If you want to book a hotel room online at a major chain, you have no shortage of options. But what about independent and boutique hotels?
Cheryl Rosner had a lot of experience with online travel booking for the big guys. She did turns as president of Hotels.com, Expedia Corporate Travel, and TicketsNow. But she decided to set her sights on a different market.
Rosner started Stayful.com in beta mode in July of 2013 and launched later that year. Stayful’s platform takes the pain out of contacting the hotels one at a time. It provides a list of available independent and boutique hotels and suggested, below standard rate pricing. The user then bids to get the best deal.
“It’s really exciting when you find people who want to share that journey and who you love working with. Then everything comes into place,” she tells Fast Company.
Now, less than a year later, Stayful features a full complement of hard-to-find indie hotels in 12 cities and is expanding into more. “We’ve had month-over-month growth in the triple digits,” Rosner says, “but it’s still small numbers.”
Stayful is part of the most recent wave of tech companies jockeying for position in what Rosner estimates is a market share worth $40 billion in overall hotel bookings per year. Rosner’s optimistic. “There’s plenty of room to grab,” she says, “Particularly the part of the market we play in.”
Grandaddies of the travel web Expedia and Booking do a brisk business in chain hotels, while sites like Priceline and Hotwire sprinkle indies throughout. Yet Rosner believes that for the less-well-known, yet often surprisingly posh, boutique hotels, the market is very fragmented.
“No one else is aggregating them,” says Rosner, “and it is also growing at a great pace.” In the U.S., she estimates independent hotels make up 35% of the total hotel market. “Discovering boutique hotels is of great interest to the consumer,” Rosner contends, “They say ‘how do I find them and how do I see more of them?’”
Rosner says what’s makes the platform stand out among established consumer websites is solving a supplier problem. Hotel rooms are like food, if you don’t use them, you lose them. “We are solving a problem for the suppliers for the benefit of the consumer,” she explains, “We fill inventory that would otherwise perish.” Rosner says that boutique hotels typically have a lower occupancy rate than the major chains. “They are most dependent on distribution and pay the most for it,” she says.
Put simply, if there’s no head in the bed on a given night, the hotel loses money. With Stayful’s bidding process, even a lower rate is better than an empty room that’s not generating any revenue. In exchange for a booking through Stayful, the hotel pays 10%. “Automating a negotiation is disruptive technology,” she underscores, “and [we offer] a transparent marketplace.”
According to Rosner, there have only been two hiccups in the bidding and booking process, both of which were quickly resolved. For this, she credits her team of 10, most of whom are veterans of Orbitz, Expedia, Jetsetter, and other online travel sites. Her cofounder Shariq Minhas came from Hotwire. This added value, especially in roles that require established relationships with hotel partners.
Rosner maintains she didn’t know any of the team before they came on board. “We were all one degree of separation,” she says, meeting through mutual friends or advisors. This has puzzled some people Rosner knows, but she confesses that many of her former colleagues have gone on to head up other companies and serve as consultants to Stayful.
She didn’t take everyone away from other travel companies, though. On the product and engineering side, Rosner looked outside the industry because, “if travel tech was doing the job we all hoped it would do there would be more satisfied customers out there.”
Rosner says she’s realized over the course of her career when you have a dream, you need to go for it, competition be damned. For now, the rollercoaster ride of a startup is one that she’s completely on board with.
“There is nothing more fun than doing something really hard in a competitive market,” she says. “I see us as a new generation. If you ask me is travel tech really serving the customer the way we dreamed? The answer is no, not yet. That is what we are here for.”