pirate treasure
883 days ago
 

Ahoy the Pirates of Penzance [Travel Industry Disruption version]

Being called a bunch of pirates in an industry isn’t as bad an insult as it sounds – especially in the context of being seen as potential disruptive forces in the travel sector.

Thus the participants in the innovation and investment competition at the annual EyeForTravel Travel Distribution Summit in London will probably be rather pleased to be associated with rather unconventional ways of finding treasure.

Four companies pitched their businesses and answered questions from judges and the audience.

Blink - Same day hotel bookings (mobile app)

Madrid-based. Founded by founded by two Spaniards named Rebeca Minguela & Alex Perez. Daniel Reilly, a former director of travel for Groupon in the UK and Ireland, presented. Undisclosed funding. 30 staff including ten interns. Currently feature 500 hotels. 85,000 consumers have downloaded the app.

Looks a well executed app however there are future challenges:

  • Will it be possible to generate sufficient traction as a standalone B2C same day hotel booking service when existing hotel OTAs launch their own same day hotel booking services? (The existing players already have the hotel relationships and consumer traction)
  • Blink currently offers lower pricing than available from OTAs. They achieve this because the rate parity contracts hotels are signing with other intermediaries and agents only apply to online distribution and Blink, being mobile based, should be classified as a non-online channel. Can that position be sustained long term though?

HallSt – P2P hotel room trading

Barcelona-based. Founded by Alfredo Ouro. Team of four. Currently has agreements with 100 hotels although the model doesn’t necessarily require a hotels co-operation.

One way of describing HallSt is an after market for hotel bookings. If you no longer need your room booking you can swap it for another hotel on another date, donate it (e.g. to family members of hospital patients) or perhaps resell it….

Their model would also permit you to trade in hotel rooms (Making HallSt the E-Trade of hotels) so if your understanding of a market suggests hotel prices may go up – book now and resell later. Day trading for nights.

One of the judges, on saying he didn’t quite get what HallSt is, was given the memorable reply “because it is new, sir”.

Their largest challenges look to be around:

  • Marketplace traction requiring two sided growth at equal pace – for a traveller to be able to resell their room – someone has to want to buy it (via HallSt). The business will have to address how to get through the slow first few years ensuring that buyers and sellers of rooms both see benefits before the marketplace has sufficient depth and maturity on both sides.
  • Working with hotels – do hotels have to permit HallSt to run a secondary market on their hotel? Or can HallSt work OK without the hotels explicit permission. What happens if hotels put up barriers (e.g. cancellation fees) as a result of Tingo from TripAdvisor? Will HallSt’s nascent model be collateral damage?

CityBot – Personal travel itinerary creation engine (mobile app)

San Francisco-based. Founded by Greg Solovyev. Team of four. Self funded but currently raising.

The primary purpose of CityBot is to suggest to a traveller what they may like to do that day. It does this by creating a sample itinerary. Travellers can then swap out individual components (eg. a restaurant meal) with other components – either from a similar category or from a new category. (e.g. change one proposed restaurant with another).

Ultimately the traveller is then able to have all the commercially provided components booked via the app. CityBot expect to receive about 15% commission on tours and activities equating to approximately $24  per booking.

Looks a great user interface execution. Challenges will be around:

  • The user interface will have to become much more complex to handle booking capability (the proposed monetisation method). It is hard to keep totally elegant design when complexity is introduced. At this point the traveller may wish to book outside of the app reducing a potential revenue source for CityBot.
  • Cities have different structures – for example a city with a big magnetic attraction such as Cairo (the pyramids) may have a different template for a day itinerary than one that is compact (such as New York). City specific itinerary templates are going to be interesting to research (and therefore scale)

The judges applied four criteria to their decision:

  • Investment potential
  • Product usefulness
  • Excitement around the product
  • Problem areas

And the winner?

CityBot! Well done to founder Solovyev and his team.

NB: Disclosure – my company TourCMS also pitched. We are based in the UK, have a team of 2.5 and provide a Software as a Service (SaaS) reservation system to 250 suppliers in 40 countries. As a result of running a multi-channel reservation sytem TourCMS has the data that is necessary for mobile sourced (last-minute) tour and activity bookings from mobile apps like CityBot. TourCMS secured second in the competition.

