Distribution is a costly expense for hotels. Each time a booking is made through a third-party, commissions must be paid throughout the chain of distribution. While it’s convenient to capture demand from these channels, it’s not always clear that the commissions paid are worth the bookings received. The question of value is especially pertinent given that most hotels pay more for commission then they have in the past, per Kalibri Labs data: Kalibri Labs data from 19,000 hotels worldwide shows how much more hotels spend on distribution since 2015. The stark reality of rising distribution costs has led many hotels to broaden their metrics from the simple RevPAR to NetRevPAR, which adjusts for distribution costs within top line results. To deliver stronger profits (and not just greater booking volume), hotels must deploy a comprehensive direct booking strategy that pulls more bookings away from those third parties. One hospitality technology company in particular has stepped up to the challenge with a comprehensive set of direct booking tools: Triptease. “Paying large commissions for valuable guests is over. Identify and reach your highest-value guests first with a platform that works across the booking journey - from acquisition to conversion - to make sure they book directly with your hotel.” ~Triptease Triptease initially began as a price check widget on hotel websites and has since evolved into an end-to-end guest intelligence platform. Today Triptease helps not only improves hotel website and booking engine conversion rates but also helps hotels bring more prospective guests into the top of the funnel with tools that improve the ways they market on 3rd party channels like OTAs and metasearch platforms (e.g. TripAdvisor). The company’s website optimization tools then convert those guests more often with personalized offers, notifications and even website live chat. When used in combination with a hotel’s existing marketing efforts, these tools are a powerful driver of direct revenue. Here are 5 reasons why hotels need Triptease’s direct booking tools to boost business in the direct channel. #1: Attract the most valuable guests to your hotel website With intelligent audience acquisition, hotels get more of the right customers. Triptease’s platform ensures that your hotel reaches the most valuable guests first. With its metasearch ad tool, Triptease’s system identifies and prioritizes high-value guests for conversion. The tool promises to “bring the right guests straight from search” so that your advertising spend can be targeted to the guests most likely to convert. The secret sauce here is that Triptease aggregates and analyzes your hotel’s data to calculate a precise bid amount. The tool adjust bids according to the potential value of a stay, as well as that individual guest’s likelihood to book. To get to this ideal bid, Triptease uses two different systems: the Guest Value Index, which judges how the guest’s purchase intent compares to your hotel’s ideal customer profile, and the Trip Value Index, which is calculated from the booking’s qualities, such as parity and overall booking value. Hotels stand to gain a lot from these calculations: Triptease Meta aims to drive metasearch traffic that pays for itself with an additional 10% of direct revenue for hotels. More guests at a lower cost drives profitability for hotels, which is the core value proposition of Triptease’s guest intelligence platform. #2: Convert more lookers to bookers The goal of attracting more guests, and converting them more often, is driven by Triptease’s focus on transparency and trust. Thanks to blanket discounts and “Only X rooms left!” messaging, there’s a lot of mistrust and skepticism around hotel search. Triptease works to build trust by letting guests know that they’ll get the fairest price on the direct channel. The Triptease Price Check Widget shows guests how much that same search would cost on three OTAs. The popular tool provides price transparency and boosts trust with guests. Rather than pretending like guests weren’t shopping around, the Price Check Widget calls attention to it by giving guests the confidence to book direct. Triptease has expanded on the widget with a full suite of conversion tools. Now, the platform includes non-price offers, such as offering a value-add bonus for booking direct, as well as highlighting recent searches and essential information about a hotel’s location. In total, there are thousands of messages across multiple content types that hotels can use to convert lookers to bookers. Messages can also be personalized dynamically to different types of guests, so that hotels can best target message to demographic. This intelligent targeting improves conversion. #3: Compare rates and track parity The Disparity Dungeon sounds like a terrible place to be. And that’s by design. This Triptease feature ensures that your hotel is priced competitively compared to your comp set -- and that your rates are in parity across your distribution channels. By monitoring parity often, hoteliers can make sure that guests always get the best rates when booking direct. Triptease has also recently expanded to include wholesalers here so the tool aids hotels with often-contentious wholesaler relationships. While there are certainly standalone tools for tracking rate parity, such as OTA Insight, there’s an advantage to packaging it into a direct booking platform: namely, ease of use. It’s right there within the same tool, so there’s no need to click away to another login screen. This ease of use also extends to format: Triptease provides regular weekly emails that identify surge events and other trends. By understanding when and where parity is changing, hoteliers can identify issues without necessarily having to watch parity daily. For those that want to monitor disparity in real-time, there’s a live feed of every search on your website that’s being undercut by an OTA. Hotels can also opt into instant alerts for parity violations. Armed with this information, hoteliers can identify the patterns and root causes of rate disparity. They can then use the documentation provided by Triptease to bring parity issues to their account reps at major OTAs that assist in the negotiation process and ultimately can help lower commissions or drive more bookings over the long term. #5: Assist your customers with live chat In its bid to be the “everything” store for direct bookings, Triptease has recently added live chat to its platform. Chat keeps the guest’s attention and gives hotels a clear path to capture bookings. Hotels can reach out directly, answer questions, and generally be accessible. The chat interface is optimized for mobile, making it easy for your reservations team to connect directly with guest’s in the channel they prefer (which is increasingly mobile). There’s also an automated component to the chat tool. The Triptease automated AI chatbot also answers the most frequently asked questions to instantly assist guests. The automated live chat can also check availability and take payment details right in the chat interface. By removing pain points, the path to purchase is smoother and more likely to convert. #6: Know what works with OTA-level data OTAs promise not just bookings. They also promise a level of data that’s hard to beat, especially for hotels that don’t necessarily have a sophisticated data capability in-house. Triptease turns this on its head by providing OTA-level data on who books direct, where they come from, and who they are. The Insights Dashboard gives hotels all the necessary numbers to build a direct distribution channel that works for their own unique situation. The analytics provides complete visibility into hotel performance, as well as broader industry benchmarks for comparison. That type of granular, interaction-level data is comparable to what OTAs leverage to make more money for their own channels. Hotels can compete using their own data, and maintain a healthy (and growing) direct distribution channel. Pricing and getting started with Triptease Triptease prices packages depending on which products a hotel wants, as well as the scale of the hotel’s needs (for example, multi-property applications). As far as implementation and setup, there’s not a lot required of hotels to get started. Hotels will need to add some code to their websites to support specific products. The most complex part is connecting the Triptease platform to existing data sources to power the hotel-level insights. Triptease offers extensive coaching, so it’s not just providing software but also the knowledge layer and long term partnership for amplifying direct bookings. Triptease has a global team of Direct Booking Coaches available to assist hotels of all sizes. From digital marketing to website optimization, data analysis, and product training, these coaches apply their regional expertise ensure ongoing success for partner hotels. To get started with the Guest Intelligence Platform, schedule a demo with the team right from the Triptease Hotel Tech Report profile.
