HotelTonight is all about two things: mobile and last minute bookings. HotelTonight is a mobile app that allows users to buy last-minute rooms at discounted rates. Hotels benefit from selling excess inventory at the last minute while users get a great deal making the exchange mutually beneficial. HT preaches “plan less, live more” and give their users the tools to live spontaneously while helping hotels sell their unused rooms.
HotelTonight only allows a fixed number of listings a day, so not everyone makes the cut. In an effort to maintain the best user-experience, hotels compete against one another to be listed every day. This incentivizes hoteliers to offer a good deal and treat HotelTonight guests well.
The HT platform has become quite popular over the last few years while catering to an entirely new type of customer. The mobile app entered the market to solve the spontaneous traveler’s needs. Traditional OTAs are great for pre-planned vacations, but before HotelTonight, there wasn’t a platform dedicated to last-minute bookings. After a few years in business, their idea has adequately served this new market. As of 2014, HotelTonight has raised almost $81 million, employs 200 people, have listed over 15,000 hotels in 36 countries and created hundreds of millions of dollars in bookings. Pretty impressive (source).
In the company’s early years, a user could only book a hotel a night or two in advance. But today, prospective guests can book up to 7 days ahead, allowing for more planning. HotelTonight allows for hotels to sell their unused inventory at a discounted without affecting other marketing channels. HotelTonight is mobile-first, so customers who are already brand loyal won’t see the promotional pricing on the property’s website.
New listings are released every morning based on available rooms. Depending upon daily activity, hotels can change their rates during the day to sell available rooms. HT’s new proximity-based pricing tempts users who might not otherwise book by targeting them based on location. Georates show up to users who are in a designated location where people may be looking to book a spontaneous trip. HotelTonight’s CEO, Sam Shank, believes that travelers who value price and flexibility over the certainty of where they are staying will find their price point on HT (source).
HotelTonight chooses which rooms to list based on the value offered and the type of property. In an effort to provide users with quick information about the hotel beyond star ratings, they created their own rating system to describe what the guest can expect in a hotel. It looks like this:
In order to maintain a balance, HotelTonight will choose to list a property based on these categorizations to serve the entire market. They individually approve every listing to ensure quality. If HotelTonight receives enough negative feedback from any property, the hotel will no longer be able to list on their platform.
HotelTonight is highly curated and the result is a target market that allows a property more visibility. Unlike other OTAs, HotelTonight’s listings are not buried among hundreds of listings.
A hotelier manages their HotelTonight listings through their extranet HTx. The tool helps hoteliers easily manage their listings and offers tips on how to sell more inventory.
Skift interviewed hoteliers familiar with HotelTonight and many of them are happy with their experiences. Kim Nugent warns that hotels shouldn’t expect to sell high volumes of rooms every night, but extra inventory at the last minute is what works for her hotel.
Skift’s findings show the HotelTonight works as an additional channel in an established marketing strategy.
HotelTonight now also pre-purchases inventory when they know inventory will be strained, such as when there is a large event in town. So even when there would not be extra rooms available, HotelTonight can still serve the last-minute traveler.
However, Skift also pointed out that HotelTonight is not for everyone. There are legality issues when it comes to franchises offering excess inventory on sites such as HT. Even more, a distribution manager was quoted saying that many hotels are not interested in raising occupancy rates by single-digit percentage points.
HotelTonight has seen many copycat companies pop-up as a result of their success, according to TechCrunch. Even booking.com released their own last minute booking mobile application in January 2015, showing that even the traditional OTAs want a piece of the new market.
HotelTonight also competes with daily deal websites like Groupon, Living Social, and Travel Zoo. For more information on how to price your hotel property, check our previous blog post on pricing strategies.
If you are a hotelier interested in selling last-minute vacant rooms, HotelTonight is definitely worth a shot. Although the platform does not work like a traditional OTA, its last-minute, mobile-focused traveler market is readily available on HotelTonight.
Explore their website and join the HotelTonight platform here.