NB2: Pirate image via Shutterstock.

 
 
Alex Bainbridge

About the Writer :: Alex Bainbridge

Alex is a contributing Node to Tnooz and writes about travel technology, travel startups, specialist tour operators and the tours & activities sector. He has previously led ecommerce, social media and reservation system projects for airlines, leading mainstream tour operators and hotel distribution companies in both leisure and business travel sectors.

He is the CEO of TourCMS, a web based software-as-a-service reservation system and distribution platform used by many specialist tour operators worldwide to take online bookings and distribute to 3rd parties.

He also moderates Small Fish Big Ocean, a community that welcomes small tour operators and niche travel agents to come and discuss travel ecommerce issues. Alex has a computing degree, is passionate about usability, speaks French and still writes and reviews code.

 

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  1. adar locker

    Nice artcile. Just to let you know, there’s another great website based on the same idea. The company is called Roomertravel. Here’s the link, check it out – https://roomertravel.com/

     
  2. Alfredo Ouro

    Thank You everyone for all your comments and interest in HallSt.com
    I would like to take advantage of this opportunity to explain some relevant aspects that could solve some of your kind questions and concerns:

    First, I would like to point out that the HallSt.com processes have been designed with current hotel challenges in-mind and with its co-operation. Cash-flow, high cost of distribution, lack of understanding consumers at the Social Media and Marketing levels.
    Secondly, HallSt.com offer benefits to both the Hotels and Users…
    Hotel Advantages
    - Cash in Advance
    - Reduced Commissions
    - Channel Manager connectivity
    - No Distribution fee
    - Users that re-sell their rooms become a great commercial agent for the hotel.
    - Hotels that have their rooms available online can buy-back their rooms.
    - Hotels can accept offers from Users, in a private, away from transparent online rates.
    Users Advantages
    - Option to buy in Advance and receive a discount
    - Option to re-sell the room to other users, should they not want the room. Maybe for a profit or maybe for a loss. If it is at a loss, then another user still benefits.
    - Option to negotiate for a better price, using the HallSt.com name your own price system

    And last, but not least, HallSt.com is a legal business model, as we have direct agreements with our hotels and they give us and our Users permission to re-sell their rooms, if the users would like.

    While the distribution sector is focusing more and more on last minute rates, Hall St. offers hotels the best marketplace to sell rooms in advance. In my humble opinion, the presence in Hall St. is also an opportunity for hotels to show another dimension when it comes to offer to the guest something new in order to compete with new top trends regarding peer-to-peer´s accommodation models.
    So, what´s Hall Street? I would say the first “free market” of hotel rooms and, of course, a “free market” is something new… but just in tourism. ;-D

    Please let me know should you have more questions or concerns…
    Alfredo

    Alfredo Ouro – Founder and Owner of HallSt.com

     
  3. Christopher Bates

    I only agree with everyone here on one common theme…”What is HallSt.com?”

    After following HallSt.com for the last few months, here is how I have come to define them, “HallSt.com is a new marketplace for guests to buy discounted Advance Purchase rooms, but with the flexibility to re-sell the room if they wanted too…” something no other Online Travel Agent or Tour Operator offers, making them unique and thus harder to define. I think most guest simply look for the best deals for the hotel and/or location they want, despite whether it is for today or next month. In the case of HallSt.com, since the room is pre-paid by the guest to the hotel, it cannot be cancelled or changed. The room may go unused, but why should the hotel care, they have already received the payment hours, days or months in advance. The hotel might miss out on some incremental revenue, but this would be no different than any other guest “No-Show”. My experience with guests that are likely to No-Show, is they give the hotel false contact and credit card details, so they cannot be charged, I would think this is somehow illegal or should be.

