JustBook wants to challenge perceptions on last-minute hotel booking
JustBook is a same-day hotel booking mobile application based in Germany.
Since public launch a year ago the startup has built up a 60-strong team led by chief executive Stefan Menden, Sebastian Fallert (Development), Ognjen Zeric (Product and Expansion), Florian Waldmann (Operations and Finance) – all of whom are based in Berlin. Meanwhile, Nilgun Yankaya Akram heads up the UK team and is based in London.
All of the founders as well as Nilgun have abandoned large corporate, finance or consulting backgrounds to build the business which they say is ‘close to their hearts and not efficiently served by the existing business models.
Since the startup’s launch in January it has closed three funding rounds and describes itself as ‘well-funded’.
JustBook anticipates the mobile same-day hotel bookings market will reach Euros 1bn by 2015 but acknowledges competition from Blink (Spain), Hotel Tonight (USA) and Hot (Spain).
The startup’s commercial model is based on a commission from hotels for each room booked across the application.
Q&A with chief executive Stefan Menden
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?
The JustBook model of marketing a hotel’s last-minute availability was not widely tested before we entered the market, but we now know that it works. It’s one of those ideas that benefits everyone involved – the sort of idea that makes people say ‘why hasn’t anyone thought of this before?’
Hotels fill up otherwise empty rooms, gain new customers, and are positioned alongside up to five other hotels in each destination in which we operate – so it’s another advertising channel for them. And for customers we can offer significantly bigger discounts for their stay than the deals available elsewhere online, as well as ensuring they are no longer penalised for booking rooms last minute. They also know that the hotels we show them every day have been handpicked by city insiders and are top-rated by our users – that curation process is hugely valuable to the travel consumer who is looking to make a hotel booking quickly and on a small screen.
We have only ever offered deals via our app, and not online, so hotels could give us better rates than they could offer to online travel agents. And we spend a lot of time to always stay ahead of our competition in the mobile space by being the ones that understand what the consumer wants better and responding to it faster than anyone else. Entering such a competitive industry means the model has to be water-tight. It must work seamlessly for hotels and really hit the right spot with the consumer as well.
Why should people or companies use your startup?
In the past, travellers have been penalised financially by leaving a booking to the last minute. This is because they are perceived as a captive audience who need a bed for the night and will stay anywhere they can. But this is not always the case. What about those travellers who are passing through, and could stay in a hostel or with relatives for the night, but would like to have the option of a high-end hotel room instead?
Or those who could take a train home but would prefer a hotel stay if the price is right? By charging full price for rooms needed at the last minute, hotels have alienated certain types of potential customers.
By booking through us, customers don’t have to plan their trip weeks in advance but can stay in a top-rated, centrally-located hotel in their chosen destination – at a low price. By booking on the same day as their first night’s stay, they can enjoy savings exclusive to the JustBook app while having the peace of mind that every hotel that we show them has been vetted by our team and received excellent ratings from other users.
We also pride ourselves on the fact that the booking process (choosing a hotel through to receiving a confirmed booking) can be completed in as little as 10 seconds from opening the app. So the app is fantastic for time-poor, frequent travelling professionals and spontaneous travel junkies.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
People who booked with JustBook are extremely satisfied, tend to book multiple times once they are through the door and are our best advocates. Most bookers come from word-of-mouth recommendation. Also, there is a nice sharing feature in the app that allows users to give away hotel vouchers by inviting friends to join JustBook.
Other than such “organic” marketing, we feel it is important that we focus on mobile marketing as well as the typical forms of offline media (such as our ads on the London Underground). Obviously, getting people to download JustBook is a top priority and by advertising on other relevant apps and mobile sites, we can create the highest level of targeted downloads.
But it’s also about targeting the right people at the right time. Getting new customers at just the point that they need us is a priority. Therefore we are working in partnership with travel companies such as airlines, rail companies and ticketing agencies to drum up interest among their customers who are most likely in need of a hotel.
What other options have you considered for the business and the team if the original vision fails?
Last-minute hotel bookings may only be the start. We know there is demand for last-minute bookings, but why should it end with hotels? The model could be replicated to fill up empty seats in restaurants, theatres or cinemas. Smartphones are the key to this, and enabling consumers to stay flexible. But we as a team – and it is a great team of young, motivated and creative people – are 100% focused on cracking the hotel product right now. Everyone at JustBook breathes and sleeps hotels – and has a lot of fun in the meantime.
What mistakes have you made in the past in business and how have you learned from them?
When JustBook launched in January 2012 in Germany, the leading German online hotel booking site warned our hotels that they could not offer lower mobile-exclusive rates with JustBook or else they would face penalties. Our mistake was to not anticipate such uncompetitive action by OTAs.
We took this abuse of market dominance to the federal cartel office, which resulted in a landslide victory for the price freedom of hoteliers and the innovation of smaller start-ups. Had this not happened, we would surely not have been able to establish JustBook as the mobile option for hotel bookings.
This could have been a tremendous setback, but we emerged victorious and turned it into a great opportunity, as we received a lot of media attention which clearly furthered our brand awareness in Germany.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Changing customer perception has perhaps been the biggest challenge for JustBook. Consumers have always been led to believe that by leaving things to the last minute, we will be at the mercy of whichever service provider we need to turn to. However, it just doesn’t make sense. Hotels are always looking to fill rooms, so why not market their last-minute availability at a price that makes sense for a customer?
You always wonder who is it that is in a destination and thinks ‘I’ll stay here tonight’ and books a hotel via an app. But, clearly JustBook and its rivals in the space see massive opportunity. In addition, research from Expedia shows almost 70% of its travellers booking a room via a mobile device were looking to stay within 24-hours.
Using this nifty infographic, JustBook says its customers are workaholics, price scrimpers, spontaneous city hoppers and hotel lovers and the vast majority (95%) try out a new hotel every time.
This has got to be a game for first movers as OTA giants such as Priceline were very quick to jump on the same-day hotel booking trend when these newer entrants started gaining traction and there are rumours of some already having fallen by the wayside.
That said, JustBook seems to be well organised, claims to be well funded and has been gutsy in taking on established hotel OTAs in Germany over uncompetitive practises – showing how serious it is taking the business model.
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Linda Fox is deputy editor for Tnooz. For the past eight years she has worked as a freelance journalist across a range of B2B titles including Travolution, ABTA Magazine, Travelmole and the Business Travel Magazine.
In this time she has also undertaken corporate projects for a number of high profile travel technology, travel management and research companies.
Prior to her freelance career she covered hotels and technology news for Travel Trade Gazette for seven years. Linda joined TTG from Caterer & Hotelkeeper where she worked on the features desk for more than five years.