November 2017, Amsterdam
Roomex proves room for growth in business travel
An Irish firm focused on delivering ‘value’ is taking the headache out of business travel, and with some impressive results
Roomex’s reach is far enough – ‘every hotel in the world’ is what it says. Yet this Dublin-based travel tech firm’s strictly defined platform means it does not hit the headlines that often: its niche is cutting the hassle out of booking hotels for business travellers. However, for the third year running it has been splashed over the news as one of Ireland’s fastest growing Irish technology companies!
This year it has again been named in the Deloitte Technology Fast 50, for which the main criteria is average revenue growth over the last four years. Roomex came in as No. 20 out of 50, in a group which generated a total of €858 million in combined revenues last year.
Announcing the winners, Deloitte Partner Joan O’Connor said: “….we estimate just under 90% of our winning companies’ revenues are generated by exports – this demonstrates the ambition and drive of Irish technology companies to diversify and the global nature of this business”.
Roomex seems to fit that mould. It has nine offices across Ireland and the UK, but its business and customers are international. It has access to corporate rates at over 650,000 hotels worldwide. With the business travel market put at $1.26 trillion and forecast to grow around 5% this year, followed by six then 7% by the Global Business Travel Association, that’s a great market to be in.
Corporate travel booking can be a headache
Co-founder and CEO Jack Donaghy has capitalised on saving the time, energy and money that is all too often wasted by companies when chasing a hotel in a right place at a good price for their people and sorting out the compliance. “Corporate travel booking can be a headache,” he says. “We’ve found an area that we believe in and can really get behind and serve well.” He says that Roomex has seen 100% growth in bookings each year since 2013 (it started in 2004).
As Roomex describes its model, clients “get their own dedicated hotel booking platform, customised to their own company's requirements. This is a password protected portal with access to corporate rates... It features all key hotels and key travel destinations for ease of access to the hotels and locations visited most… We can set up your portal immediately and there are no costs, no contracts and no ongoing fees.”
Priority for Roomex, however, is not just the price. Julian Kulkarni, marketing vice-president at Roomex, sets it out: “Of course, getting the best price is important to any company, and Roomex does deliver average savings of 21%. But price is not the same thing as value!”
Price is not the same thing as value
Listing what Roomex sees as the value it offers he gives: “Our customers typically report that the time taken to make a hotel booking is cut by a factor of ten (e.g. from 20 minutes to two minutes or less). We carried out a survey recently in which our customers said that they valued this time-saving benefit even more than savings against hotel rate cards.”
Roomex has shaped its service in line with surveys of its clients’ problems. In one “a third of the 400 respondents claimed administrative efficiency was the primary objective when corporate hotel booking, followed by 22% who cited cost savings and 13% time saving.
For 37% of finance and procurement professionals cost containment was cited as the main challenge when booking corporate travel.
Small-to-medium businesses were found to spend a huge amount on travel, the outlay ranking is one of the highest controllable line items affecting a company’s profitability.”
In particular, hotel accommodation is a major spend category which if left unmanaged leads to costs escalating. The Roomex survey found 25% of respondents said a lack of integration with accounting systems and another 25% said hotel invoices that do not match internal cost codes cause issues.”
Roomex displays the savings offered, takes the bills, consolidates and invoices its clients monthly with 30-60 days credit. To cope with its growth, staff now number 55.
A lean machine
So far Roomex founders have built their business with just one major outside funding round. In 2016, 12 years after first appearing on the Irish scene, they raised €3.5million from a range of investors that included former Hostelworld chairman Paddy Holahan and the chief technical officer of CarTrawler, Bobby Healy, as well as Irish Venture capital firm Frontline Ventures. That helped their expansion from leisure bookings into business, which had started a couple of years before.
The company makes its money from the hotels, which pay a distribution fee based on the size of their corporate clientele. Margins are tight, so its business is all about scale – but Roomex does now have over a thousand corporate clients on its books!
The business has moved from being Irish to UK dominated in terms of clients, but many of these are multi-nationals with operations in Europe, Asia Pacific and the Americas. On the back of this, Roomex is spoilt for choice on where to go next!