Stayful, a new US-based boutique hotel room bidding platform, will launch in the UK before the end of the year, Boutique Hotelier can reveal.
Having received $2.4 million funding led by Canaan Partners, Stayful has already launched a beta site featuring independent boutique hotels in New York and San Francisco, with plans to expand into Los Angeles, Miami and Chicago soon.
Co-founder and CEO Cheryl Rosner, former president of Expedia Corporate Travel and Hotels.com, said the site enables hoteliers to sell off perishable inventory, adding that $13.9 billion is lost annually by the independent boutique hotel industry due to unsold rooms.
Research into the boutique hotel market in Europe revealed a number of issues, Rosner told Boutique Hotelier: “The first is perishable inventory and lost revenue due to unsold rooms; the second is cost of distribution and that includes marketing costs; and the third issue is consumer awareness. There was a fourth issue in London in particular, which was just the economy but people are starting to see resurgence now.
“Our development ponds are led by our hotels. So we’ve already had a rush of hotels reach out to us asking us to come to their market. We are going to London and Paris before the end of the year and right now we’re slated to do that in Q4, and so we will be in five markets when we come out of our beta and 15 markets by the year end,” Rosner added.
She said the group would establish the platform in London before looking to expand it into other UK cities.
HOW IT WORKS
Stayful users are able to search the hotels that have available rooms within the next 30 days and make a bid of what they would like to pay. Stayful uses an exclusive algorithm to predict supply and demand patterns and suggest bid prices that are often below the going market rate, but still likely for the hotel to accept.
Once a potential customer offers a bid to a specific hotel, the hotel is invited to accept that bid or counteroffer, keeping the price low yet fair for both sides of the booking process. If the hotel is busy, it may decline the offer and the customer can still book at the published price.
“Something interesting we’ve seen is that for one neighbourhood our algorithm was returning bid prices that were the same as the retail published rates — showing that the demand was high for that neighbourhood, but a neighbourhood that was half a mile away was coming in with 20-30% discount. So that really gives consumer guidance. If they want to stay in that particular neighbourhood it tells them it’s busy so rates won’t be negotiated and they might as well book at the published price. But if they’re open to a nearby neighbourhood they can get better value,” said Rosner.
Furthermore, travellers can search for boutique hotels that are not already part of the Stayful network. Once they place a bid, that hotel is invited to join Stayful.
“We are a low-cost model so when the consumer makes a booking through our bid path it’s a non-refundable, none cancellable booking that is paid for in advance and we take a 10% fee off the top immediately and then pay the hotel immediately. We have a standard 10% commission for retail at published rates,” she explained.