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Before signing up with an independent loyalty program it’s important for hotels to reflect on why branded loyalty programs like Marriott Bonvoy and Hilton HHonors add value. These types of loyalty programs incentivize guests to book with a brand by offering experiential and monetary incentives. Experiential incentives include things like room upgrades, WiFi and late checkout which sway frequent travelers into booking via a loyalty program because they actually get better treatment than the average guest. Monetary incentives enable loyalty program members to experience higher property tiers which also can drive loyalty. For example, a frequent Marriott Courtyard business traveller can build up points and use them towards a stay at W Hotels where they ordinarily wouldn’t have stayed. By staying at a higher tier property within the network that guest now has a haloed perception of the Marriott brand as a whole. Circa 2010, independent hotels took note of the massive growth in branded loyalty programs and banded together via programs like iPrefer (by Preferred Hotels & Resorts) and Stash Hotel Rewards. An April 2018 study by Oracle Hospitality (study here) highlights the dynamic that helped such programs grow. Namely, there is a discrepancy between hotel perceptions of loyalty programs and the reality of such programs. According to the study, hotel managers believe that 61% of guests sign-up for loyalty programs while in reality only 24% actually do. Similarly, hotels perceive that 54% of guests will find offers relevant while in reality only 22% of guests believe that offers made by loyalty programs are relevant. Revinate summarizes data from Oracle's loyalty study Just because hotels overestimate the value of loyalty programs doesn’t mean that they don’t add value. Ultimately even small volumes of incremental bookings can still deliver a high ROI so independent hotels should still consider joining an independent loyalty program but should do so with realistic expectations. Independent loyalty programs that try to mimic branded programs rarely work. Smart hoteliers know that points are mostly irrelevant when it comes to the world of independents since booking with another property in the network has no impact on loyalty for your own property. The landing page for Destination Hotels & Resorts’ Destination Delivers program is a testament to the death of points for independent hotels: "This unique loyalty club is filled with perks. Not points." ~ Destination Hotels & Resorts A 2019 Revinate study shows that groups with more than 50 hotels can sometimes benefit from pursuing points based programs while smaller groups (under 50 properties) rarely benefit from such programs. When loyalty members receive points towards a program like Marriott Bonvoy their loyalty is building towards Marriott corporate rather than towards an individual property or sub-brand. The problem with what we call ‘independent loyalty 1.0’ (e.g. iPrefer and Stash Rewards) is the misconception that loyalty is actually being built towards a specific property. Where programs such as iPrefer and Stash Rewards are still operating dated points based system models, Guestbook Rewards is a new kind of loyalty program that is more in touch with how today’s traveller behaves and books. It's worth noting that Preferred Hotels & Resorts has sales infrastructure and relationships with travel advisors that bring material business for it's portfolio. The firm also provides cost purchasing benefits so while the iPrefer value prop is in our opinion relatively weak there are other facets of the program which are definitely attractive for independent hotels. Guestbook Rewards understands that driving true guest loyalty to independent properties by giving points to spend at other properties is a near impossible feat. As a result, the Company has positioned itself as a way to increase conversion on hotel websites via offers and cashback. Guests choose between three options: 5% cash back, a 5% charitable donation or 15% trip cash that can be used within The Guestbook’s network of ~700 hotels. By offering cashback through a 3rd party, hotel clients are able to circumvent rate parity clauses with OTAs and create their own version of a private offer program like many of the brands have today and leverage exclusive loyalty network pricing to bring in more direct bookings. Independent hotels should explore the Guestbook because they want to incentivize direct bookings without breaking parity, not because they expect material bookings from The Guestbook’s loyalty program member base. While expectations should be modest the Company now offers a "Guestbook Guarantee” of fully offsetting its fees with new inbound business. To their credit, The Guestbook recognized this and developed a Chrome Plugin called Gopher which helps internet browsers find the best hotel deals by scanning hotel websites in real time. According to the Google Chrome store, the Gopher plugin has ~3,600 users so it’s unlikely to drive material volume for clients today but has the potential to solve the problem and is a clear demonstration that The Guestbook has a better pulse on technology and internet behavior trends than most of its competitors. The Guestbook claims that it also has a similar number of users in the Safari App store but Apple doesn't publicize figures. Gopher has taken queue from a company called Honey which allows shoppers to check prices while shopping ecommerce websites. While the Gopher strategy doesn’t seem to have paid off yet for The Guestbook, the Honey plugin has grown to 10M+ users which is a testament to the larger opportunity around online shopper price checking if the team can figure out the right growth strategy over the medium to long term. Independent hotels that are looking to increase direct bookings can benefit from joining a program like The Guestbook but benefits can vary property by property so it’s important for hoteliers to read authentic peer reviews and request unmoderated referrals to properly evaluate the program. Read Guestbook reviews Request Guestbook references Independent hotels should think of The Guestbook’s program as a substitute to a direct booking platform like Stay Wanderful which also offer rewards for booking direct but can be used in tandem with platforms like Triptease. Where The Guestbook has a narrow focus on facilitating offers, platforms like Triptease have a more comprehensive and data driven website conversion optimization approach. Stay Wanderful sits somewhere in the middle. We sat down with The Guestbook’s Dev Dugal to get his take on where independent loyalty has been and where it’s going. Dev brings an interesting perspective to the discussion having previously owned his own hospitality business and also having worked in several mid sized hotel organizations before making the leap into hotel software and technology. Dev advanced quickly in his career by leveraging a unique combination of interpersonal skills and technical adaptability. As a hotelier, Dev was always a technology maven who constantly sought to implement new technologies and marketing strategies for his hotels. His story provides a roadmap for competitive hotel marketers seeking to beat out the compset and also for hoteliers with aspirations to leverage their hospitality skills to build a successful career in technology. Dev is widely regarded in the hotel community as a networking guru and marketing expert so we were lucky to catch up with him in between his jet setting. The Guestbook's Dev Dugal Tell us about your career in hotels. I started my career in hospitality as a barback in some of the busiest bars in LA. Eventually working my way to bartender, manager and eventually opening up my own bar in DTLA in 2006 called The Redwood. The bar business was very exciting but once my wife and I started a family, I sought a different pace of life and not the 3am late nights. So I transitioned to the hotel space in 2008 joining a family owned Hospitality company called Globiwest Hospitality as their VP of Marketing & IT. I was immediately tasked with helping to launch the first independent boutique hotel in Brooklyn called Hotel Le Bleu. Next, joining broughtonHOTELS as VP of Sales & Marketing, I led the marketing vision for 16 hotels on the California coast and Chicago. During both roles, I challenged myself to cross train in Revenue Management, Operations and Finance. More importantly I enjoyed working the Front Desk and Housekeeping to stay grounded to the heart of the hotel. I took a hiatus in 2014 for a few years to start a non-profit focused on building schools in the slums of India and re-entered by joining an amazing team at The Guestbook in 2017. I consider myself a connector of ideas and people. Hospitality gives me that platform to shine, travel the world and impact businesses. I also gravitate to boutique hotels rather than brands as they allow for much more creativity with an elevated curated experience for the guest. Some of my most challenging times in hotels were working with Owners to clearly grasp digital marketing concepts. Similar to how people self prescribe diagnosis after reading WebMD, hotel owners often dictated marketing direction with buzzwords like PPC or SEO however, never fully understanding them. This was a consistent battle but I thrived in those challenges and breakthroughs, eventually letting the analytics speak for themselves. What was one technology that you couldn't live without in your former role in hospitality? Google Analytics has always been a solid tool to use as a source of analytics. It provides for so much data in one place to see real time the success of integrated strategies. One of the most important tools in the last few years was the CRM tool. It provided a landscape to work within the entire life cycle of the guest experience and the digital touch points were a vital part to success. When did you first become interested in leveraging technology to become a better hotelier? I think it started when I had an early stint in Real Estate as an agent. In the early 2000's I saw veteran agents knocking on doors and buying ads in newspapers. I realized leveraging technology was the more efficient way than knocking on doors. So I slowly built up a database of emails to over 15k and sent out a monthly newsletter for lead generation. With that same logic I noticed that trend in the hotel space in 2008. After the financial crisis, hotels were scrambling for business and heavily relying on the OTAs. With the help of eCommerce and integrated solutions, I knew this was the future for hotels too. I became an avid reader of industry leaders and leveraged the best of breed in marketing practices shortly after. As a hotelier what was your biggest frustration with technology vendors? One of my biggest frustrations with technology vendors is the sneaky "Auto Renewal". I got burned by a vendor early in my hotel career and they wouldn't let me out of the contract. Talking to friends in the business I discovered this was a shared pain point. After that first incident, I made a decision to never let it happen again and continue to share my technique with hoteliers today. Right after executing an Agreement with any vendor, I immediately send them an email stating my notice to not renew. Literally the day after the ink is dry. The notice indicates that we do not intend to renew and will discuss the option as the renewal period closes in. Most importantly, I have them confirm it in writing over email. This leaves a nice audit trail for anyone on my team and with the vendor should there be a change in management. What is the biggest misconception that hoteliers have about technology? Some folks tend to overanalyze technology. I love that we have the ability to A/B test products and solutions. However, some hoteliers never get out of the starting gate. One of my mentors really honed in and taught me about the age-old saying, "Perfection is the enemy of good." He was the first leader that forced me to break previous habits of "getting it right" and simply start. He said to get it "good" and clean up the mess along the way. With this in hand, we were able to test out many new technologies and marketing strategies. Tell us about your journey from hotelier into technologist? Funny thing is that I started my career as a computer nerd. I graduated with a Computer Information Systems major in college and spent my early career coding in a cubicle with .NET development and SQL. I started bartending at night to have a break from the tech world. So in a way, technology has always been a part of me before becoming a hotelier. Now I'm able to leverage and have a real passion for connecting those dots to business strategy. What was the most challenging part of moving from hotels into technology? For me personally, losing a little of the human touch and pulse of the hotel. With the technology, it's very easy to only have digital relationships. Being a hotelier provided opportunity to be at the Front Desk, walk the property and connect with guests from all around the globe. I miss those elements. The Guestbook has become the clear independent loyalty leader and disrupted incumbents in a very short period of time - what’s driving that growth? The Guestbook is the first and only Cash Back Loyalty platform for independent and boutique hotels. We work with over 700+ hotels in 65+ countries to increase direct booking conversion on a hotel's website by 20%+. Guests have the availability to earn and redeem either of 3 options; 5% cash back on their stay, donate that 5% to any charity of their choice, or 15% Trip Cash towards a future Guestbook stay at any of our properties around the world. No set-up fee. No commitment. Cancel anytime. Imagine that you're going to open the hotel of your dreams tomorrow. What kind of hotel would it be? Independent boutique, Select-Serve maybe with a lobby bar. I'm a big proponent for Downtown LA and feel there is also opportunity in markets like Oakland. 75-100 rooms paying homage to local street artists. I'm also a big fan of the bed+beverage concept. Bar on the ground floor and maybe 40 keys above into an integrated space. Can't reveal any names just yet as I already have some domains secured. ;-) What technology would you leverage at your hotel? Cloud based PMS, robust CRS with significant channel management integration, backed by an easy to use CRM. An AI smart concierge, eventually reducing the dependency on the front desk and of course a rewards platform, The Guestbook! What's one piece of advice you have for hoteliers who have dreams of working in technology one day? Read (books, not social media) + source mentors. Mentors have been integral to the trajectory of my career. Balanced with what you learn from books with the real life experience of mentors. Book knowledge + street knowledge. What's one podcast, newsletter or book that you recommend hoteliers read if they'd like to eventually move into tech? Glenn Haussman has a series of great podcasts (No Vacancy). I love reading about direct booking strategies so Triptease blog, OTA Insight newsletters and webinars are underrated. A free interactive webinar with live Q&A is one of my favorite places to learn. What is your favorite hotel in the world and why? Currently, I'm digging the CitizenM brand. The simply went against the grain and put the guest experience first. For example, they went with King sized beds when everyone stuck with Queens. Their founder said something to the likes of, "If a car is Tesla, then a hotel is CitizenM". I dig that and their hotels are awesome. What is the most exciting technology you've seen in the hotel tech space lately? The team at Go Moment have been working on some neat AI tech with their smart concierge. The tech gets smarter and smarter with more data points and interaction from a guest perspective is seamless. What is one thing that most people don't know about you? Recently, I moved our family of four from the comforts of Los Angeles to Spain! We are giving our children an opportunity to be global citizens and honing my skills in being a true digital nomad. Experiences over things.
