• 13 December 2018
Getting into the Hotel Business

Getting into the Hotel Business

getting into hotels 2.0

Hotelintel.co recently talked to three gentlemen who have successfully entered the hotel industry with their highly innovative and unique inventions. We asked how they got the ball rolling and discussed what lies in store for their products in 2015. Carl Rubin is the Vice President, Business Development of Fingi Inc. – an integrated platform which allows hotel guests to optimize their stay via their smartphones; Christian Mischler is the Co-Founder, COO and CMO at HotelQuickly – an app providing dynamic last minute hotel deals in Asia, and Blake Dinkin is the Founder of Black Ivory Coffee – a rare and expensive brand of coffee naturally refined by elephants.

What are the challenges you have encountered in entering the hotel world?

Carl Rubin: Getting buy-in from hotels for new technology is quite challenging. They have a multitude of legacy systems that require integration. There’s a bifurcation of decision making between owners and operators. Large multi-national operators have layers of management at the regional and headquarters levels that must be negotiated. And as an industry, hoteliers adopt new technology more slowly, as they are in a hypercompetitive vertical facing instant and very public feedback from guests via social media if that technology does not meet expectations.

Christian Mischler: Initially we had difficulties to engage with new hotels as we were a new and unknown player; once we were live and customers were starting to use us and refer to us when booking hotels, it became much easier. We are a very different concept from Online Travel Agents (OTAs), and initially hotels and OTAs felt like we would compete directly. Hotels now understand that we are complementary and work with us as an additional channel to target the niche of last-minute travelers who rely on HotelQuickly for their booking needs.

Blake Dinkin: Actually I found it pretty easy getting into it because the first hotel group I worked with, Minor International, were very open minded and supportive so they opened many doors for me to the various Anantara locations. This helped me to branch out into other hotel brands. The big challenges came later when I discovered that the biggest potential bottleneck was with the servers, who were initially slightly intimidated because the coffee requires a manual grinder and brewer. Plus it is a product with a story so it really needs staff who are outgoing and not afraid to talk to guests. Culture and geographic location has had a much greater influence than I had expected.

How did you get through those challenges?

CR: First, by providing a rock solid product offering that’s innovative, performs consistently, has a functionality upgrade path and meets the demands of today’s travelers. Second, by being consistent in our message to hoteliers that the product will provide them with a competitive advantage today, and will be a competitive necessity tomorrow. And third, by realizing that in this market sector you are talking marathon, not sprint. You must take the long view to gain adoption.

CM: Provide the best last-minute deals through an industry-leading mobile application into the hands of the traveler on the go – this is a very clear value proposition for both travelers and hotels. Our value proposition is very straightforward and resonated well across Asia – the best last-minute deals, in the best 3-5* hotels, always cheaper than anywhere else.

BD: Different training techniques for staff, regular follow-up, and now I have created a Black Ivory Coffee menu which can be handed to guests and takes a lot of the stress off the servers. It is presently in English but it will soon be translated into other languages such as Japanese, Chinese and Russian.

Who are your target markets?

CR: All hotels, whether they be the majors or the independents. We aim to be a standard mobile interface between hotels and their guests worldwide. Roughly speaking, the majors control approximately 35% of the worldwide market, and we have a strategy for them which allows them to develop their own app with their own look and feel which imports functionality from Fingi that would be inefficient for them to develop and maintain. For the remaining 65% of the market that comprises smaller, independent groups, we offer a comprehensive mobile app at attractive pricing far below what it would cost them to develop and maintain themselves.

CM: On the one hand we’re targeting the mobile last-minute traveler with a free mobile application for iPhone, Android and BlackBerry. On the other hand we’re helping the best hotels to become even more relevant, tap into an underserved market (last-minute travel) and stand out from the average. We only work with the best 3-5* hotels and we help them optimize room revenue and occupancy. Our users are only looking for last minute accommodation, while Revenue Managers often face the challenge that they cannot sell this allotment through traditional channels.

BD: Open-minded, adventurous, educated 30-65 year-olds who are affluent enough to stay in top five-star hotels. My target audience also includes food and wine lovers and people who just want a great experience and a story that they can go home and share with their friends, colleagues and loved ones

How do you see your company in the next 5 years?

CR: We think there will be a small number of winners in this space and we’d like to be first amongst them. Of course there will be competitors and we welcome them as they enhance awareness and increase the size of the pie.

CM: Asia has a lot of challenges that Western countries don’t have. Without full localization, a thorough understanding of the markets and presence on the ground, it is nearly impossible to be successful. We will continue to focus on our niche and by constant interaction with our end-customers and hotels, our product will become more and more relevant and useful.

BD: In five years I am sure there will have been attempts to copy me. It took me 10 years to develop Black Ivory Coffee and it is not so simple as giving some coffee beans to an elephant, so if someone else really wants to do this in an authentic way, they will have a very tough time. That said, I believe in five years I will be in the top hotels and restaurants so I believe I will be in a very strong position from a marketing and sales perspective. As for other animals, I have worked with food scientists in Canada and Africa and looked at giraffes, zebras, rhinos, cows, monkeys, dogs, goats, etc., and when it comes to safety, digestive system, accessibility, image, cleanliness, dental structure and size, an elephant cannot be beat.

What is the advice you would give someone who is entering the market to sell their product/service to hotels?

CR: Prepare for the long haul. There are no instant successes in hotel technology sales.

CM: There are powerful global players dominating different aspects of the hospitality industry and a ton of smaller players fighting over what’s left. If you want to be successful and stand out, be different. Create something new, challenge existing practices. Don’t try to disrupt the entire industry, but be innovative and address the problems of hoteliers differently. Think out of the box.

BD: It takes longer than you think but a “no” today does not mean “no” for tomorrow. Conversely, having formed some great relationships with General Managers and Food and Beverage Directors/Managers, they have then taken my product with them when they moved on to their next role in a different hotel so I think it pays to maintain existing relationships and not just focus on growth with new hotels. In fact, my emphasis is on existing hotels first and then on new business. I am in this for the long term. I love what I do and I did not develop this only to sell the business in a year or two. If I won the lottery tomorrow I would still be doing what I am doing (albeit with less financial pressure).

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