Thoughts
274 days ago
 

Will last minute hotel booking players really disappear in three years?

Last-minute hotel deals via mobile devices have, to some extent, become a new distribution channel for hotels – with numerous startups created to capitalise on the model.

But, controversially perhaps, HRS CEO Tobias Ragge says that the majority of these startups could be out of business within three years.

There are a number of established players (such as the largest independent one, HotelTonight) and other emerging players in all major regions.

Many of these players are well-funded and they are constantly expanding to new regions to offer last-minute hotel deals on mobile/website.

Tobias’ comment about fragility of the model in a recent WebInTravel article has triggered many responses.

Interestingly, HRS itself has a last-minute hotel reservation app by the name Hotels Now, which has hotels listed in 120 countries. The app has apparently been downloaded by 750,000 users.

Thoughts

Tnooz asked Ragge to elaborate on his recent comments. He explained to us what conditions he believe will prompt a fall from grace for the same-day booking category:

“Generally the idea of last-minute bookings is not new and it is becoming increasingly popular to book hotels on the go. Business travelers, who frequently have to react flexibly and change their travel arrangements, are increasingly booking their hotel room at the last-minute using mobile devices.

“However, the market for same-day booking apps is a niche market and therefore not profitable for stand-alone players. If you like to run apps like this, you have high acquisition costs, but only low profit margins.

“That’s why we believe only same-day booking apps will survive that are built upon established, existing systems like HRS.

“Just focusing on mobile last-minute offers will not be sufficient as most of the established OTAs also have successfully launched their mobile solutions and provide a much better infrastructure for hotels to reach customers worldwide. Also if you look at the app store ranking most of them are ranked pretty low.”

Dublin-based Mobile Travel Technologies (MTT) has built a white label solution where a hotel will be able to launch its own branded, last-minute hotel deals app.

Gerry Samuels, CEO of MTT, reacting to Ragge’s comment, says:

“There is definitely a proliferation of last-minute/same day hotel booking apps and whether all of these booking models will survive is a moot point. But, the multiple offerings in the same day hotel booking space is because there is a market need to be met.

“There is a specific segment of customers who are flexible and happy to travel & book at the last-minute. These are opportunistic deal seekers as opposed to those who want to book in advance secure in the knowledge that the exact type of room they want is booked, and that they have all the extras (breakfast, view, wifi etc).

“Until recently, hotels had to go through an intermediary for their last-minute inventory taking a further cut from an already discounted room. But if hotels, can do this directly through their own last-minute channel, this is a key way for hotels to have a healthier yield on last-minute rooms and to attract new customers to fill last-minute rooms and then to leverage the relationship for future custom.”

Tnooz also spoke to Tomas Laboutka, CEO of HotelQuickly, about his view on the comment by Tobias.

Laboutka says:

“The travel space is in constant transformation, new models appear and disruptively change the landscape. Ten years ago, mass internet allowed OTAs to gain foothold across the globe. Agoda was almost bankrupt in 2004, and is now one of the big four OTAs.

“Mobile internet penetration is exploding and people are shifting away from their computers, using mobile devices for everything that they used to do online. Tailored apps with a clear unique selling proposition are here to stay.

“OTAs obviously play down the model as a hype, but looking at the fundamental drivers responsible for the success or failure of last-minute mobile bookings, we clearly disagree with their assumption.

“Travelers go mobile, book later and later, demand a more tailor-made, use-case oriented service, rather than one-fits-all solutions.

“We are happy to see rate parity finally breaking apart, allowing hotels to deploy more sophisticated distribution strategies. Price-fixing is under fire across Europe and the US, and the same trend seems to reach Asia.

“Hotels want to hedge their exposure towards OTAs via alternative channels, be it their own website, app, or packaged deals.”

Global trend
In Asia, same-day-hotel-booking is still an emerging trend, unlike US and Europe where we have established brands like HotelTonight and BlinkBooking.

Other players who are significantly expanding in Asia include Hong Kong-based HotelQuickly (see its TLabs, here) and Cambodia-based CheckInTonight.Asia (see its TLabs, here).

