Hotel metasearch site Room
77 has emerged as a standout player in the crowded field of hotel booking
technology startups. Launched in 2011, the company has raised more than $40
million from a slate of travel industry luminaries including Expedia and
Concur. In March, Room 77 hired as its CEO Drew Patterson, a former Kayak
executive who also co-founded luxury travel flash sale site Jetsetter and hotel
mobile check-in technology firm CheckMate. Patterson this month spoke with Business Travel News lodging editor
Michael B. Baker about the role he thinks the tool will play in corporate
travel, both managed and unmanaged, as well as how the hotel industry is
adapting to the growth of mobile booking.
How is Room 77 targeting corporate travelers?
For corporate travelers, we see the development of mobile being really important for them. Corporate travelers are on the move. They tend to have a much shorter booking window than others. Plans change far more frequently. For all those reasons, being able to transact via mobile is critical. For Room 77, that's been a big focus for us. We have native applications for iOS and Android. We've also significantly invested in a mobile web-optimized experience, so no matter what device a user is on, we have tools that meet their needs. Sixty-five percent of all mobile bookings that take place on Room 77 are for same day. It's a huge number. We include in our mobile environment lots of mobile-only rates, rates that are available only if you're on a mobile device.
Where do these mobile-only rates originate?
One of the things that you've seen hotels doing in part to tap into all the activity taking place on mobile is to price segregate a little bit. They have rates they only publish in the mobile environment. You won't see them on the desktop websites for Expedia or Bookings.com. Those are rates we're indexing and showing to our users. So, if you're using Room 77 via our mobile web experience or our Android/iOS app, you'll get rates that aren't available elsewhere.
So, hotels use them to move last-minute vacancies?
Exactly. They use these to top off their availability. Because it's last-minute, they know how many rooms they need, and there are fewer options to fill them.
Do you think open booking will become more prevalent in corporate travel?
That's a trend that we play into really nicely. Concur, which has been the leader in the development of this idea, participated in our last round of funding, along with Felicis Ventures and Expedia. We raised $30 million at the end of last year. Concur was one of the participants in that. They're putting their money where their mouth is in the excitement around open booking and the value hotel search can play into that. Alongside that, we've had lots of conversations with different players about what we do commercially, how they can take our search results and technology and make that available to corporate travelers in a more managed travel environment. While we don't have news to announce today, we'll be in the position to talk about that in the weeks to come, where we have some relationships that will be launching.
With that new funding in place, what are your top priorities?
First and foremost, it's building the best hotel search engine in the world. It's still challenging for consumers to find and book a hotel, because they don't have confidence about all the prices that are available in the marketplace. They don't have confidence about the place they're choosing to stay and having a sense of what it'll be like before they get there. It's difficult for consumers to know what the right hotel is for them. We index more rates than any other search engine or hotel-booking tool. We have things like AAA rates, AARP rates and qualified discounts that don't show up in any other search engine. We also let them know which hotels have free amenities: where I can get free Wi-Fi, free parking and which hotels have airport shuttles. We let consumers filter based on those factors, and of course, that helps them save money.
Have you been adding personnel to the company?
In the past year, we've been able to build out the team. For me, it was a treat to come in and join such a world-class organization. We've got folks from Google and Facebook, and as a result, Room 77 has built search technology that's second to none. We've added two big new hires: Doug Aley joined us. He'd been founder and CEO of Off & Away, and he most recently ran product for Zulily, which is one of the huge successes in the flash sale category. He joined about two weeks ago on product and corporate development. We also brought in Jessie Becker. She spent 12 years at Netflix, prior to its launch to her final job as chief marketing officer. It brings consumer marketing experience to us, and she joins us as chief marketing officer.
What are some of the challenges of mobile hotel booking?
One of the challenges a lot of folks have is how to transact on these mobile devices. Booking in a mobile environment, you don't have the same screen real estate. Calendars, calls to action, buttons and the like that you have on the desktop just don't work in a breakdown on the phone because the screen is too small. We've dealt with that by investing in a mobile-optimized experience. When you're on our mobile-optimized website, you have big form factors, a native calendar you're able to select dates from and we've invested in something that we call branded book. What this means, for a number of our partners, where they have yet to build mobile-optimized booking experiences, we do what we call proxying their booking page. So, you have the same transaction, where you're booking directly with that partner, but it happens on a conversion page that's been designed by Room 77, and it's optimized for a mobile device.
Corporate travelers value being able to book directly with the hotel. Corporate travelers are particularly savvy and know that when you book with a third party, you end up with disadvantaged terms, whether that means that you have to pay at the time of booking, the rates are noncancellable or it means you get stuck in one of the less desirable rooms on the property. We enable the consumer to book direct, know which are cancellable rates and noncancellable rates and let them know they'll earn loyalty points when they book directly with the hotel. These assets we built around Room IQ, where we let people know what the best rooms in the property are and what they need to ask for in the hotel to make sure they don't get stuck next to the elevator.
What's your angle as we move into a stronger hotel seller's market?
We're moving into a higher-occupancy environment. A friend in the industry in Chicago said there would be over 100 sellout nights in Chicago. One out of three nights in the Downtown Loop will be sold out. That will be a big problem for corporate travelers, and that's particularly manifested when you're using a specific online travel agency. OTAs will end up selling out when there still are rooms available in the hotel. In nine out of 10 searches, we'll see one of our partners is sold out when there is still availability in that hotel. As hotels have to cut back on inventory, as there are fewer rooms available in the marketplace, it will be that much more important to have a tool finding all the rates, rooms and availability in the marketplace.