Need a hotel tonight? HotelTonight is your answer!

Who are you?

Hey, I'm Sam Schenk of HotelTonight Hotel tonight.

Well, that sort of hints what we're talking about hotels.

We don't have to explain what we do very often. So we book hotels for tonight. We sell distressed inventory that the hotels wouldn't otherwise sell at a deal through our mobile app and make it really convenient and simple to book.

What do you mean by distressed inventory?

Distressed inventory? Yeah, it's rooms that would otherwise not sell. So distressed would be one word or just available. Inventory would be maybe a better way to say it. There are regular rooms that you would get if you booked through the hotel website or booked in advance. We're giving you the same access to the same same rooms. And in fact, sometimes users get upgraded when they check in because if there's a suite that's available, might as well put somebody in it so they can have an extra good experience.

Does this work? What, only in the United States or worldwide or what?

So we launched in the United States. We launched about 18 months ago here in New York, San Francisco and LA. We've added about 45 cities in the US since then, adding about a city every two weeks. And then we just launched a London office about a month ago. And we opened in London right in time for the Olympics. And we've got a lot of great inventory right now during the Olympics and we'll be using that to expand throughout Europe. But we've got our eyes on cool. Because international domination and worldwide domination.

I just found out I might be at the closing ceremonies. I don't have a hotel yet.

Well, now you do.

Now your shtick is hotel tonight. How far in advance can I buy a hotel room? So like next weekend I might be in London. Can I do that? Or do I have to wait until next weekend where I'm stuck in?

We focus on on demand hotels for that last minute need. So when you find yourself somewhere you didn't expect to be and you have to get a place to stay, the other half of the. So that's about half of the people that book through hotel tonight. The other half are people that realize that hey, there's a great deal, it's really convenient to book. I was gonna go home or I was gonna stay at home, but because of the convenience of hotel tonight and the value of these great hotels are providing, I'm gonna stay in a hotel. So we're growing the market that way. And we call those impulse bookers. It's a really interesting part of the market.

I bet you have two different common use cases. Right. One is the frequent traveler who got stuck in Chicago because there's a big snowstorm and has to find a hotel near the airport because they ain't taking off. And the other use case is, you know, you go to San Francisco, you go out to dinner, you start drinking a little bit and you go, oh shit, I can't drive home now. Either I have to pay $100 for a taxi fee ride home, or let's look around for a place to stay tonight and sleep it off.

Yeah, you got it. Those are very specific use cases. Of the two broad contingencies that we serve, the people that have to find a place to stay tonight and the people who want to find a place to stay tonight because they can turn sort of an average night into one of the best nights of the year.

Yep. So what's the magic sauce? What do you do that I can't do on other hotel booking services, you know, like hipmunk or whatnot?

Yeah. So one of the main things that we do is that you might show it to me. Yeah, let's take a look. So let's look at Chicago right now. One of the main differences you'll see as you get into hotel tonight is that we only show a small selection of hotels. So in Chicago, there's three hotels right now. In return for that, what you get is great hotels that we personally vetted. So we personally curated this list of hotels and inspected them to make sure that they're of high standards. So you don't have to do a lot of research, you don't have to go through a huge list of hotels. And then we also provide exclusive deals for this inventory. So the hotels are competing for these three spots any night. In Chicago we might have 20, 25 hotels that are providing us inventory. The system on the back end has these hotels sort of compete for these spots, compete for that shelf space. So only the three best deals will show up on the app. One of the other differences you'll see is that the merchandising and the sort of the photo quality of how we portray these hotels is very high end. We actually send our own photographers there. You can get a real feel for what the mood of the hotel is like, what it looks like with people there. We write our own content about the hotel and stuff that's really important for the last minute traveler. Stuff like how late room service is open, how late the bar is open, does the hotel have a minibar? Things that are very practical and useful when you're checking in at the last minute. And then probably the most novel element of what we've done and what we built from the ground up for was to be able to do really quick hotel bookings. So you can book a hotel in eight seconds. That's from opening the app until you get your purchase confirmation. You can check in right after that and be in your room in just a few minutes. So at the last minute. And in mobile we think it's about speed, it's about efficiency, it's about getting out of the app and on with the rest of what you were doing or into your hotel room or on with your night or evening. And that eight second booking is really important as a differentiator for us.

