For now HotelTonight’s two-side market place seems to be working is it just a matter of time before it becomes an acquisition target?

With all the consolidation that is happening in the industry right now, not to mention the obsessive focus on mobile, you could say that HotelTonight, a mobile only platform for last-minute bookings, is ripe for the taking.

However, while Jared Simon, chief operating officer and co-founder of HotelTonight, is not writing his company off as an acquisition target, he says any deal would have to be in line with its mission. And that mission is, he says, to change the industry, bring back spontaneous fun and allow people to take advantage of serendipitous events as they travel. Oh, and HotelTonight also wants to bring this to the masses.

“Whichever path gets us to that faster, then that’s the path we want to go down, but our primary driver will remain building a game-changing business for industry,” he says.

So far, the app has been downloaded over 13 million times in 36 countries and over 1,800 cities

Building value for both

Philosophically, the firm claims to take a different stance to others.

“We do see ourselves as a two-sided market place and our customers as both the people who book the hotel, and hotels that need to move inventory. And we want to build value and long-term relationships with both,” says Simon, who argues that, in general, that’s not the way OTAs operate.

Of course, many intermediaries today would disagree, but there is an argument that the travel industry today has become too obsessively focused on securing the booking. And once the transaction is complete, the booker becomes practically irrelevant.

“We are focused on the relationship not the booking which is why we invest a whole lot in getting people to download the app. The last thing we want is for them to book once and never see them again,” he says.

For this reason HotelTonight takes all its’ own mobile-optimised photography and writes all copy from scratch to ensure descriptions are interesting and engaging. The idea is to get people to use the app not just for booking, but for inspiration too.  

“We believe content creation is really important and while there is nothing in this that we can tie directly to conversions we do have conviction that building a great user experience will help us in the long term,” he says.

To this end, HotelTonight also vets every hotel - and today it has 15,000 hotel partners -preferring to keep these relatively small so “we can stand behind them”.  For example, in London only 15 hotels are displayed each day, and take responsibility to ensure they are excellent in their category.

Early adopters

HotelTonight’s approach has been to target early adopters of technology to create a buzz and build a community.

“As long as we get a seal of approval from that tech community, other people are more likely to try. That approach is working well around the world,” Simon claims.

Ongoing investments to ensure that the technology is updated, is another way the firm aims to stay ahead. One advantage of being a mobile-only player is that you can be 100% certain of is that the customer is carrying a mobile phone, and of their location, avoiding any dilution of a new product. 

HotelTonight’s GeoRates (formerly 'Rate Drop' and 'Bonus Rate'), which allows hotels to accurately segment and target users in location, is one such innovation. By knowing where the customer is hotels are able to target users with what the company describes as ‘unprecedented deals’ in the right place and at the right time.

Simon explains further: If a hotel is usually 20% on weekend with guests from Los Angeles but on weekend occupancy is down to 10%, then GeoRates allows them to push location-specific discounts to anyone who opens the app in LA. The discounts are specifically targeted to specific regions and times which, says Simon, offers hotels a higher level of control and flexibility, and the ability to reach new customers, while filling rooms.

“GeoRates helps put hotels in control and that’s antithetical to the model of the big OTAs,” says Simon, adding that a lot more can be done to add value for both the app user and the hotel while in location.

So while the likes of booking.com have tried to play copycat with developments like Booking Now, Simon believes that because the online giant’s focus isn’t purely mobile, their offer will always be somewhat diluted.

No doubt the mobile-heads at Booking will disagree.

Heading down under

Most recently, HotelTonight opened a new office in Sydney and has its sites set on the Asia Pacific region next. This was spurred by the fact that although Australians outnumber all others booking on the app, HotelTonight had no inventory of local hotels. So Australians were booking hotel deals for trips outside the country using the app.  So far are the 1888 Hotel, The Darling, The Lyall and TFE Hotels Group.

Like we said, a four-year-old on a mission. Now we just need to wait and see how long it stays independent.