Not all hotels are created equal. That’s why paying $150 for a night at one hotel might be a rip off, but it could be a great deal somewhere else — and that, in turn, is why DealAngel is launching a new way to search for hotels.
When you go to the DealAngel site and select your dates, it provides a list of hotels and prices for your trip. Each of those rooms is assigned a “value” score — basically, how the offered price compares to the expected market rate for the room. If a room on a given night would normally cost $300, and instead it’s priced at $150, that’s a great value — but you might not see that if you’re searching purely based on price.
That “market rate” estimate for the room is based on pricing data from both that hotel and surrounding locations — in fact, DealAngel says its algorithm looks at millions of data points across the Web. Co-founders Roman Peskin (the CEO) and Bob Rogers (the COO) bring different kinds of industry experience to the table — Peskin managed revenue at a group of hotels in Prague, while Rogers worked at Expedia. Peskin says that with their experience, and the technology they’ve developed, searching for hotel rooms on DealAngel is like playing the slot machines in Vegas while the slot machine maker looks over your shoulder and gives you advice.
The real question, ultimately, is: How much do consumers care? If you find a cheap, decent hotel, do you really care if it’s a great “value”? Conversely, are you going to want to stay at a hotel that costs $50 more per night because of that value?
“Who doesn’t like staying in a five-star hotel for the price of a three-star hotel?” Peskin counters.
He also points to the success of companies like Groupon as a sign that people aren’t just looking for the lowest price, but also the best deal. (And even though there are hotel deals on Groupon, Peskin says it can be a challenge to apply those deals to the dates you want — not a problem at DealAngel, where you’re reserving a room for a specific night.)
Peskin and Rogers first built a market intelligence product for hotels, but they decided that they had a bigger opportunity turning that technology into a consumer product. DealAngel is launching this week at DEMO, the technology conference co-produced by VentureBeat (my old employer). The company has raised a seed round of less than $500,000 from Foresight Ventures.