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Earlier this week we released our latest report, “The Rise of Mobile Booking in Travel“, looking at how mobile booking, while still in early stages, is one of the biggest growth areas in online/mobile travel. It is the most definitive state-of-the-market report on this big growth sector in travel. We’re extracting our interview with Sam Shank, the CEO of HotelTonight, below.
HotelTonight is a prime example of a mobile travel app that gets it right. The app is only available for mobile phones, and offers tonight only and last-minute deals on hotels. Even on a fresh download, the app assumes a lot about your intention through the phone’s stored data. It knows where you are and what your name is. It assumes that you want a hotel room nearby, and you want to check in fairly soon. It gives you options, but just a few. You can get a place to sleep within seconds, even if you are using it for the first time.
Skift spoke with Sam Shank, the CEO of HotelTonight to glean some advice on what makes a successful mobile app.
Skift: I find it interesting that I can’t book a room with HotelTonight without a smartphone or tablet. Why go mobile exclusive?
Sam Shank: When we started thinking about the idea in 2010, the driving force was a strong sense, after years in the online travel industry, that a true win/win last second booking tool for both hotels and guests was possible but had still not been invented. The advent of smart phones allowed us to interact with customers in new ways, and we determined that by focusing exclusively on mobile devices and on the last second use case, we could build a beautiful, fun and eminently useful service for both hoteliers and guests. The industry and consumer response has surpassed even our lofty goals and has allowed us to bring this concept to over 7 million customers throughout North America and Europe (and counting).
Being mobile-only also allows us to focus on building the best possible apps, and the best possible customer experience. This ability to say what we are NOT doing has been extremely liberating for the team, and has allowed us to attract some of the world’s best engineering talent to solve the technical challenges we face.
Skift: It’s interesting that your product is just laser-focused -does one thing and does it very well -but it’s still the most popular commercial travel app in the Apple app store. The next few are online travel agents that can perform a variety of tasks. Are you planning on offering more than tonight-only deals?
Sam Shank: Because the opportunity in last-minute / tonight only hotels is so enormous, HotelTonight has no immediate plans to expand into other sectors. By staying focused on doing one thing well, we can do it better than anyone else.
Skift: I would suspect that any given person would only have a small handful of apps for travel. How do you promote or distinguish yours to make sure that it is one of them?
Sam Shank: HotelTonight offers on-demand booking at top hotels in over 150 destinations across the globe, and specializes in independent/boutique properties with a variety of categories to choose from so travelers can stay at a hotel that best suits their needs.
We differentiate in a number of ways.
Our technology is built from the ground-up for mobile. So, amongst other benefits, a consumer can go from opening the app to having a hotel reservation – completing an entire hotel booking in less than 10 seconds, in 3 taps and a swipe.
We only work with great hotels we personally select. We screen every hotel and monitor their quality via guest ratings. If a hotel isn’t good enough, we stop working with them. It’s not worth it for us to put someone into a poor quality hotel where they will have a substandard experience.
We continually innovate with mobile-only features that take advantage of the platform. For example, our Snap Your Stay feature allows users to post and share photos of their hotel with other HT guests and through their social networks.
Our support team is world-class. We are advocates for our customers. We respond to emails in less than 10 minutes on average. And I personally read every support email.
Skift: Some data that I have seen suggests that mobile booking, especially last-minute booking is mainly a business traveler’s phenomenon. Do you think it can become more popular among leisure travelers?
Sam Shank: Just under half of our customers are business travelers who often don’t know where they need to be until the day-of and appreciate the value, quality and convenience of HotelTonight. The other half are spontaneous leisure travelers who use HotelTonight for a special occasion or last-minute getaway. In general, we are creating a new source of demand for the hotel industry a majority of our customers tell us that they didn’t need a hotel room when they woke up that morning, but were swayed to book a room because of what they found at the last-minute on HotelTonight.
Skift: Do the hotels that you partner with express any trepidation about conditioning their customers to be accustomed to deals, much the same way that Groupon has created a generation unwilling to pay full price for a massage?
Sam Shank: We agree that offering same-day discounts each and every day on mobile devices is bad strategy and will only train customers to wait to book. We would never advocate this strategy for any business, let alone a hotel, because it destroys the credibility of the hotel’s regular rate strategy and creates what is essentially a new “regular rate.”
By contrast, we limit our results to only a handful of hotels, rotate them every day to ensure the lineup remains unpredictable, and delay the availability of these rooms until noon the day of check-in. While this limits our potential market, it is a trade-off we are willing to make to ensure the app is valuable on a long-term basis to our hotel partners.
We have found that more than 60 percent of our guests did not plan on staying in a hotel before they picked up the app that day, and more than 90 percent had never stayed in the hotel they ultimately selected on HotelTonight. These results prove that by utilizing a tailored approach with real restrictions like HotelTonight, hotels can indeed take advantage of the impulsive nature of mobile users without negatively impacting their existing rate strategy.
Additionally, it’s worth mentioning that HotelTonight offers rooms with last minute discounts, but also non-discounted rooms. A significant percentage of HotelTonight customers book with us because of the convenience, curation and amazing customer service we provide – for them it’s important to get a room at the right hotel, not necessarily the lowest price or biggest discount. And our hotel partners always have the control to offer a large, small or no discount at all.
Skift: Do you have advice, actionable insights or best practices to share for companies trying to understand mobile booking?
Sam Shank: Stay focused. I think the best mobile apps can be defined not in a few sentences (like a web company) but five words or less. For HotelTonight, it’s “on-demand hotel booking” for uber it’s “hail a cab” and for GrubHub, it’s “bring me food.” Apps and their associated brands that try to do too many things simultaneously won’t be able to get the mindshare on a mobile device where simplicity and precision rules the day.