The acronym API stands for application programming interface although for most hoteliers it might as well be gibberish. Don’t stress though, because the concept is actually quite system. In the early days of software, systems were server based which meant that they rarely (if ever) spoke with each other. Think about that first Mac in your house before the internet - it was very much a lonely island. As processing power advanced and internet speeds increased exponentially software became easier to develop and more accessible. As the world shifted from a myriad of lonely server based systems to an ecosystem of hyper connected platforms there grew a need to enable seamless communications amongst those systems - enter the API. Ok, let’s use a hotel analogy to better understand the concept. Imagine you’re sitting at a table in your hotel’s restaurant. The kitchen is the part of the “system” that will prepare your order. What’s missing is the critical link to communicate your order to the kitchen and deliver your food back to your table. That’s where the waiter (or API) comes in. The waiter is the messenger – or API – that takes your request and tells the kitchen – the system – what to do. Then the waiter delivers the response back to you; in this case, it’s your food. APIs are effectively messengers of data between applications. Every time you book a flight on Expedia you are using an API that delivers pricing and availability from the respective airline’s database onto Expedia’s website. That same dynamic now happens between hotel software and hardware systems. Hotel Tech Report recently published a story about Volara’s Alexa for hotels voice activated tech and its ability to turn off room lights via Honeywell Inncom control systems and control guest entertainment solutions on platforms like Sonifi - that all happens via API. Given the widespread use of APIs in almost every industry one would think that hotels can easily connect software systems like business intelligence software, revenue management systems and staff task management software to any property management system - but in reality that’s far from the truth. Major property management system companies like Oracle Micros and Agilysys have literally hundreds of integration requests each month from software companies. Each of those integrations must be vetted for security and reliability which takes time and resources. Those same PMS companies have hundreds of feature requests from enterprise clients that are prioritized ahead of those integrations partners. Adding to the headache, when an integration breaks down (which they inevitably do) the PMS companies are generally held responsible for client support. Further, when one of those PMS companies updates a feature that impacts their APIs - they need each and every integration partner to make necessary adjustments to the connection. This integrations dilemma is a messy problem and London based Impala has come up with a simple and elegant solution - a universal hotel PMS API. Impala has built a universal API that both property management system providers and their software partners can build onto which saves the PMS companies time and money while allowing their partners to scale more quickly. Hoteliers benefit by being able to connect their systems and from the ability to try more technology products that optimize their businesses - often products that wouldn’t have already been connected to their property management system and therefore would have been unusable. Last year Impala raised $1.75M to serve more vendors and continue executing on its vision for a more innovative hospitality industry. We sat down with Impala co-founder Ben Stephenson to chat about the future of the hotel industry with a specific focus on how connected systems can turn the industry from a laggard into a technology pioneer. What was your background prior to starting Impala? Prior to starting Impala I was a Software Engineer working on a number of really interesting projects. One of the later projects that I worked on was managing a team responsible for delivering integration with GDS web-services. Impala initially came about as I met people when working in travel technology and started to understand how out-dated and ill-fitting the technology stack in travel was from almost every angle. I met my Co-Founder Charlie Cowley through a very old friend and since we have very complementary skill sets (myself in engineering, Charlie in sales) and Charlie being one of the few people that can put up with me for more than a few hours, we decided to start Impala. Who was your first customer? This is actually a really fantastic story. In the very, very early days before we really dug into building a secure integration platform, we were building a Property Management System. I was glued to a laptop for days on end building the thing (literally a never-ending job) and Charlie's job was to go out and drum up some pilots. We were based in London and the first guy that Charlie even managed to get on the phone is a chap called John who runs a 10 bedroom guest-house in West Wales. He somehow convinces him to take a look at the software - but it has to be in person. For anyone unfamiliar with the UK, West Wales might be one of the most painful places to get to from London. All you can really do is drive and if you catch the traffic on a bad day it can take about seven hours. Neither of us have a car because we're Londoners and so Charlie hops in some Zipcar and sets off to Wales. He gets there and gives me a call to say that he has no reception on his phone and he'll call me in an hour when he's done. Anyway, fast forward four hours and absolute radio silence. I try to call Charlie. Nothing. I try a few more times. Zip. At this point I'm pretty sure that Charlie has been lured across country to be murdered in a 10 bedroom dungeon and I'm trying to figure out how to call the Welsh police. Finally, I get a call from Charlie to say that he'd been grilled for the entire afternoon about a product he - to be honest - didn't really at the time completely understand but he'd somehow got them signed up. That’s incredible and I didn’t even realize Impala started as a PMS. You guys have come a long way since then - tell us about the business today. With every interface, you're currently paying your PMS an extraordinary amount for insecure, slow access for data *that you own*. Impala is an extremely secure, rapid data layer that sits on top of your PMS and lets you work with great software and hardware ten times faster and cheaper. Who is one mentor that has really helped you scale the business? There are so many people that have helped us get to where we are so I'm going to have to pick out two. Adriaan Coppens, the ex-CEO of OTA Insight has been exceptionally helpful. He's always one or two steps ahead of where my thinking is and it really pushes me to be better. I'm almost certain every time we've disagreed, he's ended up being correct eventually. Jens Lapinski, the CEO of Angel Invest Ventures as well has been massively influential. He's completely no-nonsense and happily contrarian. I once wrote Jens a wonderfully lengthy strategy email about where we should go that spanned about four pages of A4 and I just got a single line reply that dismantled my entire argument. What's the biggest mistake that you see hoteliers making on a day-to-day basis? Hoteliers think that getting access to your own data has to take months. One of the golden rules we have when we consider whether to work with PMS or whether to implement our secure reader is "Can this PMS switch on an interface in less than 24 hours". If the answer is no then we use the reader rather than web-services. Our goal is to get Impala switched on in a hotel inside 24 hours. What's the most surprising thing you've learned about scaling technology into hotels? How unique every hotel is. We work with hotels in California, Kazakhstan and the Caribbean and every single one has different needs, processes and requirements. Luckily these days Impala is a very flexible product but I do feel for anyone coming into this industry thinking every hotel is entirely homogeneous because it's a tough learning curve. Are there 1 or 2 companies that have been a particularly good partners for Impala? We work with so many companies that I can't possibly shout out all of the great partners that we have. I love companies that move quickly however, people like Triptease and Customer Alliance that have really big visions and executive teams that are willing to really push the boat out to achieve them. If you could partner with any vendor in hotel tech, who would it be and why? I'm really excited at the moment about a lot of the work we're doing with hardware vendors. The demands are very different, a lot smaller data footprint but very low latency requirements in how fast they need data. Other than that, we'll be launching the Impala Distribution API later on in the year which will allow us to work with some very innovative companies in the distribution space. Where do you see Impala in 5-years? If you look at most hotels, because of integrations and interface problems and the fact they have a very specific domain that mass market tools don't cater for, they're comparatively very light users of technology. I hope that with tools like Impala we can change that and that in five years, hotels are going to see healthier margins because of it. In five years Impala will be the default way that hoteliers manage and share their data with partners, whether that be distributors, software or hardware vendors or governments. Hoteliers will have super fine-grained control and auditing of exactly who has access to what data and how frequently. What's one piece of advice that you have for any entrepreneurs looking to get into the hotel tech space? Hire well. Technology is hard, hospitality is hard. We wouldn't be anywhere near where we are right now if Charlie and I didn't have a genuinely incredible team of hospitality professionals and technologists. It's so easy to hire badly and hotel tech is quite an unsexy space so you have to be very careful and do it very well. What is the best book you've read lately and why? The Fortune Cookie Principle by Bernadette Jiwa. Brand is so important to any business and it should inform absolutely everything you do. Jiwa demonstrates this through some great case studies. What is your favorite podcast Business - 20 Minute VC. Comedy - The Worst Idea of All Time. What is one thing that most people don't know about you? I'm a huge fan of cricket. Every few months I start to try and organise a charity cricket match for the hospitality industry. I just have to nail down Erik Muñoz on his availability this summer since he's the Australian Captain.