Among them, HotelQuickly has raised funding and now it has expanded the service to ten countries across Asia.

Ragge has a different take on the profitability of players in this model. He says,

“In my opinion, none of the last-minute stand-alone platforms are able to break even, because building up and retaining the hotel content for the small niche market of last-minute hotel bookings is not feasible, if you are a last-minute only player.”

But, Samuels explains what has already been achieved in MTT and what he hopes is in store:

“Our Eleventh Hour hotels white label app is available for 116 hotels in 75 cities across China through the Jin Jiang Hotels Group. They launched their same-day booking app with us in June. It’s called Jin Jiang Hotels Lite and is available from iTunes.

“We will also soon launch with another 34 hotels for an international hotel chain (in August) with properties across Europe, North America and the Middle East & Africa.

“Hotel chains that work with us for their same-day booking channel want to do so because it gives them more control on how they approach the last-minute market, which enables them to do more to avoid cannibalisation, that they pay less commission on and most importantly, that enables them to have ownership of the customer relationship for future custom.

“For the hotels’ end customers, they have a great, easy to use app that enables them to secure a really good rate at the last-minute.

Meanwhile Laboutka of HotelQuickly speaks about his plan for the start-up:

“In next three years, we will serve our markets in Asia Pacific and beyond. If we continue to grow at the current speed, we will see a couple of million installs and we will be present in all the popular tourism destinations.

“Traveling rates across APAC is growing at previously unheard of rates and absolute volumes will soon reach the current levels of travel in the West.

“Already now, as travelers in the region are less used to OTAs, travelers go from zero to mobile. As first movers in the mobile last-minute travel space, we are in the best position to capitalise on this trend.

“Having said that, we will never replace OTAs. We offer a highly focused product for a very specific niche market; of course we see OTAs as competitors, but the market is big enough for multiple concepts and in the end, the customer will chose his or her preferred channel.”

Laoutka highlights an interesting point about the dark hand of OTAs in the last-minute hotel deals model.

Quite a lot of OTAs in Asia (and also the global players) already have last-minute hotel deals on their websites. In India, for example, the leading OTAs like MakeMyTrip and Cleartrip sell last-minute hotel inventory.

When asked Ragge whether the last-minute hotel deals service in OTAs will also become obsolete, he says:

“Not at all. Last-minute hotel offers will always be complimentary to the regular hotel offers, because it is a good opportunity for hotels to increase booking volume in the off-peak seasons and increase efficiency.”

A crowded marketplace is perhaps one sign to support Ragge’s view that many last-minute hotel deals players will vanish in three years.

For example, Mobile Travel Technologies can be seen in some respects as a competitor to the likes of Hot Hotels (TLabs here), HotelTonight, BlinkBooking, HotelQuickly or CheckInTonight whose core business model is collecting product from individual brands into a single booking platform.

We asked Samuels whether the core players in this space will impact on MTT’s white label business:

“Our approach is different to these players.  We provide a direct route to market for same-day bookings which is more profitable for hotels. We enable hotel chains to have a dedicated app for the last-minute market in their own brand that they completely control in terms of the inventory, what discounts it offers and how it is promoted.

“It means that hotels don’t need to comply with intermediaries’ and specialist same-day booking apps’ business models.

“Moreover, having the direct relationship with these last-minute bookers for future business via the last-minute channel or otherwise is a key benefit of using the direct channel. This is a message that is resonating with the hotel chains we speak to.

“Evidently, when a hotel sells through an intermediary there is less control and many hotels want to focus on optimizing their own distribution channels.

“Different hotel chains have different requirements and approaches to their mobile strategy. For those who want to have their own dedicated mobile channel for same-day bookings, the Eleventh Hour Hotels solutions meets this requirement.”

Laboutka responds why businesses like HotelQuickly won’t be affected by MTT:

“This is a great idea and certainly the way to go for big chains. We motivate hotels to explore the mobile space and leverage these alternative distribution channels.

