “showing investors in the market that this is who we are, this is what we do, and this strategic decision ultimately leads to a better outcome for the business.”
The priority now is to tell the market about the business as well as develop the platform further by leveraging machine learning, he said. The company has started testing generative artificial intelligence in the background with a goal of pre-programming the questions a revenue manager would ask a chatbot and creating alerts around potential issues such as price alerts, bookings updates and distribution mix changes.