The hotel industry has moved into the era of soft brands unofficially started by Hilton through the DoubleTree brand. The initial idea was to find a way for the Hilton development team to help owners of subpar hotels (ones that didn't meet brand standards) plug into Hilton's distribution network and (and consequently for Hilton to earn franchise fees from a larger pool of the market). This evolution progressed as Marriott launched the Autograph Collection and eventually turned into an arms race with Starwood's Luxury Collection and acquisition of European based Design Hotels. The trend has allowed hotel brands to grow faster in a world where they are asset light (no longer own property). Soft brands make a ton of sense for development teams at major brands because when owners either don't want to conform to brand standards or want to remain localized and unique, major brands now have an attractive offering that their development teams can pitch. For owners, the value of joining a 'soft brand' ultimately comes from plugging into a global sales, marketing and distribution network. One of the key components of that lies in tapping into those brands' loyalty programs. For independents who want to truly stay that way there are some great options available; however, it's important to find the right fit for your hotel as there is no one size fits all like the brands. "Just because a loyalty program is "free to join" does NOT mean that it's free. Every booking that comes through your shiny new loyalty program comes at a cost and that cost can add up quickly if the program is cannibalizing direct bookings rather than driving incremental bookings for your property." Whichever provider you choose make sure that you are keeping a pulse on cost and are comparing that to OTAs. Then compare the total bookings to OTAs. If you are paying 7% on direct bookings to a program that isn't driving incremental guests to your property you may be better off with a 12% OTA commission so it's important to think strategically and analytically about your decision. "Ask yourself: is this loyalty program actually going to drive loyalty or is it just a mechanism to incentivize direct bookings on my website?" As with any technology decision, independents should think about their business mix and objectives before signing on with an independent loyalty program. Signing with the wrong loyalty program can end up being a huge time suck without material gains and sometimes even hurt your business if they are eating away at your direct bookings but not providing new ones. San Francisco's Hotel Abri (pictured) is part of the Stash Rewards program There are 2 main ways that an independent loyalty program can bring value to your property: 1. Increase conversion rate on your website 2. Drive new bookings through their online portal When deciding which independent hotel loyalty program to join consider the following: 1. Unit economics and breakeven analysis: Assuming the loyalty program shifts various levels of your direct bookings onto the program - how much profit would your hotel lose per month? How much would the program have to increase your website conversion rate at each level to help you regain that profitability? 2. Is their network actually valuable? How much volume does the program drive to hotels like yours? Ask for a reference hotel in your market segment and see whether the program is actually delivering the business they tell you that they can. How much web traffic does their booking portal have? A huge network isn't much use to you as a hotelier if they don't have lots of travelers booking on their portal. Ultimately a great loyalty program will drive a material amount of new business so if they don't have traffic on their branded OTA style website - ask them why that is. Also ask about their geographic focus. E.g. If you have a large mix of Asian business travelers and they don't have properties in that market, you'll want to think about whether joining is going to move the needle for your business. Ultimately we urge hoteliers to recognize that you are not just comparing loyalty programs here. Most programs don't bring a material amount of incremental travelers to your property since the networks are still in their nascent phases. This means that the majority of the value is in driving direct bookings. If a loyalty program is charging you 10% on each booking that capitalizes on the program and you get $3,000 worth of bookings in a month via redemptions you have just "paid" $300 to be a part of that program. If you are in the 10% range for fees and getting $3,000 or more in bookings - you might want to consider spending that ~$300/month on a direct booking platform like Triptease or Stay Wanderful that won't charge commissions. Here are the top loyalty programs for independent hotels... iPrefer (by Preferred Hotels & Resorts) iPrefer taps into a network of more than 650 independent properties around the world separated into different collections. They consider themselves the world's "largest independent hotel brand" and given the movement although we at Hotel Tech Report don't really consider Preferred a brand. Points can be redeemed at starting at $1,250 for a $25 gift certificate to a participating property in the network. iPrefer's web portal has about 3x the traffic of the #2 provider on this list so they are the most likely to drive incremental bookings for your property. Another unique facet of iPrefer is the network and the fact that you can achieve Elite Status within the program just like at major programs like SPG. Elite members receive benefits such as 10% bonus points, complimentary Wi-Fi, early check-in and welcome amenity packages. The exchange ratio is around 2% meaning that for every $100 guests will get $2 back. Preferred also has official partnerships in the airline space offering decent bonuses (2x) with participating airlines such as American, Alaska, British Airways, United and Air France/KLM. Read iPrefer reviews from verified clients GuestBook Rewards GuestBook Rewards is the fastest growing program in the space offering the easiest and has the simplest offer around - 5% cash back. Guest can then choose to redeem points at a participating hotel for 10% "trip cash". The GuestBook has quickly grown to 600 hotels within just a few years having launched later than Stash Rewards and likely due to the fact that guests often want cash back, especially leading up to the point where the network provides real value. Our guess is that GuestBook's network isn't quite large enough to attract many new guests to your property but is getting close and has the best chances of getting there due to the instant value they provide to bookers. The Company also launched a partnership to integrate directly with TravelClick's iHotelier Booking Engine which will likely help grow their network over the next couple of years. The GuestBook also has the #2 online portal by our web traffic estimates (#1 is iPrefer) meaning that they are the likely to drive some amount incremental bookings to the most popular hotels in the ecosystem. Read Guestbook Rewards reviews from verified clients Catalonia Rewards (by Wanup) European based Catalonia Rewards is one of the newest to the market but is also growing rapidly and has signed on more than 400 hotels since it launched in September of 2016. Similar to The GuestBook Wanup offers cash back between 3-6% depending on the tier of the member. The program also offers F&B discounts which are usually a smaller/more profitable offer than straight cash back and perceived as higher value in the mind of the guest. If you have frequent visits from European travelers Catalonia Rewards may be preferable to The GuestBook but if you have a global traveler base you're probably better off with using The GuestBook or iPrefer as they offer more reach in the network. Read Catalonia Rewards Reviews from verified clients Stash Rewards Stash Rewards has over 200 hotels in their portfolio and is very U.S. focused. Guests receive 5 points per dollar and a point is worth ~$0.01 per dollar according to our sources which is not bad. The install base hasn't grown much in recent years so it's worth asking why that is before joining on with the program. Make sure to ask the questions in the article above before signing on and read verified Stash reviews from hoteliers like you who use the program. Stash Rewards sponsored a very interesting research study at Cornell's hospitality school in 2014 showing that loyalty programs can help increase room nights with frequent travellers and while the dynamics of direct bookings and consumer preferences have changed quite a bit in the last 4-5 years the study provides a good foundation for how to think about whether a loyalty program will meet your hotel's goals. Read Stash Rewards reviews from verified clients Voila Hotel Rewards Voila Rewards features over 100 independent hotels around the world and while it has a U.S. presence is much more focused on Asia and Europe. This program offers a tiered system like iPrefer. Guests may choose to exchange points for airline miles but not at an economical rate so it's more just a vanity option. With Voila there is a 2x points bonus when members reach Platinum status (20 nights in 12-months) so this program is great for hotels who have frequent business travelers but due to the small network might not be as attractive for destination properties with a high leisure mix. Read Voila Hotel Rewards reviews from verified clients InnDependent InnCentives (by IBC Technologies) IBC's loyalty program for independent hotels helps owners increase direct bookings to their properties by allowing guests to choose from hotel credits, airline miles, eGift cards, merchandise, charities and more. By offering alternative redemptions this network is valuable despite having a smaller user base than some of the others on this list. We think that the options for guests are attractive; however it might not offer the best value for redemptions given that they are purchased from 3rd party providers. The company also doesn't offer a separate booking portal like some of the others on this list which means they don't offer the reach that some of the other programs do. Read IBC Inncentives reviews from verified clients
During my second week on the global partnerships team at Starwood Hotels & Resorts, the firm laid off a significant portion of the corporate office as it prepared for a sale. Adam Aron (interim CEO at the time) called all corporate employees to a town hall behind it's Stamford Connecticut headquarters to allay concerns about future layoffs and set a clear message about the changes happening at Starwood. One of the most critical messages from this meeting was the idea that "we are not a technology company". In the years leading up to this event, Starwood had spent hundreds of millions of dollars on proprietary technology such as SPG Keyless and Aron wanted to reduce that spend by finding strategic partners who would take on the R&D risk, innovate faster and add expertise without being on Starwood's payroll. In the age of digital transformation one of the key decisions that managers must weigh is whether to buy or build technology. When big brands choose to build proprietary tech in house it often comes at the cost of sub-par products, hemorrhaging cash and stifled innovation. As former head of global strategy for industry powerhouse InterContinental Hotels Group, Triptease's Alexandra Zubko is no stranger to this paradigm. Now a co-founder of one of the industry's fastest growing tech upstarts, Zubko has an undeniably unique perspective on the market. We sat down with Zubko to get her take on build vs. buy, why vendors misunderstand hoteliers, her favorite hotel in the world and more. Tell us about your career in hotels Prior to Triptease, I was the Head of Global Strategy for IHG, responsible for strategy across all brands, verticals and regions. I had started in the EMEA region and was thrilled about working across markets near and far. I was originally attracted to hotels after having spent 10 years outside of them in finance, television and consulting. The global role piqued my interest as I'd lived as a little girl in Korea, Venezuela and Brazil. As a continuous learner, the industry was constantly challenging me. Delivering a global brand through diverse cultures and people is constantly inches beyond grasp. We weren't particularly tech-savvy in the strategy team. We worked in data and analysis, not systems and processes. With that in mind, on any given day, you'd find me in Think-Cell. 10 years later, that'd probably be Tableau or Looker. Since my first job as an investment banker, I've always been fascinated with telling stories through numbers and data. At its heart, Triptease is a data and analytics company. These insights recommend digital marketing strategies to hotels to drive profitable, incremental revenue. When did you first become interested in leveraging technology to become a better hotelier? Honestly, I didn't. My