How do you do it so fast?

Well, we save the payment information, we save the profile information. So I'm going to switch over to our. I don't actually need a hotel tonight. So I'm going to switch over to our development account here. I'm going to show you how quickly it works. Let's go to same in Atlantic City and I wanted to book a resorts Atlantic City hotel. Book a room. All my pavement information here is saved. Review the purchase.

The WI fi here sucks.

And can I blame it on your WI fi? We have this one last screen which is sort of a captcha to make sure that people really want to book the hotel. We found that people were booking accidentally because we didn't add this screen. So we added one more screen and you trace the hbed logo and you're ready to check in right after this. So on a fast WI FI connection, this works in sub 10 seconds. Yep, here we go. Now we're good to go.

Cool. That's awesome. Very fast. Do you do a hookup to Uber? So a cab picks me up and no logical connection.

Yeah.

They'Re not in every city you are yet.

No, no, but we do share an.

Overlap and Lyft here in San Francisco there's Lyft and Uber and in London there's Helio. Yeah, hello. Yeah. So there's lots of ways to get to the hotel with other apps, but I just interviewed the CEO of Lyft which is building out here in San Francisco. A lot of fun.

Yeah, that's a great space and we share a lot of mutual love for each other other's businesses. So it'd be great to work together on that logistics of how do you get to the hotel, how do you.

Guys get paid for this?

So we take a commission from the hotel room. It's about 20% that's industry standard. We're not doing anything different. There's no cost to the user. And from a hotel perspective, again, it's incremental bookings is what they're seeing. So that 20% is a very reasonable amount for a room that would otherwise go unsold.

No, that's true. Because when you rent a hotel, if that room goes unsold, they get nothing, right?

That's right.

And here you're helping them fill a bed, a room at the last minute which would have gone otherwise empty, and that helps them pay their staff.

Yeah, that's that perishable inventory problem that we can solve for that hotel.

Can you use this model for other things or is hotels pretty much the only model that it would work for?

Well, it's a little hard with the name hotel tonight to do much more.

No, no, but you could take the code and make another stick, you know, another app for other contexts.

We've learned a lot about, you know, how to work with perishable inventory, how to match that with consumers that would otherwise not purchase anything at the last minute through mobile devices. So that's something that we have within the repertoire of where we can go next. So we haven't decided. We don't make long term plans as a business or sort of a last minute hotel provider in general. So that's in our DNA. But we have a lot of directions that we can go.

Yeah, you got good ratings on the itunes store. What's the secret to doing that?

You know, we worked on it very hard. So when we launched, we didn't have good, good ratings or as good as we wanted. We were, you know, I think 3.9 or something. And we made it a goal of the company to increase our ratings. So, you know, one of the big observations that we had is that people aren't just rating the app, they're not rating the code, they're not rating the visual. So that's important. They're rating the entire experience of using hoteltonight and in that sense they're rating their stay. And so for that reason, we only work with great hotels. We monitor guest satisfaction at those hotels through the app. We collect a rating afterwards. And if a hotel isn't good enough, we'll stop working with that hotel. We've stopped working with about 10 hotels that just weren't of the quality that we were looking for. And then we also have our own customer support. They're a really good customer support team that works really hard to make guests satisfied and improve customer satisfaction. There's actually within the app. You can do a live chat with a support operator. So it's something that we pioneered, and we work the support team, because we have them in house, are able to do those things. So because of all of that, I think the guest satisfaction ratings of the entire stay and the entire experience is higher than you would find on a typical hotel booking experience. Awesome.

It's a free app. You get it just by searching for Hotel tonight in the iTunes store.

That's right.

Anything else we need to know about it?

We're adding more cities all the time, so if you don't see where you want to stay tonight, check back in a few weeks or a few months and Azar will have it.

Very cool. Thank you so much.

There you go. Hotel Tonight.

Sam.