    From personal experience, I do not see HallSt.com creating any “havoc” for the hotel operations… I booked a room in November 2011 for a March stay in 2012, it was for the weekend of my Birthday. While I never intended to re-sell my room, I re-posted the room on the site anyways, at a price higher than what I paid. Since I did not sell the room, I used it and I found there was no difference to the check-in process. The only difference for HallSt.com vs. another sites, was instead of HallSt.com sending me a confirmation or voucher, when I was ready to use the room I had to print the voucher myself and to give to the hotel at check-in. The process was also no different than if I were to book a reservation via traditional Travel Agent or Tour Operator, the hotel receives my name and the Travel Agent details (for commission purposes). When I arrive, I would still need to give the hotel all my personal contact details, address, phone number, email address, ID and a credit card for incidentals. After check-out the Hotel would have to pay a commission and/or bill the Travel Agent for the room and tax. As a hotelier, I would rather be paid in advance and avoid my finance team having to process dozens of invoices and payments daily and many times manually.

    For me as a guest, yes I received a small discount, yes I paid in advance and yes I used the room and I was treated like any other hotel guest. The hotel never knew if I was the 1st person to buy the room, the 2nd, the 3rd…they only knew that I was the last guest to buy and use the room…which was paid for 5 months in advance by someone. The hotel seemed pretty happy, the room was sold, it was also paid for 5 months in advance and a guest showed-up with a voucher that matched the confirmation from HallSt.com. Lastly, the hotel received free Social Media mentions by me “the guest”, as I was posting the room I purchased to my Facebook and Twitter Accounts, telling all my friends, family and followers family what a great room I had at a great 5 star hotel. I´m sure if more guests do the Social Mentions for HallSt.com and their hotels, the costs to hotels would remain low, especially lower than most traditional online travel agencies.

    On another note, it makes me wonder if most of the negative noise about HallSt.com here and elsewhere is really because people do not understand it or if they or their business interests feels threatened in some way. And Finally, I also wonder how many critics have actually used HallSt.com, before giving their expert opinions or advice. Personally I would give very little attention to a food critic has not actually tried the food.

     
  4. Valyn Perini

    Regarding HallSt, I have lots of comments.

    From a hotelier’s perspective, it could be problematic. Would the hotel know ahead of check-in that the reservation has been donated or re-sold? What happens to the credit card on-file? What about hotels that are required to take credentials (for foreign guests, for example)?

    Is the hotel even required to honor the donated or re-sold room? After all, the hotel doesn’t have a contract with the second party, nor did they give HallSt permission to re-sell the room, unlike on other distribution channels today where hotels enter into contracts with the channel.

    Just because something is new doesn’t mean it’s viable (or legal).

     
  5. Ahoy the Pirates of Penzance [Travel Industry Disruption version] | Cheap Hotels In Cairo

    [...] Ahoy the Pirates of Penzance [Travel Industry Disruption version] Currently feature 500 hotels. 85000 consumers have downloaded the app. Will it be possible to generate sufficient traction as a standalone B2C same day hotel booking service when existing hotel OTAs launch their own same day hotel booking services? Read more on Tnooz [...]

     
  6. Ahoy the Pirates of Penzance [Travel Industry Disruption version] | Cheap Hotels In Cairo

    [...] Ahoy the Pirates of Penzance [Travel Industry Disruption version] Currently feature 500 hotels. 85000 consumers have downloaded the app. Will it be possible to generate sufficient traction as a standalone B2C same day hotel booking service when existing hotel OTAs launch their own same day hotel booking services? Read more on Tnooz [...]

     
  7. Glenn Gruber

    Alex, one thing jumped out at me as I was reading:

    “Blink, being mobile based, should be classified as a non-online channel.”

    What? You don’t consider mobile online? it’s arguably more online than the desktop web since it’s with you and available all the time (unless your battery runs out). Even a one-eyed pirate can see that. Forget about that position being maintained..how can it even be staked out?

    Explain yourself before the Dread Pirate Cole makes you walk the plank :)

     
    • Alex Bainbridge

      Hi Glenn
      Thanks for the comment! That phrase about mobile being a non-online channel – that came from Blink – not from me…. this was a specific discussions that came up in the audience Q&A during the event
      Agree – will be interesting to see how that plays out!
      Thanks. Alex

       
  8. Timothy O'Neil-Dunne

    All of these niche ideas are interesting. One question I always ask anyone involved in developing new ideas is “Is this a product, feature, or a company?”