obsession with new technology happened outside of, and in spite of, being a hotelier. It was a side obsession which began with teaching myself to code in the 90s, continued when I started a travel tech business in the mid 90s and then persisted through reading blogs and articles while at IHG. As a hotelier what was your biggest frustration with technology vendors? I couldn't stand the pitches from vendors who didn't understand my role or my business; the pitch was really all about them/their business and didn't understand my business challenges. Hoteliers are skeptical about adopting new technology, quite rightly. The onus is on the vendors, on the tech startups, on the entrepreneurs to reduce the friction and showcase the benefit as quickly as possible. We're lucky at Triptease because the benefits are obvious from day 1. We've reduced our integration to one day for hotels operating on one of our preferred partners. Because the skepticism exists and because tech can take long, hoteliers reach the wrong conclusion. They decide to build instead of buy. I have witnessed a transformation in travel tech. Increasingly, hotels are embracing the rules of comparative advantage and are embracing tech where they can move fast, learn fast and benefit quickly. Tell us about your journey from working at IHG in strategy to now running the Triptease business? I met Charlie Osmond when I was at IHG. I was moving back from London to New York and we connected. It was clear that the team (him and Alasdair Snow) wanted to solve big and challenging problems. It took about 6 months from the moment we first met to my first day in our London office. I had no idea what a whirlwind the experience would be, how much I would learn, how fast we would move and how much of an impact we would make for our hotelier clients. I had always worked for big brands, established companies with well-known reputations. What was it going to be like to risk everything I'd worked for? Risk wasn't something we had a lot of appetite for at IHG as a large, publicly-traded company. On top of that, I had two children under 5 and was pregnant with a third! It's not exactly the prime time in one's life that Steve Jobs, Jeff Bezos and many others would recommend starting a company! Give us the Triptease elevator pitch Hotels use Triptease's data and analytics to optimize their presence and compete successfully in the digital space. Through a joined-up platform across a hotels' tech stack, Triptease knows who your guests are, who is likely to book and delivers a personalized online guest experience on the hotel website and booking engine. Imagine that you're going to open the hotel of your dreams tomorrow. What kind of hotel would it be and what tech would you leverage? Consumers are conscious of the choices they make and the impact on communities, sustainability and, increasingly, their own brand and values. I'd build a hotel that has a positive impact on poorer communities in distant destinations. A hotel like Nihi on the island of Sumba in Indonesia is the best representation of this ambition. The hotel combines economic impact, training of indigenous people, ultra luxury and a sublime guest experience. Starting with the user in mind, I'd leverage the following technologies for my property: 1) Triptease direct booking platform 2) Mews Systems Property Management System to deliver the best guest experience 3) SiteMinder Channel Manager to maximize 3rd party channel performance 4) ALICE Hotel Operations Software to facilitate day to day operations What's one piece of advice you have for hoteliers who have dreams of working in technology one day? Be confident you've learned enough. Be willing to take the leap and disregard titles and job roles. Join a company destined to solve big problems quickly with a set of people and values that inspire you. Put your hand up for anything and everything and suggest solutions. What's one podcast, newsletter or book that you recommend hoteliers read if they'd like to eventually move into tech? I'd recommend "Masters of Scale with Reid Hoffman". It's a great way to learn what it's like to be a founder and what land mines to avoid. What is your favorite hotel in the world? Nihi Sumba in Indonesia which was voted #1 hotel in the world by Travel + Leisure What is the most exciting technology you've seen in the hotel tech space that is not built by your own company? Tableau. Data visualization that unleashes data locked away deep in an on-premise PMS What is one thing that most people don't know about you? I obsess about learning and development - for my team, my company and my clients. Here are some examples of how we've brought this idea into the Triptease culture: 1. Radical Candor approach to developing people. We strive to provide continuous feedback. After every meeting or interaction. It’s a human need to know where you stand and how you’re doing. Annual performance feedback and reviews are antiquated in today’s world of immediate likes on social media, for example. 2. Development framework. So everyone knows where they stand at their level across 6 competencies. They know what they need to demonstrate to move to the next level. 3. Engineers do pairing so they’re constantly learning from one another as they code 4. We have firesides and sharing lunches where we learn from one another and the volunteer gets public speaking practice. Topics range from digital marketing to color blindness to ballroom dancing 5. Each employee has an annual obsessive learning budget so they can invest in themselves 6. In person offsites and training courses during the year
[PODCAST] Triptease Founder Charlie Osmond Tells All: How his tech startup got into 12k hotels, raised $20M in venture funding and beat a $65B company
Download Hotel Tech Report's 2019 Direct Booking Platform Buyers Guide Here's the unedited interview transcript: Jordan: Could you start by telling us a little about your journey into the world of hotel tech? Charlie: Hi, so yes, straight out of University started my first business and I did that then for another think 10 or 12 years. And so I was coming to the end of that and feeling thinking about what what is it? I want to do next which industry but I like to be in for the next decade and I guess that's worth pointing out. So I think a lot of people don't always. Realize how long it takes from startup to successful business, but in my mind definitely it's worth thinking about Decades of your career if you're doing a start-up so as all when I showed the place I'd really like to spend time is online travel. And the reason for that was that. It was the biggest Market on the internet, right? It's a huge market and I think as an entrepreneur you need to go after big markets if you want to create a large business and also because when I thought about my life and the thing the single thing that upset me most throughout the year the single biggest pain and frustration. It was always when I was booking our family holiday. I can never quite understand how you know one week holiday would take me seemingly 3 or 4 weekend's worth of effort in looking at assessing choosing then getting input from My Wife and before eventually booking the damn thing and it hurt me so much that experience that I just thought. How can it be that this this massive Market online is still so painful to navigate their just have to be opportunities here, too. To make a difference. So yeah, that was really that's what kick me off. I think that's something that really a lot of people can relate to it's incredible that with all the tools out there today. We're still not able to book travel seamlessly it could you give us the elevator pitch for tripped. He's tripped. He's today is a technology company that is focused on helping hotels Drive direct bookings and improve the guest experience on the website. So really everything we do is about optimizing. The current website the current booking engine hotel has and making it a better guest experience and increasing bookings a result. J: Yeah. I've seen the product and I'm a huge fan of what you guys are doing and it's incredible the impact you've been able to have on your hotel customers with such a simple and scalable product. I think one of the really interesting parts of your business is that you've created a really fun and engaging brand for something that's somewhat of a niche and Technical product. Could you tell us a little bit about what the Triptease brand means to you and how that's played into your success. C: It's a really really want so it's funny because we started the business as a sort of consumer-facing brand and Triptease was actually trying to get across. The way in which people could share their great travel experiences and tease others about their trips. So as a there was a very good reason for why the name is as it is and also the other reason why the name is striptease is because it's a little playful and I wanted something that would stick in people's minds the when we shifted to becoming focus on really the brand is targeting hoteliers and hoteliers are our customers. We did a one of our investors was actually quite Keen that we change the brand. But we stuck with it and I think the reason is because it is seen as playful and yeah, maybe maybe 1% of people really hated or really dislike it but I think it's far better that brand drives and motion. And if that means there's something don't like it, but others really do love it then then I'm all for it. I. I've there's a there's a great investor great VC in Silicon Valley who runs a firm called 500 startups and I think it's advice on branding is do crazy stuff because you're startups probably going to fail anyway, and I guess we see our name is just one little bit of a little bit fun we can have. J: Yeah, that's a great point. And I think a lot of times with the ups and downs of the startup roller coaster. It can be difficult to have fun. So it's great that you guys were able to find a way to bring that into your day-to-day speaking of those kind of that early period and that roller coaster in those pivots. Can you talk a little bit about your first 18 months and what that felt like? C: Yeah, I mean it was a it was a horrendous time our first 18 months horrendous, but also fabulous it was. To extreme emotions and the thing that surprised me the most was how many different times in one day it was possible to oscillate between disaster and success as excitement and misery and really that was it I would say is 18 months of a roller coaster ride, where one day you might think. Oh, we had this great new idea for a distribution or we've had this great result where we got someone who really is excited about what we're doing. And then later that same day or later that week something disastrous would happen and what you expected or he thaws already believed it turned out wasn't true or you found another competitor that was doing something or a tried the same thing and had failed which was actually worse than a competitive doing well in many ways. So yeah, it was just it was a roller coaster and then at the same time as the business, I guess fortunes and potential going up and down. You also would have the the finances of the company. So I mean from a personal point of view. We had to sell our house. We had to move the company into our basement in a place. We rented to save money on rent which meant my wife and kids coming back into the coming home in the afternoons and finding, you know computers and people strewn across the house doing their work. So there was some definitely stressful moments, but at the same time all of that stress was. So rewarding and so much fun and it's a great feeling when you're literally building a business on your dining room table. It's it just feels I guess it imbues the company with a special culture and having gone through some of those hardships together the core team who was there at the beginning I think, you know when we're connected for life really and so it was hard but it was also really rewarding that's really an incredible story and such an example. I bought a sad for entrepreneurs going through some of the trials and tribulations at this stage. J: I want to start talking a little bit more about some of those tribulations that you had in 2015 you woke up one day to a letter from booking.com alleging that you had been unlawfully using their data. Can you tell me what that felt? Like I can only imagine how I would feel in that situation. C: Yeah, well, I've described we went through a few ups and downs before we ever got there. So I guess the roller coaster of emotions. I was quite used to it was it was not a great day. I have to admit when a I think at the time 64 billion dollar business tells you that they want to take you out of business and they write to all your customers and tell you that they're going to sue you and sue your customers and so it was quite quite worrying but the same time I'm an eternal optimist and I look at every. Challenge as an opportunity and immediately. I was thinking