EyeforTravel catches up with a long-standing collaborator about its latest moves in a competitive sector
As a self-funded entrepreneur focused on organic growth, Tim Hentschel, CEO of HotelPlanner, is a man on a mission. His goal: to acquire entrepreneur led companies, with a track record in online travel, that will help his niche business - group travel for meetings, sporting events and weddings - to consolidate data and content and keep growing in a highly competitive sector.This week Hentschel edged a bit closer to achieving that goal with a six-figure acquisition of Internethotels.com, and sister company Hotelsatanywhere. Paul Simon, CEO of the two companies will join HotelPlanner, and is “excited to take these businesses to the next level” as business development manager. Like Hotel Hotline, acquired in March last year, this latest acquisition is a company that has been around since the late 1990s - the two additions to HotelPlanner opened doors in 1998 and 1999 respectively. According to Hentschel, they are in talks with other firms and more acquisitions are on the cards.
Hentschel says he is taking what he describes as “a contrarian investment approach” by focusing on entrepreneurial owner-operated companies. “I’m a strong believer in keeping the ownership structure within the operations of the business. That way you can always invest back into your customers and employees,” he says, “which you won’t see that from institutional money led companies”.
In no way is Hentschel dissing the travel two biggest players – Priceline and Expedia – which also happen to be partners of HotelPlanner. “These are highly successful and very well run businesses,” he says, “but I’m not naïve. I’m not naïve to think that even if I acquired a $2.5m company for every business day for the next decade, I’d still only be a quarter of their combined market cap, and that would only be if those companies grew by a 1000% over that decade to get to their combined value of $100bn. That’s the reality. We know we are mid cap. These guys [Expedia and Priceline] are not even large cap. There isn’t even a word for them now they are so huge.”
These guys [Expedia and Priceline] are not even large cap. There isn’t even a word for them now they are so huge
Still, with 30% topline growth in his own business over the past ten years, Hentschel believes that by acquiring the right companies they can do this again. And in the fast-growing and fast consolidating travel industry, which is big enough for everybody and he sees a gap in the market. “Institutional money has overlooked a lot of online distribution companies of the past which were the innovators in hotel distribution when the Internet started. Banks have overlooked that segment,” he says.
The companies he is looking to acquire are already partners in the group travel segment, which is an added bonus.
One of the things that Hentschel believes sets HotelPlanner apart is their investment in mobile. Some firms, he argues, have missed the transition from desktop to mobile which has meant the funnel is becoming so much smaller. And it could get smaller still, because of the focus on Artificial Intelligence (AI). “Whoever controls the AI is going to win the day, and this is going to be interesting,” Hentschel says, but in the group travel space, “of all the companies out there, we are closest to that funnel”
HotelPlanner has partnerships today with Priceline and Expedia and, says Hentschel: “Whoever those guys sync up with, and I’m sure they are going to sync up with somebody; when that person says book my wedding to their AI system they will come to us for that inventory”.
Tim Hentschel, CEO HotelPlanner, is an EyeforTravel sponsor and regular judge on the EyeforTravel Startup Awards calendar
May 2017, London