BTN's annual answer book for business travel managers.
Online hotel marketplace Roomer's business proposition is based on the resale of nonrefundable hotel bookings that travelers can't use. Once focused solely on distressed individual bookings, Roomer now is trying to mine a potentially large vein of at-risk inventory: underfilled corporate meeting room blocks at risk of attrition penalties.
Roomer recently launched the Roomer Partner Network, an initiative under which meeting planners can offer committed hotel rooms for resale. Individuals then can purchase the room nights, enabling the planner to recoup some investment and potentially head off an attrition charge.
"Think about us as a secondary marketplace," said Richie Karaburun, managing director of three-year-old, Tel Aviv-based Roomer.
The idea to branch into the meetings market was triggered by a customer request, Karaburun recently told BTN. " A couple of months ago, I got an email from one of the largest meeting planners from Canada that said, 'Can we use your platform for our meeting rooms that we book that are under attrition?' Sure. Why not?"
Planners who wish to use Roomer to resell guest rooms—there is no limit on the number of rooms they could sell—can name their own price for the inventory. Roomer tells users the "market price" for the location and date in question, Karaburun said, using rates from "a major" online travel agency. There is no charge to list the rooms for sale, but should Roomer sell them, it keeps 15 percent of the price, returning the rest to the planner. "That's why we're motivated, because if we don't actually sell it, we don't make money," he said.
First, though, Roomer validates that a contracted meeting exists. "We ask the meeting planners to send us some contractual information with the hotel," Karaburun said. "Nothing confidential. Just so we know that they're not selling someone else's room."
Hotels, generally speaking, accept the arrangement, he said.
"They would love to have the food and beverage revenue," Karaburun said. "They don't want to just charge room and tax and have [the room] empty. They love incremental revenue like spas, restaurants, room service and Wi-Fi. And [they're often] new customers.
"Some hotels say, 'Why can't we sell those rooms?' They call it double-dipping," he continued. "But when I ask them, 'How many times do you oversell? How many times are you 100 percent booked?' A handful of the time, maybe, in certain cities. But the average occupancies is in the higher 60s in America."
Karaburun wouldn't disclose privately held Roomer's volume of rooms sold through its platform, though he claimed month-over-month growth of 30 percent to 50 percent throughout 2014. However, he noted that rates of rooms sold vary greatly by city, and those with some of the highest such conversion rates are in cities traditionally favored by many meeting planners.
"Our conversions are all the way up to 50 percent in places like Las Vegas and New York," he said. "It's much lower in places like Minneapolis. That's one of the reasons we like working with meeting planners, [as] generally the meeting takes place in desirable cities like Miami, Orlando, Las Vegas and New York."
Roomer gets the word out about its rooms for sale through a variety of channels, including metasearch outlets, social media and Google advertising. Karaburun hopes to broaden that to include corporate online booking tools through partnerships, though the company has not yet signed any such deals.
Roomer does not sell meeting space through its platform, and Karaburun said the company wasn't interested in doing so, at least for now. Still, the potential to avoid contractual penalties on guest room attrition should offer motivation to sell, he said.
"That's why you sell your room. The hotel's got your money," Karaburun said. "For meeting planners, hotels either got your money or they're going to get your money anyway, because it's in your contract."
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