Room 77 comes out fighting as Concur reveals investment, pledges to out-Kayak Kayak
Of course, online travel agencies (especially Booking.com) are still immensely powerful players and then, most recently, Room Key crash landed on the scene with a promise of multi-brand search utopia.
On the periphery are the startups, such as Room 77, which launched in a blaze of publicity and has since gone on to raise over $10 million in funding from, amongst others, the backers of ITA Software, General Catalyst.
It now turns out that travel expense management giant Concur (also owner of TripIt) was part of the funding round last summer when it took a minority stake in the business, an investment revealed today when Concur announced record results of its first $100 million quarter in revenue for Q4 2011.
Clearly Concur sees something in Room 77 that it feels is worth taking a punt on.
So with 12 months now passed since launch, and having backers with a pretty high pedigree, on both the investment and operational side of the industry, is Room 77 about to start shouting a little louder?
It would appear so.
Founder and chairman Brad Gerstner says: “We think there’s a lot to be done in hotel metasearch – we’re going to out-Kayak Kayak by focusing like a laser ONLY on hotels just like Hotels.com and Booking.com, but better.”
Fighting talk, indeed.
Back over at Concur, CEO Steve Singh is also talking up his company’s profile, referring to Room 77 as the “Zillow of hotel rooms”.
Zillow co-founder and executive chairman Rich Barton also happens to be an investor in Room 77, of course.
Singh says Room 77 would benefit both hoteliers and their customers if its content about individual hotel rooms could be integrated into hotel CRS and property management systems.
“It would allow hoteliers to monetize their properties at a more granular level and push choice to the end customer,” Singh says.
He believes resistance from hotels would “change over time”. He adds: “I run a business that gets resistance all the time.”
Concur made a relatively small investment in Room 77 and a “more substantive one” in Taxi Magic, which enables business travelers to purchase ground transportation and integrate the expense into the Concur Expense system.
Singh says two things drive Concur’s investments: the ability to create as much content choice as possible for business travelers, and the ability to make it available to customers.
“If we can help foster that kind of innovation, bring it to market and make it available to our customers, then that delivers a tremendous user experience,” Singh says.
The Concur CEO argues that mobile is blurring the lines between corporate travel and consumer tools.
Singh believes corporate travel policies are diverse and he could see business travelers using Room 77 to pick hotel rooms in conjunction with corporate travel policies.
Alternately, he adds, perks outside the parameters of corporate policy could be billed to business travelers’ personal credit cards.
Asked if he could envision a larger investment in Room 77, Singh says: “What guides us is this: if it is innovative and delivers greater choice to end customers, we are interested in developing it.”
NB: Additional reporting by Dennis Schaal.
Kevin May is a senior editor and one of the co-founders at Tnooz. He was previously editor of UK-based magazine Travolution and web editor of Media Week UK from 2003 to 2005.
He has worked in regional newspapers (Essex Enquirer) and started his career in journalism at the Police Gazette at New Scotland Yard in London. He has a degree in criminology, a postgraduate diploma in magazine journalism and will be publishing his first book - a biography about electronic band, Depeche Mode - soon.