Whether it is customer experience, newer platforms, or more established players entering the fray, budget hotels seem to be the buzz word. In 2008, however, it was a very different world. Aditya Sanghi and Prabhash Bhatnagar saw that the industry was new and believed that, in the coming years, there would be a growing need to manage them professionally. That gave birth to Hotelogix, a cloud-based property management and distribution platform, based out of Bengaluru.
When the duo decided to look at the budget hotel space and see how big the problem was, they realised it was a global issue. The online space was getting popular and travellers were booking hotel rooms online.
It was also becoming very easy for hotels to tie up with the portals and go online. “It was a simple, easy, and inexpensive way for hotel owners to let an unknown traveller experience their brand to, alongside other well-established guys. We realised then itself that this was disruptive in nature and something that would be big,” says Aditya.
Hotelogix is now being used in 100 countries across the globe. The 100th country was onboarded this month with the signing on of Espace Holiday Homes in Dubai, United Arab Emirates. “Every small and mid-sized hospitality business will move to a Cloud PMS within the next five years in order to operate competitively in the global market. Hotelogix is committed to enabling this transition and making it as smooth as possible,” said Prabhash.
In the last three quarters, Hotelogix claims to have grown 50 per cent quarter-on-quarter in terms of customer acquisition. The team changed the overall go-to-market approach last year with a prioritised targeting of chain hotels/brands in specific markets, where, Hotelogix has material presence. The team has also focused on alliances with partners who have an existing relationship with a large number of hoteliers, and can hence be quickly reached. This strategy has helped the company gain good traction in several key markets.
With everyone going online, the duo realised that a traveller booking an unknown brand would have the same expectations as he has with other hotel brands. Customer expectations have changed drastically; over five to 10 years ago, if we paid over Rs. 2,000 for a hotel room and found the room a little unclean, it was accepted, but today it is different. Cleanliness and other factors are basic requirements.
“This directly translated to the kind of automation that the hotel owner needed in-house to translate that experience consistently,” adds Aditya. However, at the point when Hotelogix started, India wasn’t their target, as there wasn’t a market for SaaS products. The initial dig was in-bound and they opened the idea on the website. They didn’t have the product out, it was in the prototyping phase and the team saw they got enquires from across the globe.
However, unlike any traditional model, the team decided that they would have no feet on the street. They realised that the only way they could survive as a true SaaS player and sell across the globe was by ensuring they could sell across the globe sitting in India and selling remotely.
In 2010, they got an opportunity to be a part of the HITEC Trade show, which is considered the world’s largest Hospitality technology show.
“We didn’t even have a proper booth, the backdrop was made of flex and crumpled. By the time we reached there, we had to work till 2 am to ensure that the frame and the flex stood up till the inspection. We didn’t want to be disqualified,” adds Aditya. Hotelogix soon raised a seed round of funding from Mumbai Angels in 2011.
While they ramped up their sales operations, the team was adamant that they would exclusively be a remote online model. “There was a sales guy who left the job because we refused to change the model,” says Aditya.
The man had got a request from a hotel, which happened to be on his way to work. However, he was asked to close only via a remote demo and not meet the hotel owner. Aditya adds that he didn’t want his sales team to believe that they couldn’t close without a face-to-face meeting. It took the team two years to institutionalise this practice.
“We began with offering a free trial and found to our surprise that there wasn’t a single platform offering the industry a free trial. This meant that we had the opportunity to bring some of the best SaaS practices to the hospitality industry,” adds Aditya.
However, the team believed it was important to get everyone aligned. Aditya says he spent time ensuring the sales team didn’t feel dejected by a rejection. “It is the team that makes a company, and like in sports, organisations are run by teams and not just one or two individuals,” says Aditya.
The communication thus shifted more towards information dissemination and the importance of a cloud-based management and distribution platform. With more than 85 per cent of properties worldwide being controlled by SME hoteliers and most of them still on legacy or no systems, there is an urgent need for these businesses to organise themselves, with the ability to connect their real-time inventory to online demand generators. This is where Hotelogix came in.
The first hotel the team on-boarded was Faros Suites in Greece, who has been a part of Hotelogix from the beginning. Angelo Tselentis the owner, says that the Hotelogix system has breadth and depth. He says all the platforms they tried previously proved to be difficult to learn and master. “We found Hotelogix one afternoon while searching the Web, and I realised I was onto something. The system offers many smart features, which are essential for a small property,” he says.
In the past year, Hotelogix has signed up multiple group/chain properties largely from India, South East Asia and Europe. Some of these include Treebo Hotels, Fab Hotels, Peppermint Group in India; Bespoke Hotels from UK; and Bahamago in the Caribbean.
“Hotelogix has forged multiple alliances with companies from India, Europe, and North America and that has helped in scaling up our brand and customer base. These alliances include HotelRunner from Turkey; Maximojo and Reznext from India; and BusyRooms from Europe. TripAdvisor and Seekda from North America and many more are in the pipeline,” adds Aditya.
For a premium plan, the team charges $4 per room per month, and this plan helps the owner get tools to run the operations of the hotel. As part of the enterprise plan, they get tools to run operations along with other tools to connect to different online markets. This costs $6 per room per month. The team claims that, on an average, they generate $1,500 per property in a year. There are various add-ons that a property can subscribe to, which can help to get revenue up 4x. According to Hotelogix’s RoC filing, the total revenues in 2015 were Rs. 36,900,773.
The team has found that, with time, hoteliers have started using different tools to improve productivity, go-to-market, and customer management. These tools work in conjunction with the PMS, and were used only by five star hotels.
Aditya adds that there are multiple things that go into building a SaaS platform, especially a vertical one. These include ease of use and ensuring the platform could be sold and marketed offline.
Mark Shemel, Owner THINK Properties, New York and Miami, US, has been a Hotelogix customer for four years. He says that the platform has saved 75 per cent of their time.
Suresh Shanmugham, Managing Partner and Co-founder Saama Capital says that the market opportunity for Hotelogix as a product is massive. He adds that a great global product coming out of India, with a capital-efficient business model was something that attracted them as investors.
“When the team came to us, they were already present in 85 countries, and had a fairly significant reach before us investing in them. And all of this without having physical presence there. Prabhash brought in a strong technical engineering experience and Aditya brought the product and business experience, which was the perfect mix,” adds Suresh.