Staypia claims it is the world’s first hotel booking service run autonomously by artificial intelligence and machine learning technologies.
The Korea-based hotel booking service searches for the lowest price for 3.16 million hotels and beats that by as much as 30% more in discount.
What is your 30-second pitch to investors?
Staypia members can book hotels at lower-than-the-lowest market price available on major hotel booking sites. Membership is free and there’s absolutely no strings attached.
We use AI to run Staypia at almost no operational cost, so we can charge significantly lower commission than any of our competitors and still be profitable. We also partner with social media influencers to grow our membership organically.
Describe both the business and technology aspects of your startup.
Staypia is the brainchild of Mycelebs, a leading AI transformation solution startup and an AWS advanced technology partner. We’ve built Staypia using an AI-driven service automation engine, which combines Big Data processing and visualization, machine learning and real-time update. We’re using technology to bring efficiency to a traditionally human resource-heavy industry.
Using AI and data management solutions, we’re able to refine our service to deliver real-time travel trends and personalized customer experiences. Also they give us the ability to partner with travel service providers to "plug and play" new features as we grow, so our members could eventually plan their entire travel on our app.
Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.
Strengths: We have access to more than 3.16 hotel price index, which is the largest scale in the industry, and we work in direct partnership with B2B providers to source the lowest cost.
Weakness: We are a new player in a highly competitive market.
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Opportunities: Our mobile app can be accessed in 169 countries in multiple languages. We’ve established a commission-based partnership model for social media influencers to bring new users to our app.
Threats: Limited travel due to COVID-19 will likely continue. However, our low-upkeep business model means that we are better positioned to grow amidst the pandemic than other travel related businesses.
What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?
Online hotel booking services make it easy for consumers to compare hotel information and their availability in real-time. What’s often overlooked is that they still come with a markup from various agents that take commission in the booking process. So whilst people book hotels online thinking they’re getting the cheapest price, they’re actually not. We use AI to bring hotel prices to trade level for everyone, and make the booking and cancellation process a breeze.
Global tourism is also extremely lopsided, with only a handful of travel destinations and accommodation options known to most tourists. We help travelers discover travel options based on unbiased, real-time trends data. Instead of the generic “five star hotels in Europe” recommendations, you’ll see keywords like “boutique resorts with free yoga programs” or “pet friendly hotels in the countryside” that are personalized to your preference.
So you've got the product, now how will you get lots of customers?
Leisure travelers are increasingly using social media for travel inspiration. In the U.S., more than half of Gen-Zers and millennials with summer travel plans are using social media to help them prepare. So we partner with social media influencers to bring in new members, rather than spend big bucks in advertising. We call them our "regional captains," and we have 33 of them across 21 countries acting as our brand ambassadors.
This strategy has been successful, and we’ve grown to almost ten thousand members since our beta launch in February 2021. Our user response has been overwhelmingly positive, with roughly 8% of our members returning to book with Staypia again.
Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.
The global hotel and resort sector is a $1.47 trillion industry and online travel agencies take up approximately half of the reservations made each year. Commissions are typically 10% of the amount, so we’re after a fraction of $15 billion market.
Our intention is to bring down the value of this commission-based market entirely to benefit the consumers. Traditionally, travel agencies are heavily dependent on human resources. Online travel agencies bring the cost down by block booking many rooms at trade price and redistributing them to individual customers.
We identified the need for a more efficient travel booking system while building AI- and machine learning-based features for a leading travel booking service. We helped automate the data management and visualization process, which improved their overall internal workflow efficiency by five times. We decided the mechanism could be applied to the entire running of the business, which led to the launch of Staypia.
How and when will you make money?
We’re already making money. Our focus for future growth is to expand our user base globally as international travel resumes.
What are the backgrounds and previous achievements of the founding team?
We are a travel tech startup, with a big emphasis on technology. Our core team is a mix of experts in business development, data science and engineering. Our engineers are experienced specialists in data processing, machine learning and natural language processing. We’re also seasoned entrepreneurs with years of experience in business management and passion for using technology to disrupt the market. This, coupled with our strong partnership with B2B providers and experts and travel sector, gives us a competitive edge against established competitors in the online hotel booking service market.
How have you addressed diversity and inclusion within your business?
One of the pain points we’re aiming to address is bringing more diversity in tourism. Prior to the pandemic, global tourism expenditure amounted to over $120 billion a year, but the top 10 destinations received almost half of that revenue. We want to change that by using technology to bring diverse accommodation destinations and options to travelers’ attention.
In fact, our "regional captain" model is designed specifically to address this challenge. They earn relative to the total revenue generated in their dedicated region as their commission, which encourages them to introduce more diverse travel spots and accommodations to their followers.
What's been the most difficult part of founding the business so far?
We faced a high entry barrier in terms of technological know-how. Staypia is the world's first hotel booking service run autonomously by AI and machine learning technologies, so we faced challenges as pioneers in a new frontier. Our team is experts in data and engineering, but we had to create new ways to apply our learnings in the hotel industry.
It was extremely challenging, but we’re proud to have pulled through. Today, it gives us a great advantage as other travel tech startups are working towards a similar model.
Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?
Tye travel industry had a rough year but we’ve launched at a good time, as the world is opening back up and travelers are eager to jump on a plane. However, we will continue to see big fluctuations in travel demands as we navigate through the challenges of COVID-19 variants.
This is a big risk for most travel agencies and hotel booking services, which rely heavily on human resources to operate. In contrast, Staypia is run autonomously by AI, which means the ups and downs in the travel demand will have no implication on the running of the service.
Also we are harnessing the power of social media and user-generated content to attract new users, not advertising or paid marketing. So we’re in a great position to reinvent the way people plan for travel in this new era.
A year from now, what state do you think your startup will be in?
Right now we’re focused on the North American market but in a year’s time we’d like to be more established globally. Our team is working hard to add localization features for Latin America, Europe and Asia as well as multiple currency options to our app.
What is your end-game? (Going public, acquisition, growing and staying private, etc)
We want to disrupt the market, break the status quo. Our vision is to use AI to make travel booking more efficient, and deliver significant cost savings and curated information for individual travelers.
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