IN-DEPTH: An insight into the world of 5 online travel start-ups: Gogobot.com, Hipmunk, Hoteltonight.com, Backbid.com and Room 77

Published: 18 Aug 2011

IN-DEPTH: An insight into the world of 5 online travel start-ups: Gogobot.com, Hipmunk, Hoteltonight.com, Backbid.com and Room 77

By Ritesh Gupta

Personalisation, simplicity, convenience, transparency, swiftness… new start-ups promise all this and lot more as they jointly strive to create a new era in the travel sector.

Travellers today expect more information to be readily available at their fingertips throughout the entire travel cycle, as well as more powerful tools to make sense of it all. Mobile, social, search, and local are emerging as key areas of consumer transformation. With travel being one of the largest purchased verticals online, it’s clearly a time of change. Shifting waters tend to create opportunities for upstarts that have the tolerance for risk and the nimble business approach to accelerate into growth.

EyeforTravel spoke to following emerging travel ventures to assess the current sentiments in the marketplace:

• Roger Wong, Director of Product & Marketing, Room 77

• Chris Patridge, Chief Backbid Hotelier, Backbid.com

• Travis Katz, CEO, Gogobot.com

• Adam Goldstein, CEO, Hipmunk

• Sam Shank, CEO, Hoteltonight.com

These five companies, along with BusinessTravel.com, are scheduled to present at the forthcoming Travel Distribution Summit North America 2011, to be held in Las Vegas (19-20 September) this year.

Excerpts:

Ritesh Gupta:How do you assess the timing of your venture from the travel industry’s perspective?

Travis Katz: Travellers have become increasingly reliant on technology for trip planning. But with the growing number of online resources comes an increase in unreliable sources, planted reviews and general confusion about what sites to trust for what services.

The timing is ripe for Gogobot – by harnessing the power of social media - the site enables users to get on-the-ground insight and personalised reviews from sources that they trust – something that other major travel sites just can’t offer. Gogobot gives today’s savvy, social media-using travellers an experience beyond a normal cookie cutter travel experience.

Adam Goldstein: I think our timing is perfect. The industry is dominated by established companies stuck on ancient technology who haven't meaningfully innovated their search experience in a decade or more.

Sam Shank: As we are based in Silicon Valley, we saw first-hand the growth of mobile as a platform, and the need for a “mobile first” hotel booking service. Right now, web-based travel agencies have a mobile division. In a few years, we expect this to be the primary division of these companies, with a secondary “legacy online websites” divisions. While this transition is taking place, our mobile-only orientation gives us the ability to focus and innovate.

Separately, in conversations with hotels, we identified the need for a new, flexible channel to move distressed, last minute inventory through mobile channels without onerous commitments.

Chris Patridge: The distribution side of the hotel industry is expanding exponentially as new channels promising the same thing - the absolute lowest price on hotels – launch daily. While savvy hoteliers work to drive bookings through the lowest-cost channel, rate parity agreements often undermine these efforts.

At Backbid, we feel that the time is right to give hotels a better choice. With our model, hotels can see who is coming to their market, how much they are willing to pay, and what their travel preferences are. With this knowledge, hotels are able to create personalised offers and deliver them directly to consumers. Value-adds, such as free parking, free Wi-Fi, and room upgrades sweeten the deal for consumers and maximise RevPAR for the hotels.

Roger Wong: It’s an exciting time to be a startup in the travel industry right now, given all of the technology innovation in recent years. Travellers today expect more information to be readily available at their fingertips throughout the entire travel cycle, as well as more powerful tools to make sense of it all. Within the hotel and lodging space, for example, travellers are looking for more information but finding largely commoditised information. At Room 77, we are focused on making hotel room information transparent as the underlying foundation to empower travellers to create better travel experiences.

Ritesh Gupta:Which gaps/ opportunities are you trying to address through your offering?

Travis Katz: By creating a dynamic resource for trip planning, we’re taking out the guesswork. Guidebooks and generic websites can give some generalised ideas about places to stay or things to do on your next trip. Gogobot takes that idea and makes it personal, providing a tailored view of what you should do on your next trip, based on your own tastes and interests. Now, instead of devoting a whole day wading through anonymous online reviews or sitting in your local bookstore, Gogobot gives you trusted suggestions with just a few clicks.

Adam Goldstein: We're trying to take the agony out of searching for flights and hotels. The experience on our competitors is time-consuming and infuriating—from the pop-up windows to the endless pages of search results. On Hipmunk you always know what you’ll get: a single page with the most relevant results, helping you visualise the best choice.

Sam Shank: For consumers, our goal is to provide a drop-dead-simple way to book a great hotel at a great price, instantly. For hotels, we’ve created a marketplace to sell distressed inventory in a safe channel that preserves their brand and price integrity and exposes the hotel to an attractive audience of smartphone owners. HotelTonighters are upscale, tech-early adopters and active on social networks. Our hotel partners love this demographic, and also the fact that we’re delivering new customers - 92% of our bookers are first time guests to the hotel they book.