“However, we don’t think that boutique hotels or smaller chains will be able to attract enough users with their own app, as travelers don’t want to install 30-40 apps for all their travel destinations.

“Hence, aggregation makes sense for these hotels, and with the fencing of HotelQuickly as well as the curation of the offers, brands are protected and rate parity does not apply.

“Furthermore, HotelQuickly has an outstanding team of IT developers that will continuously develop the app to the highest market standards. Customized apps dedicated to one hotel chain will face issues in this and will likely carry hidden costs.”

Hotel Tonight responds

Tnooz talked in person with Sam Shank, CEO of Hotel Tonight, who is sanguine about his start-up:

“Our research finds that more same-day bookings are happening through Hotel Tonight than through any of the major OTAs’ explicitly same-day apps or any of the clones from other start-ups.

“Regarding the clones, yes, building a same-day booking app is easy. It only took us 10 weeks to go from having wireframes to having code we could ship, and we didn’t have any models to copy.

“I think a lot of the clones are discovering that executing a last-minute hotel booking business is very, very difficult. We’ve worked really hard to learn all of the nuances of last-minute inventory.

“As for the OTAs, we’re not yet impressed that they’ve executed well in their same day apps. It’s totally an Innovator’s Dilemma-type thing for major companies to tackle a project like this.

“Hotel Tonight is going to be the next household brand name for travel. We’re going to go public.

“We’re meeting our benchmarks on our product road map, which was an aggressive road map. We have a 3x annualized growth rate in bookings, by dollar and unit volume. Our repeat usage rates are high for our comp set. Our average commissions are where they need to be.

“We’re scaling at a pace our advisors say is appropriate and sustainable. Our board is happy. Our investors are happy.

“I don’t by any means want to sound over-confident or, on the other hand, defensive, which I might if these quotes are taken out of context. The context here is that I’m responding to doubts that the business model is viable and scalable. The model is definitely valid.

“In response to critiques that say this business model is just a fad, I disagree. The doubts seem to only be coming from established players. Make of that what you will.

“We’ve made our share of mistakes. We still have a lot we have to learn. But what happens to us is going to be about how well we execute, not about the validity or scalability of the model.”

NB: Image via Shutterstock.

 
 
Karthick Prabu

About the Writer :: Karthick Prabu

Karthick is general manager for Tnooz in Asia, based in Bangalore.

He has previously worked for Port of Singapore Authority, SITA, TravelCLICK, Rezopia, Travelocity, MindTree and Happiest Minds Technologies.

Follow him on Twitter, LinkedIn, Facebook and Google+.

 

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  1. Shaun Y

    That’s quite interesting how things are evolving the way they are. Not really surprised about the movements towards mobile devices and such. Just the growing trend I guess.

    Shaun Y.
    Website Owner
    http://bestdealrooms.com

     
  2. Shaun hinds

    I like the fact that one of the featured contributors, Mobile Travel Technologies MTT, has a web site which is not optimised for mobile.

     
  3. Friedrich von Scanzoni

    Last minute hotel booking as a single service? They are already dead, without knowing it. The innovation is not there, the value creation is just to small. Nothing what the traditional big players are not able to do. Actually they can do it even better.
    Bye, bye
    Friedrich

     
    • Brian Steel

      If you are marketing a product, then you first need to define the dimensions of the product, its size and characteristics. You then have to look at its stability over the lifetime of the product. So what are the dimensions of the “last minute booking market”? With over 40 years involvement in the travel and tourism industry I have seen a continuous revolving door of entrepreneurs attempting to lure operators with the words “We know nothing about your business but we have the solutions, and we can sub-optimise”. This is usually followed by “however, in order to do this we need some start-up capital and you would naturally be interested in being a lead investor with immediate high ROI” They then vanish into oblivion, only to be replaced by another of their ilk – and the process goes on and on. Last minute bookings have not reached the peak of their product lifecycle because there was never a product and there never will be such a product offered by the travel industry. The hotel booking systems in place have identified a market and continually refine the market. They are there to provide “convenience” rather than “price” to make bookings and their success depends on how they service the needs of their market, With regard to Joe Pope’s comment about WorldCallButton, this will operate in a defined market with free downloadable apps. Joe needs to look at travel websites and see the use of 0800 numbers and Skype highlighting. Perhaps he has decided that he no longer needs the old hat landline of mobile for potential clients to contact him – and is still wondering why his phone does not ring