this is good. We've been we've been starting to see other companies try to copy us this this threat is also going to be an issue for them. And when we resolve how to get through this it's going to be hard for the next people trying to follow us. So, you know every hurdle is an obstacle for your future copycat competitors, right? So so so there were worries and there were concerns but the same time it was like, okay, how can we turn this to our advantage? And we spent a fair bit of time. I got to say talking to lawyers that was important. And and we also you know, it's all about as you should always do in every situation. What are the. What are the opportunities you've got in Your Arsenal that you can kind of use and I guess in one sense the pr was one side of that. Actually, we would just kind of deciding about how do we talk about this and then somebody else leak? The letter leaked a letter to one of the hotels to the Press so it kind of Hit the Press before we had quite decided how we're going to respond. And then once it is done that we just thought well then which case we have to be we've got to be talking about this. It's it can be slightly harder as a large company in a dispute to give a clear opinion to every question from a journalist. But as a small company that one advantage we've got is. I'm making decisions and I can you know immediately give my opinion without having to confer with lots of other stakeholders internally. So we kind of felt this is this has got to be our opportunity. Then the issue has blown up in the Press. Let's make sure that we're open and available to talk about our Viewpoint, right? J: Yeah. I think I can completely understand booking trying to protect their lunch. But at the same time, I think it's. Such a testament to what you guys have done the really kind of Judo philosophy of using the weight of your opponent against them obviously really played out in your favor speaking of booking.com. I have seen a lot of OTAs moving into the service business and even heard an Expedia executive talk about seeing himself as a service business rather than a distribution play. You kind of see the investment into Alice from Expedia and. And Priceline into Boutique and hotel ninjas. Can you talk a little bit about what you're seeing in terms of OTAs moving into the direct booking space and services. C: Yeah, I think it's fascinating seeing the OTAs get more into dark bookings. I think that there were some important strategic Investments for The O'Jays to make because it's one way if for example consumer opinion or whatever was to shift dramatically towards booking directly. Then that could be a real challenge to Oda. So it's important that they sort of spread their bets and they get involved. I think also actually it's just it's a really smart move on the oth pause again so much of the value that's duty is to bring it to Market is tied up in their ability to analyze data on behavior. And so with Priceline owning booking sweets and therefore managing and running thousands of Hotel website. Again, that's just that's just more information more data that they're able to use. So I think they just they see it as a Naturals of extension of what they're doing. I think there is a there's again there's a definite risk, right the risk is that if you're a small hotelier and you got there for very very little power in the big scale of things and your website and your booking engine is. Provided to you by one of the OTAs and your central reservation system is provided to you by one of the OTAs their ability to then for example, get you to only display availability or to make sure they display more availability or always have laws from availability on their site goes up right there the power Dynamic shift even further in their favor. There are plenty of hotels all say. Booking.com is just one of the best run websites on the internet if those guys it also going to build my website and I'll be a fool to let anyone else do it because probably it will convert at a higher rate. I don't know that that's right, but that's certainly the other side of the aisle. Right. That's what anything there are trade-offs on both sides and really just kind of choosing what risk you're willing to accept as a hotelier is the main point here when you look at at the OTAs and Priceline Expedia, specifically you just see massive massive Market. But at the same time J: David Temple who is a member of Hotel Tech Insider and the founder of Hello Scout kind of points out that VC and the industry is really difficult. The industry doesn't have high enough margins to support a strong SAS business. What's your take on that? One of the things that the OTAs have done without question why particularly compare Car Hire or you can pair Airline fees the commission's that the OTAs are managing to command from hotels. All incredibly high and that's you know, that's why the margin the OTAs are getting is massive. So the idea that there isn't there isn't a big enough market if you're shifting people's direct. It's just it's just not an issue right price line is one of the biggest markets one of the biggest biggest biggest digital businesses globally full stop. And there they are that size and they'll that scale because of the margins that they have the commission's are charging. Right? So it makes sense that it really depends on where you play into the value chain and which part of the p&l you're going after with your product or service and where you want to move the needle whether it's increasing revenue or decreasing costs and really looking at that on a more granular level. I wanted to switch gears a little bit. And go to a question from euclides major who is the founder and CEO of guests. J: Our listener named Euclides Major who's the founder of Uguest is really curious about what your day-to-day looks like. I know since you've hired your brother your leadership philosophy is changed. Can you talk about kind of what you were doing as the business started and how that's changed today? C: I think I might have hesitated to talk about hiring my brother in the past. But actually it was one of the best things I ever did. So I'm quite proud of it and my brother who'd been running a another business very successfully, but she sold before this one. He had a very clear I guess view that what the business needed. Now as we were going through a new stage of growth was to hire a senior management team and that really all the decisions were going to be made by the senior management team not by me the chief tease. And he was pretty adamant about this and that was that really did lead to a shift of yeah hiring a more experience more Senior Team internally and. Me moving from try to be involved in every decision to not being able to be involved in, you know, even 5% of them because it's just so much going on now the team's expanded and I'm overseas when you see other people in the business going ahead and making decisions that I guess you wouldn't have and then you see that they were right and they were successful and great decisions. Then you think okay. This is so much better. The company is so much better for it. But I think now the answering the question of what I do day today, I'm often diving in and it's deciding. So the specific projects or specific things that are going on today or specific customers who needed help where it's appropriate and it's right for me to really dive in because. Yeah, now I think about my role as being what are the things that uniquely I can do and what are things I can do uniquely as the chief T's is I can shine a light very brightly on specific issues that I think exists within the company or that may exist. That's a great point. And I know Steve Jobs used to say that you hire smart people to do smart things and it seems like that's really working for you at striptease. And I know in the past we've talked about shining that Spotlight on company culture and. J: Estella Hale, who's the VP of product at SHR and also a Hotel Tech Insider wanted to know how you've been able to maintain the company culture as you've had such rapid growth when I think about small businesses and you know, our goal is to hire amazing people and keep them motivated and excited and within the business the there are so many things that big companies can do you know that we can't for example, we don't fly people in anything other than economy. C: And so I always think well, what are the things we can do? No business is harder for a big company and one of the things that we can be complete transparency because and also we're going to a great journey as a start-up we've been growing quite quickly. And so we kind of feel it's our duty to educate everyone on his everything. We're learning about how to grow a fast-moving business and hopefully those are things that will inspire them all to start their own companies in the future. Ray and that's definitely something that I think is lacking in a lot of corporate culture today. It's kind of hitting the top piece of Maslow's hierarchy and that self-actualization and really empowering employees and making them feel valued. So I think that's an incredible retention tool and a great way to really build that corporate culture. The next question comes from Shawn Carter Shawn is the director of operations at Bisley very successful New York based startup that helps. Hotels and other businesses rent out and meeting space via their online platform. So coming from a little bit outside of the industry Sean was curious as to how you tackled some of the scaling issues because as he points out hotels can be slow to adopt new technology and not wrongfully so it's more because new technology can disrupt existing processes. J: So what do you think was the key for you to drive such rapid adoption? C: Maybe some of the the smallest attract we've done to try and identify early adopters is actually look at the technology that you've got. So there are. It also tells on lots of different booking engines. For example, we believe there are some but they're a bit more that are a bit more sort of up-to-date and therefore we look for hotels with those booking engines because we know that if hotels working with this with this bit of software then that hotelier is probably a bit smarter about their business and they're more prepared to try new things. And so you can look for indicators like that that suggests that this is a dynamic organization that wants to try things first. Yeah. Sure. J: I think Charlie brings up a really. Interesting perspective here and that you might not want to think about your Target customer as a specific type of hotel by their rooms or their chain scale, but even going deeper than that and understanding the kind of Behavioral traits of the actual buyers and adopters of your product could be an interesting angle to. And so Charlie the last question before we head into the speed round comes from Erlanger Johnson, who is the CTO of Tour Desk? And he really wants to understand what your most effective Channel or tactic has been to scale your business today. C: It was always the most effective tool in my last business. I think the SaaS industry in general is one that has grown very quickly through inside sales. So that's people sitting inside the company as it were not not leaving their desks and phoning up prospects. That's been that's been our number one. J: What is the worst piece of advice you've received since founding Triptease? C: He's so I said, we would we built the digital post called products. We'd managed to get the investors to back us and give us a million pounds and a month later. We went back to my said thanks for the money. We've just decided we think that there's actually much better product called price check that we want to do and they versus said the rest said look we've just given you a million pounds, please use it to work on digital postcards because that's what we agreed. And so they said carry on with what we're doing and a month later. I went back and said I ignored you and we're going to build price check instead. It's going to be a lot better. It's incredible. I am sure that they're thankful. You did not regard their advice today. J: If you could form a partnership with any travel company, who would it be and why? C: Well, you just got to think big right so I mean Google is the is probably the single organization. That was most hotels Google analytics. I think is really fascinating because it's probably the one bit of code that's on more hotel websites than any other and yet I feel that at the moment because it's generic tool hotels get very little often get little value from it because I don't set it up properly. So I'd love to find a way to work with. J: And last one here Charlie, who is the single most interesting person you've met in this industry C: Steve Rubin at Dennihan. He is every time I meet him I learned a whole bunch of new things and I often have to get in to repeat them a couple of times because I'm not as fast enough to keep up with his brain.
