When HotelQuickly received their 1.2 million funding in 2013, we highlighted the team and a look at bit of the market they are serving. Back then, we did not actually look very closely at how HotelQuickly is actually doing it and why it is providing the service as is. Tomas Laboutka, CEO of HotelQuickly, gave a presentation at Mobile Monday Bangkok #8 about Mobile is transforming the hotel booking industry.
Pre Dot Com
In essence, Tomas talked about the historical changes that have taken place in the travel, and particularly booking industry, over the last decades. The generation 50+ has had to live without internet access for the vast majority of their live and hence had to rely on travel agents, those stores you still see in Thailand quite often. Booking was pretty in-transparent because the travel agents would provide a fixed price that could not easily compare. In fact, one had to wait till all the holiday catalogues arrived at home until an “informed” decision could be made. Once the choice was made, the travel agent was visited and preferences were told. The agent would accommodate to their best knowledge or will, subsequently arrange everything and one random day you would receive your booking confirmations, and the holiday could start. All in all the process took about 8 month, which was not much of a problem, because well, there was usually only one annual leave anyway and one’s mind was made up quite early.
Online Travel Agencies
Fortunately those days are over. With the rise of the internet, hotel booking platforms like Booking.com, Hotels.com or Agoda rose to fame providing an easy way to book hotels online and compare prices easily from home, effectively cutting the agent next door out, and being able to offer far better prices, customer reviews, and more transparency, so it seems. Two of three companies above belong to Priceline, and the other global player is Expedia (owns Hotel.com). Those two also own price comparison pages, such as Kayak (Priceline). That’s in fact how much transparency there is. Of course all hotel booking services claim to have the “best price” and they do – it’s everywhere the same low or high (depends on your view) price. Hotels, at one point, figured out that if they cannot decrease their price anymore wherefore they just give the same low price to all the services and let them figure out how to market it. Going to Agoda, Hotels.com or Booking.com will now flash users with awesome sales and best price guarantee. Theoretically those booking platforms can differentiate themselves through extra services, instead of price –call them and demand a free upgrade if they make a mistake, they will happily do so.
HotelQuickly, and other companies such as Hotel Tonight see an opportunity in this parity – it is same day booking. Not just because of mobile, but as part of a trend of how people travel. Distance is pretty relative in this age. Thanks to low cost carriers, flying across the region for a weekend is no longer beyond reach for the average person. Flexibility is something this decade is all about and mobile is adding to it, and will add even more to it once roaming cost decrease. Mobile allows the user to be flexible and companies, such as HotelQuickly, to gain information about user location, and thanks to social profiles, interests, job information and such. This allows HotelQuickly to deliver very last minute deals of Hotels that are not completely booked, in close proximity, and that fit the users social profile. Additionally, hotels are able to sell the rooms that are not booked for the day instead of hoping that a walk in will luckily emerge. Of course hotels have to decrease their price and HotelQuickly claims they do so by 28% on average. How can Hotels afford it? Generally speaking, the cost for the Hotel is more or less fixed because the room has to be available anyways. Hotels have to calculate in services they offer, but once all of that is covered it is better to have a small profit on a room than no profit whatsoever.
In a recent article on E27, Christian Mischler, COO of HotelQuickly, was quoted saying that HotelQuickly is in some markets, able to offer much higher discounts, up to 50 per cent from the lowest flash deal price online. Flashdeals, is the keyword here. HotelQuickly is not going to push Online Travel Agent’s out of the market, since it does not provide additional features, such as room type, ahead of time booking and such. It’s a take it or leave it situation for consumers and hotels alike. The power of HotelQuickly is in its closed community and much targeted offering. Given that HotelQuickly is all over the region already it will likely be able to seize an even greater opportunity when the borders of the ASEAN countries open up.