       
      • John Pope

        Hey Brian,

        It’s “Joe” here – I like that handle, too. ;-)

        Excellent comments… I enjoyed the various marketing and biz dev lessons you provided – your 40 long years in the business has paid obvious dividends, and will surely hold you in good stead for developing the future innovations to revolutionize distribution in the hospitality industry.

        Could you elaborate some more on the product dimensions, size and characteristics (etc.) idea for a digital application use case? That would be great – cause I’m not sure I fully understand the technical nuances of that concept, yet.

        It appears you have a unique and canny ability to identify some genuinely useful solutions to help all of us newcomers – and our “ilk” – to possibly help prevent us from vanishing into oblivion, unnecessarily. That would also be fantastic to better understand the method behind your magic, so we don’t make any silly mistakes, in future. Bloody irresponsible kids these days, huh – thinking they can just do whatever they want, and not even try to understand the rules of the game. There should be strict decorums and well-established precedents before any disruption or innovation happens, in future.

        What do you think? Are you with me on that one? No more innovation or disruption, unless you play by the rules and stick to the same processes that have always governed the industry. That makes sense, doesn’t it?

        But, I am still confused about one other minor issue. If single function, last minute, mobile, hotel booking apps aren’t even a product, because, as you say, “there was never a product” and they haven’t “reached the peak of their product life-cycle” – which I’m guessing would actually be impossible, because there’s not a product to begin with – and, “there will never be such a product offered by the travel industry” then what are all these apps doing on my phone?

        Boy oh boy are all of those “supposed” sophisticated investors and high-falutin Venture Capitalists going to be in for a shock when they find out they’ve invested in something that doesn’t even exist. Guess their collective due diligence processes need a serious overhaul. Because, investing in a market that’s an undefined market is a sure way to not have any market to market to, and to not become the market leader of the market that doesn’t exist, in the first place. What a bunch of imbeciles – they obviously have more dollars than sense.

        It looks like you’re in good company though, as Friedrich is pretty much on the same page, with respect to the validity of the same-day-last-minute-hotel-booking business model. Shame we all couldn’t learn more from him, as well.

        And finally, I’ll have to admit you’re probably right, I should pay more attention to the old “landline of mobile” use case, cause I’m likely missing a trick with that one, too. Que sera sera.

        Thanks for all your advice, Brian. I look forward to more sage words from you in future.

        You can reach me the “Old School” way at 0800 633 3767 that’s 0800 NEED S.O.S.

        Call me. :-D

         
        • Brian Steel

          Well Joe, taking my previous comments, how much investment might you make in our system, without my divulging the detail? Ater 40 years, I was not born yesterday. The system is as it stands at http://www.worldcallbutton.com. The detail for you depends on $$$$$$$s -big!

           
  4. William El Kaim (@welkaim)

    I wish I could speak such a coloured english language. But I’m not, so please forgive me for the basic sentences…

    Since it is the holiday season, it is may be the best time to read again the Long Tail from Chris Anderson. Amazon and Alibaba are still a good example of what to do to be the digital supermarket.

    For selling hotel inventories, and if you follow the “3rd industrial revolution” of J. Rifkin, what you need is an amazing number of hoteliers that could propose their inventory themselves, easily to simple platforms (grids) at a reasonable (fair) price. It could be a mobile app, could be a web site, it could even be a click to call number or a SMS based platform … What’s important: Hotelier selling direct.

    And if you have any doubt look at the success of the French site “http://www.leboncoin.fr/” … Very basic web site, but heavily used since it’s free to use. Now imagine people pushing their hotel availability for free in such a site, and imagine a basic app on mobile to book and search …

    The Middle Class in Asia will grow more than everywhere else in the next 20 years, and it is reasonable to think that hotel hubs or OTAs could be disrupted by a continental low margin, low tech, high volume new entrant.

