Check Out The Tech Tools Experts Use

Like you, travel  experts can’t live without their tech gadgets when they travel.  Needless to say, applications for Apple’s iPhone and iPad were high on most lists, but there are still plenty of great tools out there for other smartphone users and even those with just regular cellphones.

Rob Katz, chairman and CEO Vail Resorts: “When I’m traveling around the U.S. I use Yelp. It helps me quickly find almost any amenity and has reviews and additional information. I also use Open Table quite a bit.”

Christopher J. Nassetta, president and CEO Hilton Worldwide: “I never leave for a trip without my iPad. Not only do I keep connected to the office on it via email and other applications, but I also keep current with the news, such as reading The Wall Street Journal online. When I’m traveling with my kids, it has also come in handy to have some games loaded on my iPad to keep them busy.”

Samantha Brown, Travel Channel host: “I spent all last year traveling to Asia and after weeks of being fed a TV diet of only the BBC I could hum their theme music with absolute perfection and imitate up to four distinct British accents. So for me Slingbox is one of the most ingenious ideas I had ever heard for the international traveler. Essentially through a box and a program, my laptop becomes my home TV so no matter where I am in the world I can watch my favorite DVRed shows from ‘It’s Always Sunny in Philadelphia’ to ‘30 Rock’ to ‘Meet the Press.’ Only problem? Even 10,000 miles away my husband and I can still fight over the remote.”

Thomas Stuker, United Airlines top frequent flier with 9.75 million miles: “My two favorites, especially with all the international travel is Skype — both on my computer and now on my phone — to stay connected with friends and business associates around the world for just pennies and my second one is Slingbox — again on both my computer and my phone — so I can watch my Bulls and Blackhawks in the playoffs as well as my Cubbies attempt in vain to win the World Series for the 100-plus year in a row.”

Check The Buzz About Hotelmine

There’s a lot happening since the recent launch of the Hotelmine.com website this past week.  Thanks to all of the hotels that are participating and we look forward to adding more hotels this week.

Tom Costello is the CEO, Partner & Co-Founder of Groups International, a company that provides marketing, consultative services, and technology solutions to the group and leisure travel markets.  Connect with him on Twitter, LinkedIn, and Facebook or contact him by email.

TLabs Showcase – Hotelmine

TLabs Showcase on travel startups featuring US-based hotel distribution system Hotelmine.

Hotelmine

Who and what are you (including personnel and backgrounds)?

Hotelmine, a Groups International brand, is based in Houston, Texas and is a startup “direct connect” distribution model for the online leisure travel market segment.

The company was founded by Tom Costello and Chris Wenz who have been involved in both the group and leisure travel market segments for more than 15 years and have designed and developed patent-pending technology solutions that serve both of the aforementioned markets.

CEO and Co-Founder Tom Costello is an accomplished entrepreneur whose career includes more than 25-years of experience in the hospitality, corporate travel, meetings, and special events industries and is a highly regarded authority in the field of online meetings and events solutions.

COO and Co-Founder Chris Wenz, a ten-year veteran of the hospitality industry, is no stranger to new business ventures and has designed, developed, and implemented online housing and event solutions that facilitate the procurement and management of guest rooms for both groups and individual leisure travelers.

What financial support did you have to launch the business?

The company is privately owned and operated.

What problem are you trying to solve?

The costs associated with the distributing a hotel’s inventory through an indirect third-party channel is the most expensive distribution channel to-date.

This indirect distribution model resulted in hotels paying abnormally high merchant commissions estimated at $5.4 billion in 2010 that went into the pockets of online travel agencies (OTAs) like Orbitz, Expedia, Travelocity, Priceline, and Hotels.com in 2010.

As a direct connect distribution channel, Hotelmine can lower a hotel’s distribution and conversion cost by up to 80% as compared to the same transactional cost as charged by an OTA.

Hoteliers need a robust direct online strategy accompanied by adequate marketing funds to be able to:

• Take advantage of the steady growth in the Internet channel.
• Shift bookings from indirect (OTA) to direct (hotel website) online channels.

Describe the business, core products and services?