Chris Patridge: As it stands now, there are few, if any, online distribution channels that are effective in allowing hotels to add value to their rooms, rather than discounting their rate, in order to compete in the crowded hotel environment. With Backbid, hotels are empowered because they have a great deal of pertinent information about the needs and wants of their potential customers: the rate they are willing to pay, number of travellers, room type, and thanks to our detailed traveller profiles, service/amenity preferences, and even their memberships to loyalty programs. This data enables Backbid hotels to effectively target consumers and generate new business, using a flexible and cost-effective tool.

Roger Wong: We're trying to address a real imbalance in the hotel purchase process by empowering travellers with better information about the specific rooms in a hotel during the research and shopping phase. Of course, this also helps hotels better market the differences between different categories of rooms, and offers some interesting opportunities for upselling and merchandising.

In the past, you had to rely on a knowledgeable travel agent or a well-traveled friend to provide you with room recommendations at a given hotel. Or, maybe you just rolled the dice and took your chances on getting a good room. But we now have an opportunity to change the nature of the conversation from “Which hotel should I stay in?” to “What type of room best fits my needs as a traveller, and which hotel is best able to meet those needs?” The good news is many hotels recognise this is where we're headed and are partnering with us now to help architect the technology systems to make this more seamless for their operations and consumers.

Ritesh Gupta:How do you think your offering is going to set a new benchmark in the travel industry?

Travis Katz: By tapping into the power of social, Gogobot helps people plan their next trip by making informed decisions on where they want to go and what they want to do. Instead of trusting their vacations to an anonymous review, users are absorbing honest and heartfelt recommendations from people they trust. Gogobot is creating a new benchmark of trust in trip planning.

Adam Goldstein: We have drawn people’s attention to user experience as a massive competitive advantage.

Sam Shank: As we built our entire platform for the mobile use case, we have many advantages over other mobile apps that connect to website back ends. Hotels rave about our time-sensitive Happening Tonight messages, that are posted by hotels to provide special savings or news about their property. But the innovation that is having the biggest impact on the industry is our 10-second, 4-tap booking process, from app open to booking receipt. 10-seconds wasn’t easy to pull off, but we’re looking to shorten this process even further.

Chris Patridge: The growth of social media, and the changes that user-generated content have had on the hotel industry, illustrates consumers’ search for empowerment. Backbid answers this call by having hotels bid on consumers’ business, making it easy for consumers to sit back and receive bids that will add value and save them money on their upcoming hotel stay. This sense of empowerment is the emerging benchmark that is being seen throughout the e-commerce space.

Roger Wong: Before we launched Room 77, we heard the same stories about how a bad room really affected their overall travel experience. We've certainly experienced it ourselves -- the feeling of the whole room assignment process being a crapshoot at the front desk. Will I get a bad view? Will I get a quiet room? We really felt that travellers shouldn't have to gamble on their room anymore, so we looked for a way to collect and share critical room data, at scale, across thousands of hotels. It's a challenge, but we're up for it. We believe we're firmly setting the benchmark in making this data transparent and creating a new standard for hotel search.

Ritesh Gupta:How is your offering going to be beneficial for travellers in their travel planning and buying cycle?

Travis Katz: Gogobot creates a personalised and curated guidebook for your next trip. With the push of a few buttons, a comprehensive and unique trip plan is born. Hotels, restaurants, sights, and more are at travellers’ fingertips. Through the site, users are already able to book a place to stay. By creating these personalised recommendations, travellers can feel more confident in their planning and buying decisions.

Adam Goldstein: We save them time and energy. Rather than spending hours searching for travel, we can help them find the best option in a few minutes.

Sam Shank: The HotelTonight target market is people who didn’t necessarily plan to book a hotel when they woke up that morning. Sometimes, they book a hotel because something unforeseen happened, such as inclement weather or a last minute business trip. But a majority of our purchases are driven by serendipity and spontaneity, such turning a birthday celebration into a overnight staycation in a hip local hotel you’ve always wanted to experience. In this regard, we’re generating primary demand and growing the size of the travel industry. Our mission is to make the world a more spontaneous place, and our bookers are telling us that we’re accomplishing that goal.

Chris Patridge: Backbid allows consumers to sit back, relax and let hotels do the legwork of creating personalised bids designed to meet their specific travel needs and desires. Rather than continuing to search (even after booking) to ensure that the rate booked was actually the best one available, Backbid does it all for consumers, freeing them up to spend that time planning the rest of their trip.

Consumers do not just want a lower price, they want value for their spend. For one consumer that may mean a room upgrade, for another loyalty points, and for yet another free Wi-Fi. These are all elements that hotels can include in their offer which have a higher perceived value by the consumer than cost to the hotel. It’s a win/win; the consumer gets what he or she prefers, and the hotel gets to do it with options other than lowering rates.

Roger Wong: For travellers who love to plan ahead and know the details of every aspect of their trip, Room 77 makes it easy to find a great room. Our virtual views and floor maps help guide travellers to the rooms that best match their preferences for floor, noise level and size. Being informed before you even step foot into the hotel means you won't find any unpleasant surprises. And these days, we all need to make the most out of every dollar we spend on our travel -- and if there's a room that's the same price as another, but offers a better view or more square footage, why wouldn't you opt for that room? It's all about being informed, prepared, and getting the room that's right for you.