    In some markets, people do not trust perks, or loyalty points, they want benefit now. And in PRC, for the LCC, the later you book your plane, the better the price is. Why not for hotel?

    Disruptive innovation (Clayton Christensen) describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. Last minute hotel booking will may be disappear, but low cost, low margin mobile based hotel room market will explode in Asia … That’s my bet!

     
    • Sean O'Neill

      Sean O'Neill

      Thanks!

       
    • John Pope

      William El Kaim,

      There’s certainly no need to apologize for language used – words are limiting at the best of times, anyways; even for most poets and novelists – it is always the ideas that count the most. And, your ideas certainly are very sound and have merit; and the references to several sources you cited are full of wonderful concepts and ideas, too. So it’s clear your knowledge comes from reliable sources.

      I’ve read The Long Tail and Disruptive Innovation, myself; they are both iconic volumes of innovative ideas and strategies for a better future digital economy – both, at the micro and macro levels.

      Also, thank you for the referral to Rifkin’s book – after some research, I’ve decided to download “The Third Industrial Revolution” straight away, as it relates directly to our existing objectives to maximize job growth and other forms of economic opportunity throughout the world, and more critically, to create a lateral – versus hierarchical – organization that becomes a living, breathing and, hopefully, successful example of how a company or organization should be governed in a modern, “connected” world.

      Your voice, and the ideas behind it, should definitely be heard on this nooz site more frequently, and broadcast to the wider Travel Industry audience.

      Because it is through ideas like yours, and the actions that follow them, that the global economy, along with our industry, will heal itself from the damage that occurred during the recent economic crisis; and more generally, through the various forms of downsizing in labor forces, due to rapid advancements in technology.

      Keep fighting the good fight, William.

      Happy Ramadan. :-D

       
      • William El Kaim (@welkaim)

        Thank you for the praise …

        What is really interesting in Rifking approach and It took me some time to understand is that he clearly stated that for the first time in history, it is not a top down information revolution (one source broadcast information) but a lateral revolution. The power comes from the millions of nodes communicating and forming smart grids. Sometimes, there is not even a “master node”, like for the Tor project.

        Metasearch is for me an intermediary form of “smart grid” (not fully distributed and fully own by a commercial company) connecting travelers and sellers.

        In the near future the ones able to “create”, “increase the reach” and attach the most nodes to their grid will be the next big companies. That’s the way I understand why Google wants countries, cities, and people to connect in High speed (fiber in some cities in the US) or just to connect (project loom to provide WI-FI with Balloons).

        Amazon was also very good at doing this, and was may be the first. Apple is the perfect example of a company not willing to do it. Microsoft might come to it … Xbox is a jewel …

        Conceptually, what is the difference between an hotelier renting a room and a person renting its house? Nothing, except the power of the smart grid, that collect and display information in the way it wants. Both can provide the same information: availability, cost, etc.

        In France, the gov voted a law to make sure Chauffeur (black cars like snapcar) could not picked a passenger before 15 mn after he called (or he used its mobile app). Taxis were complaining … In other terms, they put a condensator in the grid.

        And that’s the other characteristic of this revolution, it is lateral and fractal … You can begin by a city or a suburbs and grow, grow, grow.

         
        • John Pope

          William,

          More profound thoughts from you, my friend.

          Your pronouncement:

          “for the first time in history, it is not a top down information revolution (one source broadcast information) but a lateral revolution. The power comes from the millions of nodes communicating and forming smart grids. Sometimes, there is not even a “master node”

          This is so perceptually spot on by Rifkin, and you, that this concept should be BROADCAST FROM EVERY ROOFTOP ON EARTH – pardon the contradictory pun – so that the idea is able to spread rapidly, and create a life of its own.

