“The hospitality industry is about twenty years behind in technology,” says Leon Vaidman, CEO of Mindspace-based HotelsBI. “Look at online platforms like Expedia, and Bookings.com – they totally changed the distribution system,” and as a result, hotels got left behind.
His co-founder and CTO Lior Shafir, echoes these concerns. “Booking systems have state of the art technological solutions that hotels themselves, do not,” he says. This gives rise to an inferiority and dependency in the hospitality industry of hotels to booking platforms: Hotels have become dependent on booking sites to reach high occupancy and determine rates, and as such lose profit to fees which must be paid to the bookings site in exchange for their accessibility to the consumer pool.
Vaidman (left) and Shafir, on their Tel Aviv office. Spent about a year learning the business
“About 20% of any booking made through a booking site goes to the site, rather than to the hotel,” says Vaidman. “Consider if hotels had the ability to sell directly to the consumer, without paying commission,” he poses, “They’d be able to sell you rooms at a much lower price.” But to be able to do that, they need proper tools – technological tools –that would be able to analyze high volumes of data, collect information about guests, and build targeted and efficient loyalty programs that could compete with the giants like Bookings.com and Expedia.
Shafir and Vaidman realized that many hotels lacked both the resources and skills required to build such complex analysis tools independently. So they set out to do it themselves, coming together to form HotelsBI in early 2016.
The duo spent about a year learning the business and formulating their product. They had an idea, but it still needed development. Neither had a professional background in hospitality – Vaidman worked in business development and dabbled slightly in the industry, while Shafir worked in software development for over 15 years. Their turning point came in the Spring of 2016, when they attended the ITB Conference, the world’s leading travel trade show, in Berlin. There – they realized what the market truly needed, and got to work on a pilot for HotelsBI.
Let us backtrack for a moment, and discuss BI (Business Intelligence) as a discipline, before delving into its application under the HotelsBI framework. BI refers to the practice of using software applications to analyze an organization’s raw data – it involves data mining, analytical processing, and querying that then gives rise to valuable insights. “At times, the awareness for BI is not so obvious,” say Vaidman and Shafir, explaining how oftentimes hoteliers lack the expertise to implement such data-heavy technologies. HotelsBI fills that gap.
The platform aggregates data from guest profiles, hotel management systems, online travel agencies (OTA’s), benchmark systems (which compares ones standing to that of competitors), hotel social media pages, Trip Advisor, and more, and presents it on a user-friendly Google Analytics like platform. The inputs presented on the interface are highly customizable and tailor-made on a per-hotel basis. “We know how to give every hotel its tailored solution and report,” says Shafir. “Luxury hotels focus more on guest experience,” he says, drawing on a major difference between hotel chains. “While city hotels care more about occupancy.” So while insights for luxury hotels may focus more on customer loyalty, retainment, and engagement, for city hotels, the focus would shift to increasing occupancy.
HotelsBI uses observed data to collect valuable insight that could be used to forecast demand, stimulate further reservations, or help any hotel chain achieve whichever goal or KPI they place at the top of their priority list. “We wanted to create a one-stop shop,” says Shafir.
Take an example: “The biggest concern is how to collect guest contact information, because that often comes from OTA’s,” says Shafir. “Notice how hotels always ask for your e-mail rather than your name [upon check-in],” he says, explaining how hotels often lack the information collected by the OTA’s – creating a gap in the hotel database. HotelsBI helps close this gap. Viadman describes a pilot launched in one hotel chain, in which, in order to spur further customer engagement, a Wi-Fi network was installed that required customers to fill in personal information in order to access a more high-speed internet. Customers were thus incentivized, unknowingly, to provide their contact information and, in turn, complete the hotel’s incomplete database.
Viadman describes another instant where valuable insight was provided based on data observations to a Moscow based hotel in which the HotelsBI system was deployed. “At some point in September, our system noticed a huge demand for the hotel on a specific day – most of it by the public sector,” he says. Often, high occupancy rates are indicative of some sort of event or conference in the city, “but there was no event in the city.” He describes how HotelsBI alarmed the hotel to pay attention to the spike in demand and try to place its source. Further investigation revealed that the specific hotel was located 100 meters away from a synagogue – a prime location for Jews on Yom Kippur. This newfound correlation between Yom Kippur and increased demand provided valuable insight for the specific hotel, which was then able to anticipate and increase its rates for the same occasion in following years.
“We feel a huge demand for our product,” says Vaidman. In under a year, the company has deployed its program in over twenty cities throughout Europe and Asia, in both independent and chain hotels. They’ve grown from a two-man team with a desk at Mindspace’s open space, to a five-person team with a private office fit for four, and will soon move again to a larger private office at Mindspace.
“We recently had a deployment in Germany, for 10 hotels that were headquartered in Berlin,” Shafir says. In such a situation, being a Mindspace member proved to be surprisingly advantageous to the duo, giving rise to a chance encounter and investment. “We e-mailed Adi Klein (Tel Aviv based community manager), and she told us to go work out of Mindspace Berlin. So we did” – in place of going to a coffee shop. There, the duo met Mindspace Berlin-based Edison VC, who chose to invest funds in the promising startup. The lesson? Being a Mindspace member transcends international borders!
This year, catch HotelsBI presenting at (rather than just attending) ITB.
For more information on HotelsBI, visit http://www.hotelsbi.com