Led by Concur through its Perfect Trip Fund, Yapta last month closed $4.2 million in additional funding "with the option to raise an additional $2 million over the next 90 days." The firm, whose technology tracks airfares and alerts clients to money-saving rebooking opportunities, has seen what CEO James Filsinger called "some great momentum lately." That includes the latest cash injection, a recent milestone in which the company claimed to reach $1 million in total corporate client savings, kind words from Ultramar and another agency reseller agreement with Omega World Travel. Where does Yapta go from here? Filsinger said the new investment positions the company to make further investments in and refinements to its FareIQ product, add staff and "potentially enter some other price-assurance and price-tracking verticals within the travel industry." Filsinger in an interview with senior editor Jay Boehmer explained why the hotel segment, not rental car, is the likeliest next frontier. An edited transcript follows.
Boehmer: How far along are you in developing the price-tracking concept for hotel bookings?
Filsinger: I was able to show a prototype of a hotel price-tracking tool at Concur Fusion earlier this year. We believe that corporate travel is ripe for a solution for hotel price tracking.
It's still early-stage, but there is technology built around there. We actually showed live connectivity into Concur Travel. There's a lot of discussion around open booking and all of that, so I showed the capability to capture open-booked hotel itineraries, pull those into our system to price-track, while also highlighting preferred properties so that the corporation has the potential opportunity to even draw back those travelers into a preferred property.
Boehmer: At hotels, you can generally cancel and rebook without penalty. Does that make the model a little more palatable?
Filsinger: On the hotel side, you won't generally see the types of savings that you would see on an individual airline ticket. But to your point, you're right. Given the fact that, in business travel anyway, the merchant model hasn't gotten any traction__and I don't believe it will, just given the flexibility needed by corporate travelers__it's really just a reservation and a confirmation of a reservation. So the ability to capture savings in the $20 to $50 per-night range is something that's very intriguing.
Boehmer: What about rental car, where you can generally also cancel and rebook, without fees, at any time?
Filsinger: There's potential for us to look at that. We've had some internal strategic discussions about it. I don't know the last time your flew into, for example, DFW, but your rental is only a fraction of the actual bill because there are so many taxes and fees on top of that that won't fluctuate. So [when] you have a $70-per-day rental, in reality that's closer to $30, and then you're checking if can you get the same car for $25 or not. Is it worth it to re-reserve that car? There's potential for opportunity, but I'm not as confident in the price volatility and ability to capture significant savings given the price point.
Boehmer: Major carriers recently raised change fees. Have you calculated the extent that could eat into savings potential for FareIQ customers?
Filsinger: First and foremost, that even makes it more important for companies to use FareIQ. We're only going to alert when the savings exceed a particular threshold. Secondly, to my knowledge, that was primarily the four majors in the United States and primarily for domestic flights and some to Latin America. We did an assessment across all of the itineraries that we track, and the impact was fairly minimal__a very small percentage-point difference to us. The reason is that the change-fee increases were limited, and we not only track domestic flights but international flights. Typically, the higher average ticket price is where our clients will see the most opportunity for the most savings.
Also, we have true void-cancel window functionality in our system. It's not just a 24-hour window; it goes to 11:59 p.m. the next business day. Our system captures and accounts for that fact, so if a ticket is booked on 8 a.m. on Friday morning, we're going to track that in the void window all the way through 11:59 p.m. on Monday. We do see a lot of opportunity in the void window when the change fee does not apply.
Boehmer: Why is it until 11:59 p.m. the next day and not within 24 hours, as the DOT rules were structured?
Filsinger: It ties back to ARC settlement and how often they actually settle. It's pretty much that you have an opportunity to void, cancel or hold that until 11:59 p.m. the next day. Some airlines may impose a policy of 24 hours, and I may be speaking out of turn here, but you really have until 11:59 p.m. the next business day.
Boehmer: Have you put a number yet on Yapta headcount additions?
Filsinger: By the end of next year, we will have more than doubled our staff. It's going to be a pretty big hiring ramp, and we think we can be aggressive with that. Actual employees, we're right around 15, and with some contract help that we have, we're around 22 people. So we're still pretty small, but the more than doubling will include the contract help. Part of that is going to be increasing our sales and marketing efforts and our sales team and then also building out our engineering team as well to make sure we can rapidly respond to clients.