          This process, in fact, is already happening organically, via the increase proliferation and understanding of power that the Net provides people. “Lateral Distribution” of products, services, ideas and movements are going to happen, despite the intervention of powerful incumbents, and their desire to try and sabotage the evolution process – the genie is out of the bottle, and the wish of the masses (people) will ultimately be heard and realized.

          The powers that be just have difficulty understanding this process, for obvious, self-interested reasons.

          As for the Hotel vs. Personal Renting issue, I’ll respectively have to put caveats on that assumption, because there are quality of life issues for the VAST amount of residential land owners that should be respected. I reckon for every one (1) home owner who would like to offer short-term lets, there are one thousand (1,000) home owners who simply want to live in peaceful residential neighborhoods.

          More thoughts on this topic are here:

          http://www.tnooz.com/2013/07/26/news/are-governments-trying-to-kill-the-sharing-economy/

          Again, brilliant stuff, William. Your perspective is of great value to this humble reader.

          Thanks for your continued interest. :-)

           
  5. John Pope

    Absolutely love this article – and its subsequent thread.

    Sam Shank is already rehearsing his Public-CEO-Type-Jargon speak, with an air of confidence and superiority that would make Arnold Schwarzenegger seem like shy school boy.

    MTT is now overtly peddling its white-label 11th-Hour-Solution-In-A-Boxmobile application without a less hidden agenda and PR blitz, by not-so-subtly pretending to be practical marketing advice for hoteliers.

    World Call Button is wanting to take the hotel distribution and technology innovation calendar back to 1995 – no offense, Brian, it’s not quite that early. I’m sure you guys are going to “kill it.”

    Tobias Ragge, and HRS, predicting the CERTAIN & INEVITABLE demise of a new and innovative solution to hotel booking, whilst having simultaneously being found guilty of antitrust, anti-competitive and anti-consumer behavior, by bullying both hotel partners and a relatively miniscule competitor in the same-day booking space. (NO CONFLICT OF INTEREST THERE) ;-)

    The penalty for his (their) actions being €250,000 or six months in jail for each separate infraction. HOLY SCHEIßE, Batman!!! No wonder he’s coming out swinging. (Nice referral, Joe. Any news on the appeal, yet?)

    (BTW: If that decision is held up in German court, that should effectively all but put an end to Rate Parity, as we know it, throughout the entire GLOBAL travel industry. Once confirmed, ALL BETS WILL BE OFF, and hotel distribution will be in for an era of hyper-innovation and disruption)

    Sit ludos incipiunt, es correcto, Joe!!!

    I haven’t seen this much testosterone and blatant self-interest in one room since the Mens Room at Wembley Stadium during this year’s Champions League Final or the Kulm Hotel’s cocktail lounge in Davos Switzerland, during the World Economic Forum.

    What an amazing sight to behold!

    P.S. Did I mention that we’re about to take over the entire world, yet? ;-)

    All with a single button, single function mobile, tablet and web app that promises instant Nirvana and a Fountain-Of-Life-like, eternally fruitful, Earthly existence. Along with free premium Universal Travel Insurance and a lifelong subscription to “The News Of The After World” – if you’re one of the first 1,000,000,000 subscribers. Let’s see if HT can compete with that.

    It will be available at the Apple App Store and Google Play on September 1st, for just $9.99.

    Please Note: it will NOT be available to Blackberry and Windows 8 users, as we have made a unilateral corporate decision, and don’t think they deserve it.

    Thought I might as well join the party whilst it’s still going strong. :-D

    Cc: Kevin – there you go, you have the scoop! The cat’s outta the bag, now.

     
    • Joe Lima

      I wish Tnooz had a like button. Thanks John. :-)

       
      • John Pope

        Glad you enjoyed my earnest interpretation of the Same-Day-Booking milieu, Joe.

        I hope you’re able to download our app when we launch, as it will surely pay further dividends for your terrestrial karma.

        However, I also must warn you that publicly fraternizing with me, or demonstrating even a modicum of approval for my unique form of modesty and seriousness, will likely lead to a reduction in future stuffy corporate employment opportunities.