Hotelmine has developed a proprietary, patent-pending technology that combines the power of B2C with a robust peer-to-peer social media architecture that allows members to book direct with a hotel and to share their research, travel plans, and transactions with family and friends.

Hotelmine offers more than just a rate on a guest room and members can choose from a variety of options that include Deals of the Week, Hot Dates & Rates, Packages, and Last Minute Deals. We even provide our members with the tools to help them find the best rate on ten guest rooms or more.

What makes Hotelmine different is that we’re not a travel agent and we don’t have anything to sell. Unlike mega-OTAs and travel agents who charge a commission, booking fee or markup wholesale rates, we don’t.

When a member sees something that suits his taste or budget, he books directly with the hotel by calling the hotel or through the hotel’s website booking engine.

Who are your key customers and users at launch?

Our key customers will include full and limited-service hotels that are privately owned, franchised owned and corporate managed as well as hotel management firms.

A user is anyone who is searching for more than just a rate on a hotel room.

Did you have customers validate your idea before investors?

We talked with literally hundreds of hotel owners, hotel sales and marketing representatives, hotel management companies, end-users, and software development companies who are involved in our space.

The feedback and response has been overwhelming and continues to spur us on, with great anticipation, to the successful launch of the site.

What is the business AND revenue model, strategy for profitability?

We will introduce two different marketing packages that are specifically designed to meet a budget and marketing strategy of either a full or limited-service hotel.

The price point for either package is affordable and we offer our hotel partners a plan that would require a small percentage of the annual subscription rate and the balance spread out over quarterly invoiced payments.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• Combined 35-years experience in group and leisure travel markets
• Experience in development and implementation of technology solutions
• Excellent existing relationships with hotels at both the corporate and local level
• B2C platform combined with robust P2P architecture

Weaknesses:

• API under development
• A new business model for an industry that historically lags  two years behind

Opportunities:

• 40 percent of U.S. leisure/unmanaged business travel bookings booked online
• Affordable low-cost entry for hotels
• Search methods changing from search engine-based to social media-based
• GDS channel is in steady decline
• Cost of indirect booking eight times the cost of direct booking
• Commission leakage in 2010 to third-party sites estimated at $5.4 billion

Threats:

• Educating consumers on the “direct connect” value proposition
• Lack of strict rate parity
• Economic instability combined with double-dip recession

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

A former VP suggested that there was no room for a direct channel distribution model in a crowed market dominated by Orbitz, Travelocity, Priceline, and Hotels.com and hotels would not be interested in the service.

We did not listen to him because we receive our direction and inspiration from a much higher source.

What is your success metric 12 months from now?

• Expand our hotel content to include Canada, Europe, and the Caribbean.
• Continue the development of our mobile solution.
• Launch a web-based application that will enable hotels to engage with prospective customers the minute they start to think about travel.

A Hotel’s Case for Direct Connect

If it costs the airlines billions to conduct business through OTAs and the GDS then what will it take for the hotel industry to re-think its current conventional distribution strategy?

The recent actions by American Airlines to move forward with their “direct connect” model has ushered in a new era of how products and services are marketed to travelers.

According to an article released by Fairlogix, “A Picture is Worth $7 Billion, The real story behind airline distribution, travel supply chain, and consumer value”, it costs the airlines roughly $7 billion annually to conduct business through their current indirect distribution channels such as Orbitz and Sabre.

To set the record straight “direct connect” is not a new phenomenon in fact Orbitz introduced its own version of direct connect in 2002 with none other than the same airline that they are now battling.

The technology known as “Supplier Link” was designed to lower costs and avoid Global Distribution Systems (GDS) fees but Orbitz eventually went on to become AA’s highest-cost OTA (Online Travel Agency) per booking.

The OTAs and the GDSs have made their sentiments against direct connect very clear: They want to control the airline’s product, pricing, distribution, and at the end of the day remain status quo.

Likewise the intentions stated by American Airlines, Air Canada, AirTran, and Southwest Airlines are equally as clear: They want to control their product and inventory and establish closer ties to their customers.

