Startup pitch: LastRoom pushes last-minute hotel booking service to corporates

LastRoom is another last-minute hotel booking service, but this time with business travellers in Latin America as a key target audience.

The startup was initially launched in December 2012 and came out of beta in April 2013 with its iOS app launch. Recently, the startup also launched its Android version. LastRoom mobile apps have been downloaded over 100,000 times since launch.

In September 2012, Argentina-based seed-fund investment company NxtpLabs Accelerator invested $25,000 in LastRoom.

LastRoom charges a commission fee from hotels for every booking made via LastRoom’s mobile app.

The startup says that in early 2013, LATAM had about 70 million smartphones, and in this Mexico alone accounts to 23 million devices, with a growing rate of 15%.

It also says the LATAM online hotel booking market is valued at $49 Billion, and Mexico accounts for $15 billion.

In Mexico, LastRoom has reached more than 50 cities, and since September the app also lists hotel deals in Colombia and Chile. It has direct contracts with more than 500 chains and independent hotels only in Mexico, mainly with big brands and boutique hotels.

LastRoom - Tnooz TLabs - Startup - Last minute hotel booking - 2

Q&A with co-founder Angela Cois below.

Tell us how you founded the company, why and what made you decide to jump in and create the business.

The idea of LastRoom was born on February 2012, during the Startup Weekend edition of Guadalajara (MX). We had already seen the model in the US and we were quite close to the industry because of our studies and previous startup experiences, so we thought it a was a great time to implement something similar in Mexico with the vision of being the best app for same-day hotel booking in the whole region.

Size of the team, names of founders, management roles and key personnel?

We are a team of six, along with an advisor:

  • Josue Gio (Co-founder and CEO)
  • Angela Cois (Co-founder and COO)
  • Julian Ceballos (Co-founder and CTO)
  • Eric Cordero (Co-founder and Mobile developer)
  • Josue Cámara (Co-founder and Web developer)
  • Jonathan Coutiño (Designer)
  • Alejandro Pacheco (Advisor) – Senior Executive at Expedia

Competition?

We know we are in a quite competitive industry. However, we think that the peculiarity of travel is that both travellers and hotels really don’t get married with a single OTA.

The hotel wants to sell and wants to be visible everywhere. During the initial phase of our launch, it was difficult to capture their attention since they really didn’t know us, now, after a bunch of expos, trade shows and six months of massive presence in the market, they come to us by themselves.

LastRoom is designed to help people find a room “on-the-go” and this means that the design is clean, with few hotel options that are also close to the user location and finally a smooth booking process.

What makes us different from HotelTonight? It’s main target in LATAM are American travellers and they are more focused on the leisure segment. The fact that it has started operations in Puerto Rico and Costa Rica recently is a proof of this strategy.

On the other hand, our main clients are business travellers and we want to be a reference for last-minute travellers in LATAM, taking the advantage of being very close to them in terms of culture, language and customer behavior.

What problem does the business solve?

UX of existent apps for hotel booking is really bad:

  • Search is difficult for the long list of hotel options and the mechanism of filters they use
  • Booking process is cumbersome, since you have to enter a lot of information on a small screen in order to complete your reservation

All these steps are friction points which really affect the experience of a mobile user. Ultimately, they feel stressful and move to a computer or telephone to make the purchase.

With LastRoom we want to improve this experience, make life easier to those travellers who are on-the-go and looking desperately for a hotel in the surroundings.

How did the initial idea evolve and were there changes/any pivots along the way in the early stages?

When we launched LastRoom we thought our clients were both leisure and business travellers.

After nine months of operations, we realized that the leisure industry is too seasonal and it does not guarantee a constant flow of sales. So, we concentrated our efforts on business travellers, they are more disposed to take last-minute decisions and buy in LastRoom at least 2 or 3 times per month.

Another pivot was with the deal model with our partners. During our initial stage of operation, we were focusing only on four and five stars properties, with a special interest in boutique hotels. We thought our clients were looking only for high-end and luxury accommodations. But, a major segment of our market in Mexico is made up of medium-class travellers, who goes after 3-stars hotels and medium-quality accommodation.

Why should people or companies use the business?

Because we provide last-minute travellers with the best experience ever seen for a mobile app of same-day hotel booking in LATAM. When you are on-the-go, you have no time and you are looking for a great hotel deal in the surroundings, LastRoom is the best solution.

What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?

Our go-to-market strategies are a mix of online and offline activities. The most relevant are: content marketing, social media buzz, local sponsorships and partnerships with complementary companies.

Moreover, three weeks ago we launched a new product, a free hotel-widget for event organizers called HotelWalla, an additional funnel of bookings for our startup.

Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?

In three years time we see LastRoom as one of the key players in travel industry worldwide, providing new and better technologies for mobile users.

We want to be a powerful ally for all those last-minute travellers who do care about using the best technologies available, which really could make their life easier.

What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?

Things can always be better. Travel industry is dominated by a small number of players who are too big to move quickly to improve travellers experience by leveraging new and better technologies.

They focus on profits and forget their clients, their needs and the real problems they face to when they are on-the-go looking for nearby hotel in their smartphone.

What other technology company would you consider yourselves most closely aligned to in terms of culture and style… and why?

We really admire:

  • Uber: We love the disruptive power of their model. They are trying to bring innovation to an industry which has been static for years.
  • WeHostels: They are one of the most interesting startups in travel now, the LATAM-based company shows the ambition of moving forward to scale globally.

Tnooz view

If one thinks LastRoom’s local presence (Mexico-only for now) would be an edge over its competitors, then HotelTonight CEO Sam Shank has a different approach to it, he says: “We feel putting everyone in one location is the best strategy for our business, rather than in the individual cities or countries they’re working on. There’s a lot more collaboration and problem-solving that way.”

LastRoom’s focus on business travellers is interesting. HRS CEO Tobias Ragge vouches for a similar trend among business travellers by saying, “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.”

A smart marketing/distribution effort taken by LastRoom is its launch of HotelWalla, a widget that can be embedded by any event organizers to show last minute hotels near the event venue.

On the innovation front, since the company stresses so much on usage of new/latest technologies, we will have to wait and see their product improvements/new roll-outs.

Vine video of LastRoom

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Karthick Prabu

About the Writer :: Karthick Prabu

Karthick was general manager for Tnooz in Asia until September 2014.

 

Comments

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  1. Valentin Dombrovsky

    Don’t know if Wehostels can be called a LATAM company as it was founded in US.
    By LATAM entrepreneurs – that’s true.
    Good luck. 🙂

     
 
 

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