Startup Stage: Hotelwise wants to help Canadian travelers find the right hotel

Hotelwise

Founded earlier this year, Hotelwise is a hotel-focused online travel agency (OTA) focused on Canadian travelers.

CEO and founder Andrés Collart said the startup is leveraging artificial intelligence (AI) as an effective tool to help match the right hotel with the right traveler.

What is your 30-second pitch to investors?

[We are] currently not seeking investment, but if I was, then I would highlight how this is an ultra-lean company that's leveraging AI from the ground up. It's not leveraging AI in the typical sexy in-your-face ways but rather as a tool to bring the right information to each person throughout their booking journey at scale.

For example, Hotelwise displays results in categories where AI helps curate certain aspects, and when someone gets to a hotel details page from a  “family friendly” category, then in real time I use AI to show the best quotes from Tripadvisor reviews that are relevant to that shopping experience, like  “the pool was great” or  “the children's playground is amazing.” It's all about how can we be the most helpful to someone picking the right hotel for their trip.

Describe both the business and technology aspects of your startup.

From a business perspective it's quite simple—a hotel OTA that gets supply from bed banks and sells to Canadian travelers. I'm getting traffic from Google Ads as well as building a local brand and refining that strategy to ensure good conversion throughout the funnel.

From a technology perspective, it's interesting that in the age of AI it's possible to build an OTA with a single person and to bring in a high level of experimentation at its core. Almost every part of Hotelwise is running experiments to test assumptions and understand how to better cater to customers. A few years ago, this would not have been possible without a massive team deploying these, but with the tools available today—both in AI and for multivariate testing—it's possible to carry that out quite easily with just one person.

From a product perspective, a key difference is the introduction of various categories that differ from the traditional hotel OTA booking experience. This groups hotels into categories like “romantic” or “wellness and spa” or for Niagara Falls, “falls view hotels.” The concept I'm testing has both local and global categories, which seems to help people find what they are looking for better than the traditional OTA results page. This also provides a lot of rich data back in terms of knowing what that person is into and how to personalize the experience as they progress through the site.

For example, if someone searches for a room and has listed kids in the room occupancy then “family friendly” is the top shown category. If they then select a room from that category, the hotel amenities showcased are based on that (highchairs, children's playrooms, etc.) and so are the Tripadvisor review quotes highlighted. It's all about helping them have the right experience and presenting the right information to help them make a decision.

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

• Strengths: A very lean operation with continuous integration/continuous deployment means that from idea to a live change (often an experiment), can take as little as a day. This allows experimentation to happen very quickly. Additionally, since my experience at Trip Ninja spanned every department, I can see the whole picture and ensure that changes take a global mindset.
• Weaknesses: One person coming up with all the ideas is not great—that's where I've had to tap into my network to help with ideas on solving difficult challenges. I'm also not from the hotels side of the industry, so it's been a bit of a learning curve moving over from the flights side (and doing B2C instead of B2B). Given that Hotelwise also has no investors besides myself, it also forces me to prioritize new initiatives since I can't pursue everything with a limited budget.
• Opportunities: Building something from the ground up means not having to deal with old technology and tech debt, so the speed of iteration and changes in the business is a huge opportunity. Given the pace of innovation around AI, there are opportunities in becoming an early experimenter with these technologies and developing business models/technology that plug into AI quite well.
• Threats: The biggest threat is not being able to make the economics of the business work before I tap out my allotted investment for this, but things are looking good so far.

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

Hotelwise is focused on Canadian travelers, primarily, and with this comes a couple of main pain points I'm tackling: 

1. CAD pricing: Unfortunately, the $ is the symbol for both USD and CAD, and too often when shopping and comparing prices as a Canadian, you're trying to read the fine print to really know what currency you're shopping in. It's very simple, but catering to the Canadian market means showing CAD prices and being upfront about the currency.
2. Tax inclusive pricing: This comes down to honest business, and maybe that's me being naïve, but if we have the information about the total cost of something, we should just display that. There are unfortunately scenarios where city taxes and resort fees are not included, but as much as I can on Hotelwise, we show the final cost to the customer.
3. Being honest with your customer: Too many sites include a disclaimer like “what we are paid impacts our sort order” on their results page, which is the result of consumer protection group/government legal action, since they prioritize the results that make them the most money. At Hotelwise, I focus on what is right for the customer—always. We'll make a cut on every booking for sure, but helping the traveler find the right hotel for them is more important than the differential revenue from the booking.
4. The categories concept should help make the experience personalized so that the right information is presented at the right time.

Now that the product is built, what’s your strategy for customer acquisition?

I'm working on building a local brand in Canada, starting with Nova Scotia, in an effort to build a sustainable business with good ROI and value over the years. Aided with experimentation, I'm always improving how customers progress through the funnel and testing new customer acquisition strategies.

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

As anyone who has booked a hotel room knows, it's difficult to find the right hotel when they all sort of look the same and you don't know the city you're booking in. That's the core challenge that OTAs solve, and currently, I don't think that they solve it very well. As a small company—the size of the market is large enough given that Booking.com and Expedia both exist—if I can take a crumb off their plate, I'll be fine.

How and when will you make money?

Making a bit off every booking like all OTAs out there.

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

I am Andrés Collart, the previous co-founder and CEO of Trip Ninja, leading the company from founding and building the core technology all the way to acquisition by Webjet (ASX: WEB/WJL now after demerger). Post-acquisition, I worked there for three years to grow the company again and built the team back up from the two-person team it was with Brett Ziegler to the nearly 30-person team it was when I left.

How have you addressed diversity and inclusion within your business?

A team of one is terrible at diversity! This honestly presents a challenge where various viewpoints are needed to ensure the optimal outcome. I have to be cognizant of my biases but also strengths and weaknesses as an individual to know what strategies will work well for Hotelwise or how to carry them out.

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

Learning about marketing and building a B2C business is very different than B2B flights tech, so it's been a huge learning experience. I love the learning involved, but it's also time-consuming and expensive sometimes.

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

I believe that Hotelwise is doing some innovative things in terms of how AI is being used in the background to drive personalization instead of the flashy implementations sometimes done by startups. But at its core, it's very similar to established OTA businesses so that should substantially lower the risk.

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

Hopefully profitable!

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

At this time, I'm thinking staying private, but going through the acquisition with Webjet and learning from their team was incredibly rewarding—so not ruling that out if the right buyer presents itself when the time is right.