Apparently there is $10 billion wasted every year when travellers are unable to cancel a hotel reservation and get their money back.
So this is a good reason why presumably a startup calledÂ Cancelon has appeared on the scene.
The Israel-based company wants to muscle in on such woes for the traveller by creating a marketplac for swapping hotel reservations that can’t be used, taking a 10% commission from the seller.
CEO and co-founder Omer Granot leads a “small and passionate” team with experience in internet marketing, business engineering and law.
He says the market size is roughly around 5% of all non-refundable hotel reservations are never used, thus the business opportunity which initially started during 2010.
Q&A with CEO Omer Granot:
How is the way you are solving this problem more special or effective than previous attempts you or the market has seen before and how different do you have to be to succeed?
We are actually pioneers in this arena – few sites allow the sell of a timeshare and travel points, but currently there are no solutions for travelers that purchased non-refundable hotel reservation and canâ€™t make the trip.
For verification purposes, Cancelon checks with the OTA or the hotel that the name of the original owner, who purchased the reservation, was switch to the name of the buyer.
Why should people or companies use your startup?
Currently those who canâ€™t make it to their trip are losing their money when their reservations are of the non-refundable variety. Cancelon allows them to sell their reservations and save money.
New travelers can find attractive deals at Cancelon and use the “make your offer” feature to place an offer for a reservation they are interested in.
In addition, companies can collaborate and share their revenues with Cancelon and provide creative solutions for their clients, both for clients who are about to lose their money, as they canâ€™t use their hotel reservation and for clients who are looking for attractive deals.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
We believe that we provide a platform that can benefit users and companies. We are eager to expend our partnership with OTAs, social travel companies, search engines and other companies.
The collaboration will raise Cancelon’s awareness.
What other options have you considered for the business and the team if the original vision fails?
Based on user and industry feedback, we would like to keep the focus on the marketplace for unused reservations. Currently we donâ€™t have any plans to change the companyâ€™s vision
What mistakes have you made in the past in business and how have you learned from them?
We spent a lot of effort in expending the business to other travel areas like flights. However, the size of the market was very large and we are a small team with limited budget, so it was too early to go in this direction.
We decided to continue and keep our focus on the marketplace for selling and buying unused hotels reservations. In the future we hope to expend our business to other areas as well.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Many hotel reservations are non-refundable due to different policies and strong competition in the market. Travelers cancel their travel plans for different reasons, and therefore, in many cases, lose their money.
Cancelon is the first company that provides a solution for those travelers, and allows potential buyers to enjoy bargains. We see it as a win-win situation as we help users to sell their reservations and buyers to get attractive deals.
In addition, we assist OTAs, hoteliers and other businesses in the hotel arena to provide a better service to their clients, without experiencing any loss.
With this much money being left on the table it is no wonder that companies such as Cancelon (similar to air ticket exchange platform ChangeYourFlight) want a piece of the action.
Where Cancelon will have it work cut out will be, as with so many other startups, getting users to and then loyal to the service.
One potential problem here is how frequently will a consumer experience a non-refundable hotel booking issue? Maybe once every few years? If that?
Therefore, Cancelon could well be relying heavily on word-of-mouth and SEO to get attention.
But where this might work will be through partnerships with agencies or with large corporations that have the volume of customers.
So while the idea in principle is sound, more questions than answers remain, especially around whether hotels will be willing to work the company.