Meet Erik Tengen: The Most Interesting Man in the World of Hospitality
By Jordan Hollander
Last updated October 31, 2019
5 min read
If you haven't heard about Erik Tengen or his rocketship startup Oaky you've probably turned off all social media apps - so congrats you are more disciplined than we are. Erik doesn't have a generic hospitality CV. In fact, his CV isn't generic by any stretch.
The Oaky brand has resonated with the hospitality community in a way that old world tech just can't seem to figure out. We sat down with Erik to discuss his secret sauce and to learn how a DJ gone professional poker player has come to change the way hotels create incredible experiences for guests.
If you aren't familiar with hotel upselling - here's what you need to know before reading this interview. Usually to increase ADR (average daily rate) means you'll have to increase room prices. Increased prices can have a negative effect on the guest experience.
"Simply put: when guests pay more for something they expect more but Erik and his team have found a loophole for hotels..."
Oaky enables their hotel partners to automatically upsell things like ancillary experiences and room upgrades to increase ADR while simultaneously creating a better and more seamless experiences for hotel guests. It's genius. Don't believe us, read what his customers are saying about the product on Oaky's profile.
After all, being a DJ might not actually be so different from upselling.
DJ's have to read the crowd and learn from mistakes. Each night they learn what the crowd likes by reading their energy. Oaky reads the crowd by leveraging historical data sets to make predictions about what future guests will enjoy.
DJs curate experiences for nightlife goers where Oaky curates the guest experience at more than a thousand hotels throughout the world.
Since I was just an amateur college DJ, maybe it's better than we turn it over to Erik from here.
What was your background prior to starting the company?
I grew up in Malmö, Sweden. After high school I spent about five years playing professional poker and being a DJ. It was a roller-coaster lifestyle, quite similar to the early days of entrepreneurship actually, but at some point I wanted to move on. Many people around me at the time, who I thought had fun jobs, had studied at Hotelschool The Hague. I’ve always had a passion for service, and thought: “Holland. Why not!” I applied, and within 4 weeks I was standing there with my suitcases in front of a majestic hotel called The Kurhaus. It was a good education, and I’d recommend it to anyone who wants to become great at presenting themselves and grow a big network.
Three years later I went to Kuala Lumpur for my final internship, and that’s where I met Lars (Oaky co-founder). We became good friends and were determined to start a business together. The first idea was a soup franchise, and lasted about as long as it takes to say soup. A few months later I moved back to Amsterdam to graduate, and immediately met Tako (Oaky co-founder) who had studied together with Lars. We complemented each other really well: Tako was the analytical, structured person, Lars was the creative one, and I was the sales guy. From Lars’ kitchen table, the three of us started sketching an app for hotels, charmingly naive about the journey ahead.
What made you decide to jump in and actually create the business that you sketched?
Oaky actually started as a real-time feedback company. From working in hotels, it was frustrating when guests gave feedback on TripAdvisor when they had left the hotel. As a hotelier, you couldn't do anything about it. With Oaky, we wanted to solve this by enabling guest feedback during the stay.
But selling a digital real-time feedback solution back in 2014 wasn’t easy. Most hoteliers didn’t see how technology could aid the guest experience, and it was difficult to sell something that didn't have a clear ROI. We needed to find a way for Oaky to generate revenue for hotels. So we started interviewing a lot of hoteliers: Where did they see a gap in the market and How could they be earning more revenue? I remember it like it was yesterday. From Lars’ kitchen table, we had moved to our first office (which had no windows), and a very friendly and successful General Manager, Floris, had agreed to a Skype call with us. He planted a seed about the opportunities of contacting the guest between the booking and the arrival, and introduced us to the idea of (Pre-arrival) Upselling.
The first customer was Eden Antwerp, a 3-star city hotel which was run by a study friend of mine, Jelle Landman. I think Jelle took the chance because he saw an opportunity to mould a product which shared his vision of enhancing the guest experience and increase revenues. And he got a really good price of course.
Here's the scoop on Oaky
Who is one mentor that has really helped you scale the business?
Our first mentor, Derk, said from the very beginning to focus on market share and growth instead of profit.
Another mentor is Uli Pillau. At a point when our vision was to try and build the full guest journey, Uli helped us realise that we would be better off if we lazer focus on only one thing instead. That was one of the reasons we became an up-selling company, and everything changed after that.
What's one commonly held belief that most hoteliers believe to be true that is wrong?
Many hoteliers believe that personalisation is not important enough to spend time on. But in reality, the cost of standardised digital communication, and generic upsell offers and promotions is enormous. Hotels are literally losing money with every guest that is walking through the front door.
What's the most surprising thing you've learned about scaling technology into hotels since founding the business?
If your solution requires PMS data, a big part of your success rely not only on your innovation - but on your ability to connect with the fragmented legacy systems out there.
Where do you see the company in 5-years?
Oaky will be powering up-selling for the entire travel industry.
I think in 5-years upselling will be embedded in native platforms in our phones, offered on all communication channels, automated, hyper-personalised, integrated with the total revenue management strategy and gamified for the full (in destination) guest experience. I imagine guests booking and playing VR games pre-stay to experience the hotel, and adding activities to the stay after testing them out from their couch at home.
Do you have any new products or feature launches coming out soon?
We know that hotels are losing out on revenue, because personalisation with current technology is hard.
That is changing with Oaky’s Automated Personalised Upselling.
We want to give maximum personalisation with minimum effort. That’s why we built 1-click personalisation. Already today, when you go live with Oaky, your account is pre-populated with the best-selling deals for your type of hotel, and your type of guests. Instead of generic offers, you have the perfect up-selling set-up to maximise profit for every guest that stay with you. If you change strategy to a new segment, say Business Travelers from a certain country, Oaky will suggest the best way to upsell to them too.
Hotel tech is a small community and vendors are constantly developing partnerships with companies who have built complementary products. Are there companies that have been a particularly good partners for Oaky?
Our community is packed with amazing people and entrepreneurs that drives the industry forward. We made a bet early that partnerships would be our key growth strategy, so only mentioning 1 or 2 would be difficult since they bring different types of value to the company.
For scale and automation Property Management Systems have been critical with partners such as: Mews Systems, Amadeus, apaleo, Cloudbeds, Protel, Guestline, Nitesoft, StayNTouch, Stardekk. For connectivity with multiple PMS systems, our partnerships with SiteMinder, Hapi Cloud, Impala, Snapshot. For pricing, local experiences, and transport, Taxi Electric, Revenue Management Systems and many more partnerships will be announced shortly.
Is there anything that the community can do to be helpful for you?
We are exploring to power upselling for CRMs, Omni-channel, Email, and other service providers who have contact with the guest. One exciting partner would be SalesForce.
Oaky offers the highest upsell conversion in the hotel industry today. By integrating Oaky’s white-labeled upsell technology to your guest-facing platform, we can automate and innovate new use cases around upselling and guest experience.
What are you listening to and reading these days?
What is one thing that most people don't know about you?
I used to work as a DJ spinning at clubs :)