Hotel Engine  

Lately, despite the threat of Omicron, we’ve witnessed a significant increase in vehicle traffic in our highways and streets. In fact, traffic jams in some major streets resemble that of pre-pandemic time. The same is true with foot traffic. Department stores and supermarkets have started to bring in their hibernating employees as customer traffic is also improving. Likewise, air travel is also picking up and airline companies are remounting their usual routes.

Absolutely, these are good signs. What is more encouraging is that venture capitalists are now having an appetite for start-ups that are geared towards travel and accommodation industry.  Specifically, in a fast rising platform, Hotel Engine. Therefore, it means, the travel and accommodation industry is due for a rebound.

First and foremost, we have to put everything in proper perspective. This venture capitalist is funding a platform. A platform business model is not about a software but value creation. The software is just the underlying technology that propels it. The value is created by facilitating exchanges between two interdependent individuals or groups, usually the producers and the consumers. In order to make frequent exchanges happen and consequently create a huge network of both providers or producers and consumers, big platform companies are using technology or software. Simply put, platforms create a place where users (both consumers and producers) can connect, interact and transact. 

Today, these platforms are household names. In fact, to some, they could hardly live without them. Notably, Google, Apple, Facebook, Amazon and Alibaba are easy recall. Other successful platforms and startups include eBay, Instagram, YouTube, Twitch, Snapchat, Slack, WhatsApp, Waze, Uber, Lyft, Airbnb, Pinterest, Square, Social Finance, GitHub, Kickstarter and ZocDoc.

As a testament to this business model’s domination, in just ten years, the composition of the top five global companies changed dramatically. In 2008, the top five were PetroChina, Exxon, General Electric, China Mobile and ICBC. In 2018, the top five were Apple, Google, Microsoft, Amazon and Facebook. Markedly, these companies are all based on the platform model.

Obviously, other platforms sprouted but some of them are just exactly replicating the very successful ones. Lazada or Shopee, for instance, are just replicates of giants Amazon and Alibaba. Curiously though, there are those who don’t just entirely copy. While it is true that they intend to be in the same industry where established platforms are dominating, they are not exactly copying everything. 

For instance, everyone knows that Airbnb is so dominant in the accommodation industry.  Condominium unit owners and couples with spare houses or rooms are taking advantage of this platform’s popularity. At a cheaper rate (as they don’t have much overhead), some hotels are bearing the brunt of their highly competitive tax-exempt undertaking globally. Obviously, this is also felt by hoteliers in the country. Yet, a start-up, Hotel Engine, in Denver (USA), went for something that shall please hoteliers in 2015. 

It is a “fast growing travel tech company that focuses on one goal – to make lodging management easier for businesses.” It is partnering with “the best brands to capture the unmanaged hotel business travel and its team of technology fanatics and hotel industry aficionados have a constant, unwavering dedication to build mutually beneficial partnerships.”

Simply put, it as a “Lodging Performance Network.” In its founder’s words, the startup is a B2B members-only, global booking platform that aims to provide companies access to better lodging rates as well as tools and insights designed to “optimize their travel programs.” CEO Elia Wallen puts it, they go for “high-value” business travelers. Clearly, therefore, its partners shall be hotels, nothing else. 

As a testament to its success, between the third quarter of 2020 and the third quarter of 2021, it experienced a “201% increase in core bookings revenue and increased its customer base by 60% to over 40,000 companies.” It also “added 100,000 people to its membership base, bringing the total to more than 550,000.” Impressively, these developments despite the ongoing pandemic.   

Disrupted by Airbnb even before the pandemic and knocked down by Covid-19, this is good news to our ailing hotel industry as Hotel Engine intends “to connect businesses and lodging partners globally.”