Swiss Startup Offers Commission-Free Hotel Booking

A new Geneva-based hotel booking engine, which began taking reservations this month, aims to disrupt the online travel agency model by offering hotels commission-free bookings.

Michal Wrobel, one of four founders of Treovi, likened the reservations system to a Craigslist for the travel industry. When classified ads moved online in the late 1990s, users generally were charged for the service. Craigslist, Gumtree and other sites changed that model by letting users post ads for free__though they still could pay for premium placement and other services.

Treovi brings a similar model by allowing hotels to load their inventory without charge, though they will be able to pay for special services beyond that, Wrobel said.

"The model that the OTAs have used__a commission-based system that was the offline model translated into an online world__is not relevant anymore," Wrobel said. "This model has become more difficult to bear, especially for independent hotels, and there is a need not for a change but a disruption to that system."

Treovi began registering hotels in early July and within a month had about 1,300 registered, of which more than half already uploaded inventory, Wrobel said. The system is targeting hotels globally, both independent hotels and properties that are part of small and large chains.

Hotel bookings through digital channels within the next several years are forecast to account for about half of all bookings, compared with about a third in 2010, according to research released this year by STR and the American Hotel & Lodging Association. As such, hotels eagerly are seeking ways to cut costs associated with online reservations. Six major hotel chains early this year joined forces to create their own booking engine, Room Key, which still operates on a commission-type model but with costs reportedly well below those of the online travel agencies, which often can take a fifth or more of a hotel's rate.

With so many booking options for hotels, however, a new startup is unlikely to gain traction unless it offers something to users as well. With Treovi, Wrobel said that will be a social media element, drawing from the technology behind Facebook's Open Graph protocol: the technology that posts various activities onto a Facebook user's timeline: reading articles, listening to music on Spotify or watching a video, for example. On Treovi, that technology could post an entry on a user's Facebook stream when they book a hotel, and perhaps could help multiple travelers link up when they are heading to the same destination, he said.

"We're not planning on making a social media network just for travel but just to use small elements we find here and there," Wrobel said. "All that we're planning through social media has been used in other business to promote things but not in the hotel booking experience."

Social media components likely will be added by spring 2013, he said.

In the meantime, Treovi still is expanding under what it is calling a "soft launch." Cursory searches for dates in September, for example, reveal only a couple of hotels in several major global cities, and none in a few. Growth will come as new hotels sign on and the company adds new components for both hotels and travelers, Wrobel said.

That also would include components targeting the corporate travel market, though details are scant at this point.

"We're planning on introducing a product later on that could appeal to corporate travelers, but it's confidential," Wrobel claimed. "We see corporate clients moving away from the global distribution systems, because the GDSs are outdated."