A new travel technology company called HotelsByDay wants to offer a new option for those looking for a place to work or unwind during their trips, when they don’t need to book a full overnight stay at a hotel. As you may have guessed by the name, the company is attempting to break open a new category in lodging: hotel rooms you can book by the day, for roughly 40 percent less than the nightly rate.
The service is available now on mobile, with apps for iOS and Android, allowing travelers to access rooms in around 40 hotels, mainly in New York and Chicago to start. However, there are 60 other hotels that are already committed to bring their properties on board in the near future. The service is also adding other cities, too, including Philadelphia this week, and in March, Miami, L.A., Boston and Atlanta.
Says co-founder and CEO Yannis Moati, the goal is to offer around 120 hotels via the app over the course of the next three months.
Moati, a former tour operator, came up with the idea for HotelsByDay, after coming across a similar, but low-tech model being used in parts of Europe to sell unused inventory. He co-founded the company in June of last year along with entrepreneur Nathan Stevenson, and booking-engine expert Brian Dass, who earlier founded online hospitality marketing firms Timeless Hospitality (acquired by TravelClick) and Open Hospitality (acquired by Pegasus Solutions).
The HotelsByDay mobile apps themselves are designed to be simple to use – and something travelers can access spur-of-the moment, too. Upon first launch, you simply pick a date (today, tomorrow or you can select your own), then see available rooms and pricing. If you find one you like, you can then book the room right in the app.
“If you’re in the city and you have time to kill or your schedule has changed, and you don’t want to work at Starbucks for three or four hours – what would you rather do than book a hotel?,” says Moati. “We want the experience for the consumer to be very quick…like same-day booking.”
On the hotels’ side, a management portal allows them to offer up select inventory and set pricing. HotelsByDay is also soon connecting with a channel manager that has access to over 400 national hotels to help it increase its inventory, the founder notes.
Prices for rooms booked by day are not as dynamic as overnight stays, and during some early testing over the past couple of weeks, the company found that travelers were booking stays that averaged five hours and cost around $110 plus tax in New York and Chicago. HotelsByDay works on a performance-based commission model, taking around a 15 percent cut of rooms sold to start.
Moati believes the service will appeal in particular to younger users, and especially millennial travelers, who are looking for convenience and don’t always need a 24-hour stay every time they’re in the city.
“Their schedule doesn’t necessarily fit that…but they would like to book something that fits their time – something that fits in between meetings, to refresh before a meeting, or to get ready for a flight that leaves later in the day,” he says.
The biggest challenge for HotelsByDay, beyond educating the market that something like this even exists, is getting hotels to add their inventory. There’s a bit of labor involved in that today, which is why the company is starting by asking them to simply commit the lowest number of rooms possible per day – two or three, for example – in order to try out the system.