In the 1920s DuPont and General Electric began to develop diversified organizations with business units that lacked cohesion. They were pioneers of what later became known as “conglomerate strategy”. These companies (and the many that followed) drew on modern portfolio theory to build businesses that could weather any economic climate. If one business unit was in a trough, the other could pick up the slack -- or so they thought. During the 1980s this theory crumbled destroying billions in enterprise value. The problem that unraveled the conglomerate craze was simple: diversification creates strong investment portfolios, but weak products and confused organizations. Creating great products takes a maniacal focus on singular problems. It takes rallying a team who’s passionate enough to work on those problems every day. Each milestone is just one step closer to proverbial perfection. Yet it's incredibly more challenging to deliver in today's fragmented and competitive landscape. One has only to look at recent restructurings to see that there's more twists and turns to come in travel and hotel technology. Today's hotel technology industry map is near impossible to follow Thirty years ago there were two main technologies that powered hotels: GDS and property management systems. Today, the ecosystem has sprung thousands of niche players delivering innovative products with incredible ROIs. Direct booking tools like Triptease, guest messaging platforms like Kipsu, revenue management software (e.g. Duetto), digital marketing platforms (e.g. Travel Tripper), email CRM (e.g. Guestfolio), website optimizers (e.g. Hotelchamp), reputation managers (e.g. Revinate), the list goes on and on. As incumbents watched these players grow they adopted conglomerate strategies but for them it was less about diversification, it was about buying and developing products to increase spend amongst their existing customers. GDS companies bought up sales management software businesses, developed property management products, central reservations systems, booking engines and more. In some cases, the core products produced by these conglomerates are great but even for them not all of their products are great - they can’t be. Don’t believe me? How often do you login to Google’s social network? Would you use Apple’s spreadsheet tool just because you have a Mac? Sure, it’s easy and pre-installed - but if your business relies on spreadsheet wizardry you’re going to need Microsoft Excel. So why would you use a property management system just because it’s provided by the same supplier as your booking engine? In pursuit of the perfect tech stack Challenges like customer education, industry structure, and fragmentation have forced even small companies to merge as evidenced by Porter & Sail’s 2016 acquisition of Guest Driven and Go Concierge buying Gold Keys in 2012. This has made it incredibly difficult for hoteliers to understand hotel technology let alone find and adopt the right solutions for their properties. Take channel managers. There are over 150 in the market and many suppliers also advertise other products like website development, apps, pricing tools, market intelligence, booking engines, etc. Choosing the wrong channel manager can be insanely costly - down time means that your rooms aren't being sold on 3rd parties, parity bugs cause you to lose high margin direct business, this is mission critical software. Go to each of those 150 supplier websites and you’ll find raving testimonials alongside claims of market leadership. The question becomes: how can hoteliers find the best solution for every business need and build a tech stack that drives efficiency, profits and guest satisfaction? It’s no secret that hospitality is currently facing unprecedented pressures from OTA commissions and home-share platforms that continue to disrupt the industry. If the industry is to survive and thrive, tech stacks need to rationalize and evolve faster than ever before. The hotel industry is at a critical inflection point. Today’s zeitgeist is plagued by disruption yet enabled by the same technologies that threaten the very existence of traditional hotels. SaaS business models have lowered switching costs and accelerated innovation. By embracing this wave of technology the industry can thrive like never before. The first step towards modernizing our industry is isolating the signal from the noise, consolidating data and eliminating information asymmetries. Collecting the knowledge of hoteliers in one place is essential to realize this vision of a modern hotel industry. We are aligned towards an improved world with happy guests, fulfilled hotel staff, and satisfied investors.
It’s a commonly held (and true) belief that most travel startups fail. On the consumer side, it’s easy to see why. High acquisition costs, a crowded market and for the users who do engage with a product they rarely spend enough time to monetize because after all – they only use these products when they travel. The reason for high failure rates in B2B travel startups is completely different and I’ll examine arguably one of the most successful hotel tech startups in the last decade to demonstrate why. Today, Triptease (yeah, awesome name) is in 12,000 hotels and claims to have saved them more than $150M – but the business they’re in now is completely different than the one they founded in 2012. Prior to starting Triptease, Charlie Osmond started several ad agencies and even won Esquire’s prestigious entrepreneur of the year award. Charlie teamed up with product guru Alasdair Snow and most recently Alexandra Zubko – formerly head of strategy at Intercontinental. Alexandra joined in 2014 presumably when she saw Triptease really start to hit their stride and help take it to the next level with her connections and industry experience. The company has won numerous awards from Phocuswright and other industry organizations, so if you haven’t heard of them it might be time to get outside and smell the roses. Prior to Alexandra’s participation, Triptease began as Triptease Magazine with the ambition to disrupt TripAdvisor. I watched an old pitch of Charlie’s and it was actually a really cool product. I mean who wouldn’t agree that Trip Advisor has awful design? Unfortunately, beautiful design wasn’t enough so they pivoted to social referral postcards that helped hotels spread word of mouth and disseminate content across social media networks. Then, 2 years later, they found their sweet spot in a kernel of wisdom that took years to develop. The epiphany? It turns out consumers believe that prices are cheaper on OTAs (e.g. Expedia) vs. hotel websites. So simple and so obvious, but this is the hard work of starting up – seeking out simple truths that no one has exploited to make a better world. So Charlie and Alasdair thought that if only they could find a way to change that perception, they could theoretically shift guest spend onto hotel websites and save up to hundreds of thousands of dollars for even relatively small hotel properties. The price checker widget was born. Simple and scalable is a dangerous combination. Dangerous enough that Booking.com threatened a lawsuit to shut them down in 2015. That’s when you know you’re really onto something. And how could you not love a guy with the title Chief Tease telling the soulless corporate behemoth Priceline to stick it up their you know whats? Then in February of 2015, Notion Capital and Episode 1 poured $7M into Triptease’s Series A as a vote of confidence (and just this morning announced their $9M series B for Asian expansion, congrats to the team). Despite the Series A equity raise, the company followed on with another $1.2M of debt financing just 2 months later (according to Crunchbase). But why raise $9M ($18M as of today) for a price checker widget? Well, that’s a great question. Triptease Go-to-Market Selling SaaS into hotels is really, really, really hard. Did I mention that it’s really hard? Triptease generally charges somewhere in the range of a $200/hotel monthly subscription with varied pricing based on number of rooms. I’m going to make significant assumptions based on external data and posit in no way that these are internal Triptease numbers. I’m using public information as a “best guess” case study to help further the understanding of what it takes to deploy technology into hotels at scale unless you’re an evil corporation (yeah, that’s you Oracle…don’t look so surprised). Okay, so let’s assume the average lifetime of a customer is 21 months (although it’s really still too early to tell). So we’ve got $200/month x 21 months = $4,200 (we need to discount this to present value but I won’t for simplicity). So what does it take to get each new customer on board? Well we have several key tactics we can employ to acquire new hotels: 1) Drive web traffic via search, press and advertising 2) Build a sales force 3) Attend conferences 4) Join industry groups Search is a weak option for companies like Triptease So right about now you’re probably thinking “hey Jordan we’ve got that thing called 'The Internet', it’s easy to get traffic to our website so customers can convert.” So how many people are actually searching for Triptease each month? Less than 1,000 worldwide! That’s including the drunk people who just misspelled “striptease.” Ok, but how many people search for terms like “price checker widget” or "price comparison widget"? It turns out even less. According to data from Similar Web and SEM Rush, Triptease.com had approximately 38,000 visits in February (12k uniques) breaking down to about 70% direct 30% search. 