HotelBids - a hotel aggregation platform where consumers don’t search, but the search comes to them
Two decades ago, when the concept of the online travel agency (OTA) was introduced, the purpose was to provide two-way solutions to both hoteliers and consumers.
For hoteliers, OTAs offered online visibility, flexibility in rates and seasons, and no fixed fee, among other facilities. In a nutshell, the adoption of OTAs proved to be a great showcase for hoteliers’ businesses, resulting in increased sale. For consumers, it was an opportunity to find hotels at a single place and the liberty to choose accordingly.
However, the solutions introduced for hoteliers have become a thing of the past.
Inder Sharma, founder of Hotel.com, a US-based OTA platform that was acquired by Expedia, says online visibility on OTAs is an expensive business now. It comes with a high cost. The rate flexibility is under special conditions that guarantee income for the agency. Though the concept of “no fixed fee” still exists, the commission percentage has increased exponentially.
So OTAs are wringing the business of hoteliers dry as the former have been able to create a monopoly in the market.
Inder, a serial entrepreneur, observed the problem gripping the hotel industry and decided to introduce a solution that would give back autonomy of the business to hoteliers, end the monopoly of OTAs and retain power of choice for the customer.
However, there was a constraint. Inder had little knowledge of technology. He wanted a co-founder from the IT field who would take care of the technology end of the business.
Then, through friends, he met 41-year-old Aneesh Chopra, an engineering dropout. Though a dropout, he was a master in the field of IT. Aneesh knows more than eight computer languages and has been with the IT industry for 15 years.
In July this year, Inder and Aneesh introduced Hotelbids, a platform that gives consumers the ease to book rooms at their price.
“Until now, customers had to go to various travel sites to hunt for the best price for the same room at the same hotel. Plus, no one site gives consistent rates. At Hotelbids, consumers don’t search, the search comes to them. They just set their price and the specifics desired, the rest comes to them,” says Inder (61), the CEO of the company.
How it works
The platform follows a bidding model. Users need to open the Hotelbids site or app, select a city, date, type of room and the price they want to pay. Their work is done.
Requests go to various hotels and users receive multiple acceptances from hotels. They can now pick the hotel according to their preference.
Business is catching up
According to Inder, around 30 percent of inventory goes unoccupied in the hotel industry. Through his platform, he is offering freedom to hoteliers to rent out inventory at the last minute. There’s no pre-booking of inventory by Hotelbids; hoteliers are the ultimate decision-makers.
“Besides, where other OTAs charge 20-30 percent commission on inventory, our commission is only 10 percent,” says Inder.
Currently, over 2,500 hotels have registered on the platform in 69 cities, Inder claims. He aims to add around 200 hotels every month. The target is to have around 8,000 hotels on board by the end of 2017.
On the end-consumer side, Hotelbids is receiving a good response. It gets around 200 booking requests every day. Inder adds that the platform is giving the freedom to consumers to get better options.
Inder is also going international; he plans to launch the platform in the US by January 2017.
According to a report by ICRA, the domestic hotel industry is estimated to touch $1.8 billion by the end of 2016, from $0.8 billion last year.
The growth is expected to come from a rise in online bookings. Hotel bookings is one of the least penetrated segments in travel categories in India. Online bookings accounted for 16 percent of hotel bookings in 2015, and it is expected to grow to 25 percent this year. It is estimated that 8.4 million Indians are likely to book hotels online in 2016, up from 3.5 million in 2014.
With a rise in online bookings, the hotel industry also witnessed the rise of online channels claiming to provide solutions to the industry.
Besides OTAs like Makemytrip, Yatra, Goibibo and Cleartrip, Ixigo, Tripadvisor and Kayak, among others, are the meta search engines that operate like travel discovery platforms.
Further, budget accommodation reservation services like Oyo Rooms, and Wudstay are another key section of the industry. Apart from this, branded hotels are also seen operating direct bookings through their websites.
Experts say the hotel industry in India thrives largely due to growth in tourism and travel. Because of an increase in tourism with rising foreign and domestic visitors, the hotel sector is bound to grow.