The hotel industry and the OTAs

While the OTAs and the GDSs continue to dig in their heels in this uphill battle with AA, let’s take a look at another market segment that is under their thumb, the hospitality industry, where especially the OTAs are blamed for commoditizing hotels, decimating rates, and training travelers to demand deep discounts.

According to a much discussed article released by Hospitality eBusiness Strategies titled “The Billion Dollar Leak – The Impact of the Merchant Model on US Hotel Profits” revenue leaked from hotels to the OTAs in the form of abnormally high commissions was estimated to reach $5.4 billion in 2010.

In addition to this leakage, which primarily represents leisure travel, hotels are paying millions in commissions to “other” third-parties for business that represents meetings and events that are held at their hotel.

In total, we estimate the hotel industry is currently in the same predicament as the airline industry and don’t appear to be moving toward a “direct connect” distribution model.

Why hasn’t the hotel industry developed a strategy to wean themselves off OTAs?

Due to the lack of demand from 2008 through 2010 most industry pundits would suggest that hotels were too busy playing catch up and desperate to capture revenue from any source that was available.

We certainly can’t blame the OTAs for the adoption of that strategy but because of this hotels lost any momentum and market share that they could generate on their own.

Over that same time period OTAs demanded and got new agreements that were against everything the hospitality industry stood for: last room availability, guaranteed best rates (only found on the OTAs websites), penalties for hotels that don’t use the OTA, thus tightening the noose.

What are some options for hotels moving forward?

In order for the hotel industry to take back some of the control that they relinquished over the past three years, they must adopt some if not all of the following initiatives:

• Move beyond traditional search methods and engage prospective customers the very moment they start thinking about travel.
• Reverse the trend and reward customers who book in advance and not necessarily at the last minute.
• Maintain strict rate parity, a best rate guarantee, and in the future don’t give any distribution channel the ability to undersell your hotel.
• Expand social media presence and promote special offerings that are only available to individuals who are following your hotel.
• Make it a point to elevate current and prospective customer’s online experience before and after their stay at your hotel.
• Look for and adopt emerging direct connect distribution channels like Hotelmine™ that allow customers to book direct with you and not through an indirect channel.

Tom Costello is the CEO, Partner & Co-Founder of Groups International, a company that provides marketing, consultative services, and technology solutions to the group and leisure travel markets.  Connect with him on Twitter, LinkedIn, and Facebook or contact him by email.

Groups International Set To Soft Launch Travel Startup Hotelmine.com™ February 14, 2011

Hotelmine lowers a hotel’s distribution and conversion costs and provides greater transparency and choice for the consumer

Wednesday, January 26, 2011 – HOUSTON, TX—Groups International has announced that on February 14, 2011 it will soft launch Hotelmine.com, a new leisure travel site that serves as a “direct connect” between hotels and consumers who are ready to travel. 

“Hotels have been successful in offering consumers the ability to purchase guest rooms, special promotions, and packages through their websites,” said Chris Wenz, Partner and Co-Founder of Groups International, “but don’t have the same latitude with indirect distribution channels like an online travel agency (OTA) or the Global Distribution Systems (GDS).” What makes Hotelmine different is that it is designed to facilitate the same product offerings and the consumer books direct with the hotel through the hotel’s booking channels.

“We’ve gathered input from hundreds of hoteliers over the past two years and based upon their feedback we created a platform that allows hotels to market and sell products the way they want to sell them in a transparent environment where consumers can make an informed decision about which hotel best suites their budget or tastes,” said Wenz.  “This is a win-win for both hotels and consumers.”

Pre-registration is currently underway and hotels who would like to participate in the program can forward their contact information to info@hotelmine.com in order to receive registration instructions.

About Groups International

Based in Houston, Texas, Groups International provides services and technology solutions to the group and leisure travel markets and is the parent company to iGroupManagement™, iGroupHotels™, iGroupMeetings™, iGroupAdvisor™, iGroupPlanner™, and Hotelmine™.

If you would like additional information regarding Groups International and Hotelmine or you would like to schedule an interview with Chris Wenz, please contact him at the following email address:

Contact: 

Chris Wenz

COO, Partner & Co-Founder

Groups International

chris@groupsinternational.com