        But, not to worry, the NSA and we are always looking for a few good men (and women) with a good sense of humor. :-D

         
  6. mobileguy

    Not this again. This is a silly market to be in. The only way to make money in the long run is in volume and none of the players will ever be able to gather enough volume to make enough profit to be a going business. As long as people have tons of venture money they can always look like they are a real business. The only hope for players even as well publicized like HotelTonight is acquisition. Selling rooms in 5 hotels in each big city is not a business.

     
    • Alex Bainbridge

      Hey Mobile Guy (great name!)
      You mention volume – do you believe it is possible to drive volume (to any kind of travel service) via a mobile only channel (i.e. without any other non mobile channel such as a call centre, a shop, a website or a distribution network) – or is it specifically the Hotel Tonight model you are referring to

       
  7. Joe Haslam

    Hi, I´m Joe Haslam, the Chairman of Hot Hotels. Thanks for the mention.

    This is an excellent article on a topic that is being widely debated. Priceline CEO Jeffery Boyd has made comments similar to HRS CEO Tobias Ragge

    It is good to see Sam Shank in bullish mode. Its absolutely possible that Hotel Tonight can become a household brand name for travel and if they go public that will benefit all of us in the sector.

    The question I would have asked Ragge though is “if last minute booking players are not a threat why did JustBook have to take HRS to anti trust?
    http://en.wikisource.org/wiki/JustBook-HRS_preliminary_injunction

    Despite what he is saying, I bet he has someone who compiles a monthly (maybe even weekly) report of the last minute apps.

    From Hot Hotels, our message to Ragge (and Jeffery Boyd of Priceline) is that we concentrate on the market problem of unsold rooms. While we can sell the rooms that hotels cannot, apps like ours will exist.

    Same-day rooms is a big space ($90 billion is the figure Sam Shank uses) and so there is a lot to play for.

    Sit ludos incipiunt!

     
  8. Michael McCartan

    We think it’s about getting traction and remaining relevant to consumers and not all these last minute mobile players will be able to do that. I agree most will disappear in time.

     
  9. Brian Steel

    WorldCallButton is based on research undertaken on how travellers use information sources. A perceptual mapping process demonstrated that internet based searching was used for gathering information, while direct telephone contact with the supplier was used for reassurance. In the perceptual map, these attributes were at opposite ends of the spectrum. WorldCallButtton is a “click-to-call” global 800 service where buttons can be placed on webpages to initiate the call to the product provider. It also captures the contact details of the caller. Last-minute booking through a third party is self-extinguishing because once a traveller has made a booking through this process and become satisfied with that product, then they will subsequently book direct with that product. Last-minute relies on a constant flow of “new experience seekers” into the chain and I agree with Ragge that this product will not last and the product lifecycle has already peaked. There are a plethora of players in this limited market and their individual products only have the effect of creating confusion as to which one is best. Where confusion exists, then the person making the booking is more inclined to use traditional channels and traditional brands for reassurance

     
  10. Oz Har Adir

    Frankly, I think that HRS CEO is right: tonight only bookings have low commissions (about half the avg hotel booking commissions) and by definition it applies for a limited use case and consumers like freedom.
    Add that to the need to sign and maintain enough hotels because the idea is direct relationship and you’ve got something that is different than innovation: its called niche, and a tough one.

    If the tonight only booking apps can keep loyal customers (and save on the highest cost in travel which is user acquisition) and keep their costs of hotel relationships low thanks to their concentration, they can become a viable niche product. I don’t see it as an IPO material, but maybe HT sees numbers that I miss.

     
  11. Alex Bainbridge

    Many people out there thinking about a tours & activities “Hotel Tonight” (or as it would be in our sector – “Tours Today”). Similar debates as per above in our sector too.

    (Significant problems for this model in tours & activities come from voucher redemption printing or mobile QR coding, last minute availability data (booking at 1 hours notice) and a few other things – none of which is trival as a standalone app)

    Only way forwards (in tours & activities) is to be based on APIs from existing infrastructure (e.g. the reservation system layers).

     
 
 

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