Founded during the health crisis of 2020, Hotel Intelligence promises hoteliers to take back control of their distribution and reduce the commissions they pay to digital players in the sector. The 50-person startup, split between Lyon and Morocco, has 200 clients (guesthouses, independent hotels, large chains) and is targeting 1,000 clients by next year. Interview with co-founder Thomas Schmider.
alliance. How did you come up with the idea of launching your startup?
We launched Hotel Intelligence on March 9, 2020, a week before closing. It wasn’t necessarily an easy time to go through this process, especially in the tourism sector.
Another co-founder, Karim Filali, is interested in the product side and has been developing reservation systems for the hotel industry for several years. For my part, I’ve been in the digital world for a long time: I was one of the co-founders of video game publisher Infogrames, then moved to the internet and mobile before looking at how digital technologies could change traditional businesses.
I also founded a sports data analytics startup that I sold in 2015 and became interested in new ways of travel and housing, particularly by investing in traditional hotels or co-living projects. My point is to assert that the Web 2.0 revolution has profoundly transformed business and that non-intermediation that would allow service producers to better expose themselves to the public, ultimately benefiting new players.
Read also: What are the opportunities for tourism after the crisis?
How have hoteliers faced this digital wave?
In the travel and accommodation sector, traditional players have been very quickly replaced by new digital players called OTAs (Online Tourism Agencies). Hotel owners have generally missed out on this digital revolution despite the emergence of many new tools to manage their business. We want to give them back strength against online booking actors.
It must be acknowledged that online booking actors have acted as incredible facilitators in relation to bookings. But hotel owners gradually lost control of their room rates. With the proliferation of packages and sweeping promotions, they ultimately have no idea what price their customers are actually paying.
There is also some form of dependency being created. For example, when a new hotel comes on Booking.com, Booking.com usually places it at the top of the list for the first month. Then algorithms reduce this visibility and gradually, hotels are encouraged to conduct more and more promotions to take full advantage of the platform. Commissions aren’t insignificant either: this is about 17% of sales volume including hotelier tax in France and this can go up to 35% in other countries.
With us, you pay nothing to access our services and the commission is about a third of what will be paid to Booking.com. We adapt to each country and, for example, our commissions in France are around 7%.
What about these giants’ monopoly on hotel data?
These giants, for example, know in real time how many Chinese are booking on their site in a particular tourist area. To set prices, they capture city data and then resell it to hotel owners in those same places. the service we wanted Launched by AirBnB very well. But what creates the problem is the state of monopoly and the fact of generating additional income from historical data of hoteliers.
These technologies are unavoidable, but we still need to find ways to regulate the abuse – like Uber’s monopoly on navigation data. AirBnb has struck a blow in the anthill to democratize other types of vacation. But we must make sure that this is fair in terms of taxes or security costs that are currently burdening hotels.
I am not “against booking” at all. My role is simply to help hoteliers perfect their digital distribution. It is a support and advice service for both of them learning how to improve their presence on booking platforms but also for developing direct booking through their website.
Read also: 7 digital solutions to revive tourism
What do you suggest to bring them back the force?
You need a multi-channel strategy and don’t just rely on OTAs because bookings are made directly without commission. These are important details and you will have a much better chance of retaining your customers and promoting repeat. If internet users prefer booking, it is because they are looking for the best deal. So I often remind hoteliers that you should develop a business website and not just a marketing website.
That’s why we’ve developed tools to help hoteliers have a more efficient website. The artificial intelligence behind our price checker is able to reproduce the experience of customers of multiple nationalities on booking to better understand their habits depending on the region they are in. The site is natively provided in 41 different languages to boost your SEO on Google.
In addition, we have also developed a price matching system to generate rates dynamically and instantly by aligning with the market room rate policy. There are some psychological barriers to overcome for all hoteliers to get started, but they clearly simply cannot do the job in real time.
How can you improve your visibility with hoteliers?
The idea is to first establish physical contact because it is necessary to reassure the hoteliers. In general, when we approach hoteliers and explain to them the need to restore power, they listen to us. But the vast majority remain very cautious about the sequel because they have already seen many solutions that claim to solve this problem without changing the situation in the end. We are the only solution that truly and significantly creates direct booking?
It has now raised over 3 million euros in investment, including 1 million in innovation loans from Bpifrance… What is this money used for?
It was first necessary to develop a high-performance technical solution. With this solution, the goal, before March 2020, was to attack the whole world but due to the health crisis we had to tighten our goals by focusing first on France, Morocco and Tunisia. And recently, we are interested in Spain, Italy and the United Arab Emirates. We have already established links with more than 250 hotels around the world and aim to reach 1,000 by next year.
Since the lifting of containment we find real growth figures and we should reach 1 million euros to book this month. At the same time, we are preparing to raise between 3 and 5 million euros by September to recruit more salespeople and accelerate our expansion in the mentioned countries.