75% of search came from the UK so we’re only looking at ~22% of traffic coming to the site from search outside of their domestic market. Ironically almost all of that search traffic went to a blog post titled “Bad day for hotels - Amoma announces Google partnership” with people searching for “amoma” and “amoma reviews.” In other words, the small number of people who came to triptease.com from search presumably weren’t even in the market for this product (or had authority to sign a deal). Those blog posts average 700-1,000 words so with a high quality copywriter that could run $200/week if they weren’t written in house. Webinars are far more expensive and time consuming but can often yield stronger results in absolute terms. This isn’t to take anything away from Triptease. These guys have an insanely beautiful site that is helpful, well indexed and fast loading. The problem isn’t Triptease, it’s just a tough market. It’s pretty damn easy to find people searching for “red shoes” or even “mermaid blankets” online but niche B2B products tend to be much trickier and require finesse. This leads nicely into the finale: so if no one is looking for you, what do you do? Simple, you do everything. Build a Sales Force You start by hiring a sales team. According to the most recent LinkedIn data, Triptease has 81 employees of which 25 are in sales and 7 are marketers. If we assume 80% are sales reps getting paid $50,000 average salary and 20% are senior managers at $125,000 average salary we’ve got (20 x $50k) + (5 x 125k) or $1.6M in salaries for the sales team alone. Let’s budget 7 marketers at $70,000 average salary and we’ve got $2.1M in sales and marketing salaries expenses. I’d venture to say these numbers might even be conservative. Starting to see why they might have wanted to add $1.2M as a follow on to the Series A? Triptease is by no means alone, when I ran the data on 50-75 top hotel tech providers I saw companies with up to 45% of their team comprised of sales and most hovering in the 20-30% range. There aren't effective advertising options either This is my personal favorite. So if companies like Triptease want to reach hoteliers with display ads, where do they go? Maybe they want to advertise on HotelBusiness.com with 65,000 visits (only 2x their own site) for $2,000-$5,000/month. They’re given no performance metrics or click guarantees (proof below) – this is some old school stuff here. Even worse they can advertise on the Nevistas network (runs hotelnewsresource pictured below - ads are outlined in red). Nevistas’ mystery is only exceeded by its sketchiness. It’s a secretive company based out of Mexico that makes companies pay to launch press releases – so it’s no wonder the entire site is filled with press releases, advertisements and click bait like “7 Ways to Make Your Hotel More Awesome Than AirBnB.”So let’s say they concede - they buy 5 spots on these various sites for an average of $2,000/month. They’re looking at $120,000 in advertising expenses on extremely inefficient channels. Conferences There’s ITB Berlin, HITEC, Phocuswright, Skift Global Forum, HT-Next…the list goes on and on and on. Let’s say we want to attend 5 conferences and send 3 presenters to each. These can range from $3,500/ticket at the cheap seats to $25,000+ for a booth (before materials and setup). Add in a $600 budget for each teammate and assume $7,500 per conference - and each event costs more than $10,000 (plus the opportunity cost of having those employees working on other things). Triptease even went on to create their own successful company branded conference, The Direct Booking Summit, which presumably they could breakeven on via ticket sales and sponsorships. This is also likely more about retention than acquisition with an attendee base of existing customers. Industry Groups Industry groups provide another legitimate channel to exploit – there’s HTNG, HFTP, HSMAI, HEDNA – pretty much any acronym you can think of, there’s a hotel association for it. HTNG (Hotel Technology Next Generation) runs $8,250 for a supplier like Triptease and the benefits include: discounted event tickets, “overall greater exposure through logo placement on website” (web traffic = 11,000 pages visited and 90% are hotel tech vendors) and “Recognized support of the industry.” Industry groups can be great for networking but let’s see it for what it is: pay to play. Joining four groups at $5,000/group will run you $20k and that’s just to get your seat at the table - no sponsorships, no event tickets, nothing. I have nothing against these organizations and even met CEO of HTNG once over coffee in suburban Illinois; he’s a really great (and smart) guy with a strong hospitality IT leadership background and an incredible resume. There are no malevolent players here, just an industry ripe for disruption. Partnerships are the sweet spot In April of 2015 Triptease launched a major campaign to partner with popular booking engines. Partnerships enable parties to gain huge exposure and onboard very quickly. Triptease partnered with 6 players to tap 10,000 potential hotels before landing the big fish – Synxis in May 2015. Partnerships can come in many forms: strategic investment, bundling, cross selling, co-branded webinars, distribution deals, etc. Partnerships are low cost and all they require is a little creativity, trust and execution. Ok, having worked on the Global Partnerships team at Starwood I know that sounds way easier than it actually is. Conclusion So when we look at Charlie’s 12,000 hotel install base and assume 25% of customers still get the product free as early adopters, we’ve still got around $1.8M monthly recurring revenue (MRR), assuming $200 average monthly subscription. Charlie’s been quoted with a goal of hitting 30,000 hotels in the next few years ($6M MRR) and I’m a believer. That’s a pretty incredible business and even at the aggressive target it’s less than 17% penetration of the current hotel market (which will grow materially by then). Triptease has already derisked the business in a major way (although there are always risks). The probability of getting to where they are today is probably .0001% (for a new startup). And if you think that’s you, you’d better have the grit and tenacity demonstrated by Charlie and Alasdair during their 2-year journey to product market fit. As Charlie and Alastair learned in Triptease’s formative years, it’s still a pay to play industry. Buyers (hotel teams) haven’t evolved competencies to understand the benefits of many SaaS products and their organizational structures for the most part haven’t evolved either (hence the title VP of Sales & Marketing). The fact that the hotel industry is highly fragmented and has a convoluted ownership/management/franchise structure certainly doesn’t help. Hospitality still relies on industry groups like those whose importance faded decades ago for many other industries. Suppliers are stuck buying ads in print magazines with artificial circulation and on sketchy link farms from Mexico (Nevistas, I’m looking at you). Charlie, Alasdair and the Triptease team (also shout out to Marketing Director Ian Macleod) have done an incredible job at creating a first class product (and brand) then deploying the product with near perfect execution. They discovered a simple and scalable truth then used it to grow at an astonishing rate – I’d argue unheard of for suppliers of hotel tech. I truly believe that if hotel technology suppliers could work together more efficiently without the confines of archaic hospitality rituals - hotels could make more money and would be better equipped to compete with the likes of the home sharing economy and OTAs. No I’m not talking about robot butlers and drone Champagne delivery – I’m talking about real innovation. Although, the old head of PR at Starwood told me this stunt took the spotlight from SPG Keyless in the media for 2 weeks so congrats to the team at Casa Madrona for a hilariously awesome stunt. "Hotel technology suppliers are creating killer products every day - the problem is that the market hasn’t caught up." By working together through strategic partnerships and sharing best practices, hotel suppliers can increase chances of success and lower costs to deployment. Hospitality isn't zero sum and working together can raise all ships. For those interested, we've started a LinkedIn group called Hotel Tech Insider to do just that, so join many of the industries top executives and apply today.
Recent Direct Booking Tools News & Community Updates
February 12, 2018 - Hotel Tech Report has named Triptease 2018’s top rated Direct Booking Platform based on data from thousands of hoteliers in more than 40 countries around the world. Over 100 of the world’s elite hotel technology products competed for a chance to win this prestigious title. The HotelTechAwards platform (by HotelTechReport.com) leverages real customer data to determine best of breed products that help hoteliers grow their bottom lines. “You don’t have to be a hotelier to understand the value of Triptease. When we book hotels as consumers we start by researching on OTA’s to see variety. Once we’ve narrowed our consideration set we look at hotel websites for better information. Many travelers then return to book on the OTA costing hotels billions of dollars each year. Triptease has an elegant suite of solutions that solve this problem. It’s no surprise that hoteliers everywhere are joining the Triptease party by the thousands,” says Hotel Tech Report’s Jordan Hollander. Triptease is poised for sustained growth in 2018. Hoteliers recognized Triptease’s impeccable global customer support where Triptease exceeded the category average by more than 9%. Few companies inspire as much fervor amongst customers as Triptease as evidenced by commentary from a Switzerland based General Manager, “Triptease is what the hotel industry has been waiting for! It is visionary and constantly looking to improve their product. All employees that I dealt with were dedicated and enthusiastic and gave great support." To read the full review and more, head to the Triptease profile on Hotel Tech Report