    One of the companies pitching here in my view has not thought through their concept. Developing a product that is clearly in conflict with the partners if its successful seems to me to be a losing proposition. Hall St is just that product. The only redeeming feature I can find is that many hotels in many markets are happy to take any customer. So they just might be desperate enough to try it. However if I was a betting person (I am not just for the record) – then Hall St would seem to be a risky bet and a strange idea.

    I can get its a new concept. But is that enough?

    As hotels have been around for a very long time – then the likelihood is that as an idea someone has already thought of it and tried it. Hotels are just not set up to manage their inventory in the way that the concept envisages. Having any significant amount of rooms in the inventory assigned to a class of individual guests who may or may not be the actual person staying in the room creates havoc. In many markets around the world the reservation must be made and the resident must register who made the booking. So the downside of the effort seems to outweigh the potential benefit (s) – which in my view seem to be very sparse.

    Thus I will avoid any attempt at Johnny Depp voice impressions but I will leave you with this quote which I think is somewhat appropriate…

    Johnny Depp (Jack Sparrow): … put your sword away, no use you getting beat again …
    Orlando Bloom (Will Turner): … you didn’t beat me, you ignored the rules of engagement in a fair fight …
    Johnny Depp: … not very much incentive for me to fight fairly …

    I will leave you to figure out who is the Inn keeper and who is Hall Street but I rest my case m’lud and suggest they both be hung from the yard arm….

    Cheers

     
    • Greg Solovyev

      Timothy, what is the downside for the hotels? Once the guest decides to go, they print out the voucher and at that point the hotel knows the name of the guest and the room cannot be further resold. The upside on the other hand is liquidity. The only downside I see is that hotels won’t be able to sell the same room twice, e.g.: I made a reservation, paid for it and didn’t show up on time, so hotel moves someone else into my room. Frankly, I think hotels should stop doing that. Twice now, I have showed up at Hilton after prepaying via Hotels.com and was shown the door – no money back, no room to stay in either. So, if something like Hall St can guarantee to me that the room will stay booked even if I show up a day later, I’d be all for using them instead of other means of booking.

       
      • Timothy O'Neil-Dunne

        Politely that’s a load of crock

        The more processes, people are forced through the less they take. I really think that people like you (and a few people’s grannies and LJS impersonators) are few and far between.

        I think your argument is obscure at best and spurious in conventional terms.

        I just cannot get behind this idea as is. For the way you present it then its a giant ponzi scheme and an attempt to load up the “channel” with a consumer’s money that the hotel takes and the consumer loses. That is not a successful business model to me in either case.

        Cheers

         
        • Kevin May

          Kevin May

          @TOD – enough.

           
          • Timothy O'Neil-Dunne

            OK Mea Culpa for being somewhat curmudgeon like.

            The comment form does say “Speak Your Mind” so I was just doing that ;-)

            Let me elaborate if I may a little further.

            Finding a way to engage the consumer has proved to be elusive. We have a basic mismatch in hospitality that opens the door to more opportunities than one would think There is an excess of capacity for hotels in many mature markets (such as the USA). At the same time the opening of P2P channels worsens the situation so that in expensive markets (e.g. NYC) this cost per transaction is likely to come under pressure for the provider to engage in obscure and unproven marketing.

            I am all for innovation but this is still a tough sell even in a very small niche.

            Cheers

            Timothy

             
  9. RobertKCole

    Arrgh matey, it be safe t’ say travel contraptions gunna be lookin’ t’ be capturin’ booty from innkeepers ‘n local merchants.

    Th’ interestin’ query be if ye be good pluderers, when pillaged by landlubbers ’bout acquisit’n, gunna these band ‘o pirates part thee scurvy pirate ways fer th’ doubloons offered by ye bilge sucking privateers?

    Ay, or’ll yer lot be scuttled ‘n fed to the fish follow’n flogging by blaggard OTAs be know’n dead men tell no tales…?

    Fair winds & godspeed – may yer jollyboats nev’r see Davy Jones’ Locker…

     
 
 

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