On Tuesday evening, HotelTonight Market Manager Beatriz Ruiperez revealed via Twitter that the last minute hotel booking app was about to launch in a new market in Latin America. She was coy as to where, but most assumed the company, which has already landed in Mexico, would be rolling out into another of the big gun regional markets, à la Colombia or Brazil. As it turns out, however, that’s not the case.
So what’s HotelTonight’s latest landing pad? Costa Rica. And while it may not seem to be the most obvious locale, dig a little deeper, and it makes a lot of sense.
“Whenever we launch a new country, at the beginning, a lot of the traffic, as you might expect, is from our other countries that we’re already established in, people who are traveling to that new country rather than locals who are traveling around. It takes a little while for us to establish ourselves to locals,” explained Jared Simon, COO of HotelTonight, in a phone interview yesterday afternoon. “And there is a ton of U.S. travel to Costa Rica, it’s a great vacation destination for people here, so there’s already that flow of travel into Costa Rica. So, from that perspective, it’s a logical next step for us.”
Another factor: interest. HotelTonight received what Simon referred to as a “tremendous amount” of inbound requests from hotels in Costa Rica and from potential users as well. The launch process was made much easier by the amount of support and enthusiasm for HotelTonight in local market.
The app’s success in Mexico didn’t hurt, either. Many of Mexico’s hotels have relationships or ties with Costa Rican hoteliers, meaning that they were often well aware of what HotelTonight was long before its arrival. “For us, we spend a great deal of effort curating the available hotel inventory to make sure we only offer the best hotels. It’s made a whole lot easier when we have a lot of hotels that want to work with us,” Simon remarked. The plan was actually to launch in some of Latin America’s bigger markets first, but the Costa Rica opportunity, essentially, fell into HotelTonight’s lap.
Simon went on to discuss the company’s roll-out process, specifically, its criteria for choosing hotels:
What it comes down to, first and foremost, is that it takes a certain level of sophistication for the hotel to be able to operate in the use case that we serve. We’re optimizing for a customer who books on HotelTonight and shows up at the hotel five minutes later and wants to check in. We want to make sure that that experience is a beautiful, seamless experience for the guest. There are hotels that don’t have the level of tech and operational sophistication to make that happen. Usually, those hotels that don’t have that operation sophistication are hotels that have other service issues and reasons why our guests won’t appreciate a hotel, for one reason or another.
Finding that level of sophistication isn’t generally a problem in Latin America – in fact, it’s more difficult to do in the United States. Latin American hoteliers are, by and large, highly connected and accustomed to communications in real time.
Most of HotelTonight’s booking process is automated, inventory management taking place on an interface provided by the company itself or plugged into the hotel’s pre-existing system. The personalized work comes in a different fashion. “Hotels use us as a consultancy to talk about strategy,” Simon affirmed, elaborating:
We’ve sort of carved out this space that didn’t exist before. We’ve become experts in real-time yield optimization for hotels. It’s pretty amazing, but that just wasn’t anything that anyone spent that much time on before. It wasn’t something that the big online travel agencies really developed any expertise in, and the hotels have plenty of other things that they’ve got to do. So we’ve found that in many of our markets, we’re the experts on what the demand looks like in real-time, and what you should do with rate, your inventory and what not.
This is part of what sets HotelTonight apart from online travel agencies, of which hoteliers haven’t historically been the biggest fans. At this year’s PulsoConf in Guadalajara, Simon touched on the subject and HotelTonight’s goal to be different. “We wanted to be someone that hotels want to work with,” he said at the time.
He discussed the topic again yesterday, stating, “They like us better.” From the outset, the HotelTonight team has set its sights on being an entity hotels want to work with. They’ve built a supplier-friendly alternative that provides hotels maximum control and transparency in order to guarantee that hotels feel completely comfortable using the system as a distribution method.
With two Latin American markets down, a third is just around the quarter – and fourth and fifth after that. “Our plan is to become ubiquitous as quickly as we can,” Simon declared. “We want to be everywhere throughout Latin America.” So how will the order be decided?
The determination as to what’s next and what happens after that is really based on the dynamics in the market. We have started conversations with hotels throughout Central and South America, and we’re learning about the dynamics of each of those markets. Like I said, Costa Rica was not planned to be the first, but it just worked out so smoothly that it made sense to go ahead with it. And we’ll make that call with other countries as well.