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With 300 on-boarded hotels across the globe, Bespoke Hotels works on a hotel-aggregator model

Sindhu Kashyap
20th Jan 2016
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Today, finding a hotel or accommodation while travelling isn’t a hassle it once was, thanks to the aggregators like OYO Rooms, Zo Rooms, Treebo and even options like Stayzilla. Even the problem of last-minute hotel and room booking is being addressed by the likes of HotelsAroundYou.

Joining this bandwagon is Bespoke Hotels, a global aggregator of value priced and mid-scale hotels. A combined entity of Peppermint and Bespoke Hotels UK, the platform found that while individually both Bespoke and Peppermint filled gaps in the market in small ways, there wasn’t a global aggregator of mid-scale hotels.

Thirty-five-year-old Arjun Baljee, Founder of Peppermint Hotels, Stayology and now a core member of the Bespoke Hotel aggregator team, says, “We are a hotel aggregator and not a room and signboard aggregator. The guest wants similar hotel experiences while retaining the individuality of each hotel.”

As Bespoke Hotels is into global play its unit pricing is higher. The average price in UK for their hotels is GBP 150 and in India it is priced at Rs 5,000. Arjun says that they aren’t in the discount game and so they have the ability to help hotels maximise revenues.

Yourstory-Bespoke
Left to Right: Nick, Arjun, Haydn and Robin

Breaking down the gaps

Bespoke is run by a very senior team of experienced hoteliers. Peppermint too has India knowledge and has firsthand experience of investments and running an online aggregator in India.

There were two gaping holes in the existing model that the team has realised early on and intends to fill:

  1. Domain expertise – Arjun says that while the team at Bespoke Hotels is looking at a technological solution to aggregate hotels, they want to retain the brand identity. That end-product promise is a hotel, and there have to be checks and balances in place to ensure the running of those hotels efficiently every time. This is where solid domain expertise comes in.
  2. Limiting geography for travel – In order to build a powerful soft-brand, they have to build a global brand. Guests cannot be limited by offering in one geography as the travel has exponentially increased in time and is only going to increase.

The core team

Bespoke’s Chairman, Robin Sheppard is a hospitality veteran, Haydn Fentum is the Managing Director of the UK hotel operations and Nick Turner comes to Bespoke as Head of International Growth. Arjun brings to the platform the India aggregation piece that ran under Peppermint’s online portal www.playstaylove.com.

Bespoke Hotels is being spearheaded by Nick and Arjun, and the idea really is to add 100s of hotels every year that fall into a similar mindspace of guests. Till date, Bespoke Hotels claims to have over 300 hotels globally on the platform, comprising a little over 20,000 rooms and complete hotel offerings.

The team hopes to double this in the next few months. Arjun says that the transactions are growing rapidly and hopes that with the new platform (web and app) for guests being launched shortly, the numbers will rise exponentially.

“We follow a similar commission model per transaction that is standard and prevalent with aggregators. However we are focussed on unit economics, and ensure that we are profitable per transaction,” adds Arjun.

Technology and its challenges

Some of the challenges the team believes to face is creating a unified tech platform globally. Arjun says that as the hotels exist and run individual property management and channel connect systems, to bring all this to one platform is a costly technological challenge.

The team is in the process of unifying this with new APIs and patches created so that all inventory is available on the platform real time and revenue management technology is embedded into the pricing engine on the platform.

The team is currently bootstrapped and is to raise Series A in the next few months. It is working on the technology, while signing up hotels on the platform.

YourStory take

With even Paytm entering the hotel aggregation space, the market is seeing a buzz in the past few months. In 2015, investors had pumped in over $165 million across five deals in the space.

In February last year, budget accommodation marketplace StayZilla raised $20 million while OYO and Treebo secured $125 million (including this round) and $6 million respectively.

However, the hotel booking industry still faces challenges while convincing users to book accommodation online. About 50 per cent of booking still happens via an offline channel.

Also with the aggregator model, especially if the focus is on hotels and not just rooms, there is a question of the operational challenges and scalability. Additionally, there are reports of several budget and mid-sized hotel chains across the country working on newer growth strategies to take on the aggregators.

Questions arise on the sustainability of quality in the aggregator models. Does being a hotel aggregator fix that? Only time will tell.

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