A few weeks ago Paul Carr and I had one of our many bitch sessions about the woeful state of the online travel industry– particularly as it pertains to hotels. My dream company was one that gave you an envelope of essentials upon arrival in a new country– things like a local burner phone with your hotel number programmed in, a metro card and small local bills for tipping. Paul’s dream company was a place where you could book very last minute hotel rooms all for one set price.
Hotel Tonight is almost Paul’s dream company. In fact, I like it better. It quietly launched on the iPhone and is a simple way to do just what the name says, book a bargin hotel at the last minute for one night. So far it is live in New York, San Francisco and Los Angeles and groups its hotels into three categories: Hip, elegant or basic. I was hard pressed to come up with a hotel that didn’t fit in one of those three categories– and they’re so much clearer than “luxury” which everyone in the hotel industry throws around but few truly posses.
Because it’s a last minute buy and it’s only for one night, you can get some great deals– roughly what you’d get on Priceline or HotWire, and you get to see the names before booking. Right now there are more than fifty hotels in the system and some current deals include $159/night at Ace NYC, San Francisco’s Nikko for $120 a night, and the Thompson Beverly Hills in Hollywood for $149 a night.
Hotel Tonight was incubated in a company called DealBase, a competitor to Kayak. Hotel Tonight founder CEO Sam Shank originally was just looking to build an iPhone version for the site. But he found for it to really utilize the mobile medium, he needed something built from the ground up in a different way– even building a new backend system. Interestingly Hotel Tonight isn’t much of an aggregator, it’s a throwback to the online travel agents that aggregators like Kayak and DealBase disrupted.
Hotel Tonight doesn’t flood you with information, rather it gives you the basics you’d need to know when you are headed to a hotel for the night. Things like whether it offers roomservice and how much the cheeseburger is, or whether there’s a mini-bar and what’s in it. (Too pricey and you might run by an In-and-Out and a liquor store on the way.) Staff members have stayed in all the hotels and written the simple editorial content themselves.
Shank has measured that it takes 80 taps the first time you set up an account and book a room, versus 300 taps for a computer-based online travel agency. On a second visit it takes just four taps and under ten seconds, versus 100 taps for a computer-based online travel agency.
The most obvious question is how many people want to book a hotel at the last minute, but Priceline says it’s a whopping 80% of their bookings. Shank expects more staycations and last minute local hotel purhcases, say if your in-laws are driving you nuts or you’ve had too much to drink at that Holiday party. Just like other iPhone apps have convinced people it’s ok to be spontaeous with entertainment and dining, he’s hoping the app will encourage people to be more spontaneous travelers.
Of course, for that to happen Hotel Tonight has to have very solid inventory and always have good deals in stock for every city in which it operates. If someone gets burned once at the last minute and has to scramble for a place to sleep, they won’t want to rely on the service again.
What would worry me more is how much money and time it’ll take Hotel Tonight to expand to a meaningful enough number of cities to make it a popular, well-known default app when someone needs a good deal at the last minute. I can think of a hundred times in the last year I would have used this service, but none of the examples were in New York, San Francisco or LA. Like OpenTable or Yelp learned, building local network effects can be a long slog. But I love to see anyone solving the hotel market with more than aggregation and crowd sourcing.