Hotel metasearch site Room 77 this month secured more than $30 million in new funding from a slate of investors including Concur, which already had a stake in the company, and Expedia. Described by general manager and vice president of product Kevin Fliess as "Kayak for hotels on steroids," Room 77 launched in 2011 and sought to stand out from other search tools by focusing on specific details about hotel rooms themselves, not just the hotel properties. Fliess this month spoke to The Beat's Michael B. Baker about growth plans, trends in the metasearch sector and applications for corporate travel.
Baker: What was your growth pattern during the last year, and what are you plans for the recent investment?
Fliess: We're strictly focused on the hotel product, which means every day we get up and think about how we can create the world's best hotel search experience. For us, it comes down to two things. One is having the most price and availability of anyone out there, and to do that, what we've done is enter into partnerships with all the major online travel agencies, as well as many of the major hotel chains, to pull price and availability into our search experience in real time, so that consumers have the confidence to know that they're getting the best deal. The second thing we've invested is unique insight about hotels. This is where Room 77 started. When we first launched, we launched with unique room content on about 400,000 individual hotel rooms worldwide. All that content is still there, and it helps create a better shopping experience for consumers and provides richer merchandising for the hotelier. We've expanded that database from 400,000 to about a million rooms today. We're leveraging that room data to get consumers into a room that matches their preferences.
We also rolled out last year the room concierge service. When you book on Room 77 a four-star hotel or higher, or spend more than $400, we ask you what your room preferences are, and we work with the hotel to get the consumer into a room that's going to meet or exceed their preferences. It's a free service. Eighty-five percent of travelers eligible opt in, and 90 percent report that the service has met or exceeded their expectations. For business travelers who may be in town only a couple of nights and want to be assured they're getting a good night's rest and aren't in the crappiest room in the hotel, we go the extra mile to take their room preferences and make sure they have a pleasant check-in and that there are no surprises when they check into their room.
In total, we booked about 200,000 room nights through our system over the course of the last nine months. We're seeing customers coming back and repeating with us, booking with us multiple times. We were able to basically__with that early success__go out and raise this big round [of funding], and we're going to use this investment to expand and grow our brand presence and strengthen our product across both web and mobile. The product is available on the website but also as an app for iPhone and Android, and we'll be optimizing our mobile web experience in the next few weeks.
Baker: On what percentage of your inventory do you have that deeper content?
Fliess: In terms of layering in our original content, we now have room details on a million individual hotel rooms worldwide. Those million rooms cover about 2,500 hotels. It's a fraction of the 200,000 bookable hotels that have that room-level detail, but our attitude is that room-level detail is more interesting on higher-end hotels. You'll find it on typically 3.5-star hotels and higher in major U.S. destinations. In addition, we have what we call insider tips, which we source from the front desk, concierge or the property. We use insider tips on about 15,000 hotels worldwide: Which floors are the quietest, which areas have the best view and any oversized rooms in the property. We've completed the majority of the U.S. market and now are starting to add content more on a global basis.
Baker: How much use are you getting from corporate travelers?
Fliess: What we've seen from corporate travelers is a lot of interest because we have access to all manner of rates that are in the industry. If I shop directly through an OTA, chances are I'm only going to see merchant rates that are pre-pay rates. As a corporate traveler, all things equal, I'd like to do things directly with the hotel, earn my loyalty points and have the flexibility to cancel. At one large Fortune 100 company, I'm talking to their business development executive and he said the rule within that company is that you have to use their managed travel product to book air, but they can shop anywhere they want for hotels. This corporate traveler was experiencing a lot of frustration with how things were handled in the past. He had to go to the hotel site and the OTA site and had no way to do quick comparison-shopping. With Room 77, we show you all those rates from both the hotels as well as from the GDS, as well as the OTAs, so the corporate traveler has total control. There's been a lot of traction with business travelers motivated to save time, find the best rate and take advantage of those benefits they can only get if they book through the hotel.
Baker: Do many of your corporate users come from a similar model, where air travel is tightly managed but hotel bookings are not?
Fliess: A large company I worked for in a previous life was the same thing. You were encouraged to use the corporate portal, but as long as you stayed within T&E guidelines, you were OK. Air was mandated through the corporate travel portal because they had massive negotiated discounts through the airlines, but with hotels, it was carte blanche. We know there's a large group of corporate travelers where they may be part of a team within a large company or part of a small- and medium-size business where they have a lot of flexibility and just have to stay within T&E guidelines. Because business travelers oftentimes have eligible discounts, whether they're members of AAA or happen to fall into senior categories, we have access to those qualified rates. Unlike other metasearch sites, you also will see those kinds of rates: automobile club rates, senior rates, military rates and government rates. Oftentimes, there's 10 to 20 percent savings just by being a member of one of those qualified groups.
Baker: What differences do you see between web and mobile bookings?
Fliess: The trend on mobile is the booking window tends to be much shorter, 24 to 48 hours. On the web, it tends to be a little longer lead-time, five to seven days. We see that trend continuing. We do a lot of last-minute transactions, many from corporate travelers on the road who need to extend their stay or have plans that have changed.
Baker: Do you think we're going to continue to see new companies emerge in the hotel booking space, or are we reaching critical mass?
Fliess: You're going to continue to see a lot of startups and new ideas that will come forth. Hotel metasearch is a market that is really starting to grow, as evidenced by the fact that Kayak was just acquired by Priceline, and Expedia acquired Trivago and made an investment in us. It's not a winner-take-all type of market. We'll see three or four significant players in metasearch continuing to compete and grow over time. There's a real business model here. It's a great platform for hoteliers and OTAs, because we're driving very qualified leads to those partners, and it's a great platform for consumers because it simplifies the shopping process and saves them a considerable amount of time and dollars.