Beyond the trust issue, Roomer's challenge is to publicize the service, scale it and to provide meaningful discounts off published rates in myriad markets on an everyday basis.
Founded in 2011, Roomer has to prove to buyers that they can nab substantial discounts and when they arrive at the hotel everything will be in order with their reservation.
Co-founder and CEO Gon Ben-David says the company studied how companies such as Airbnb and eBay handled trust issues and instituted a buyer protection policy, fielding a 24/7 call center team and guaranteeing that if anything goes wrong with a reservation then Roomer will give the traveler a “new hotel room at either the same hotel or a similar hotel in price, location and ranking.”
Ben-David says the Series A round signifies that Roomer has successfully proved its concept of creating a secondary market for nonrefundable-hotel reservations, and the company will use the $5 million in funding to increase its distribution and supply.
In the U.S., more than 200,000 hotel rooms get canceled daily, and that translates into an $8 billion annual loss, Roomer estimates.
Venture fund Disruptive led the Series A with participation from existing investor BRM Group, bringing Roomer’s total funding to $7 million.
With 20 employees, Roomer has an R&D team in Tel Aviv, a call center staff in Manila and a business development office in New York.
Ben-David says Roomer is testing distribution through metasearch and has implemented partnerships with travel agencies, including the consortium, Hickory Global Partners.
“Booking a hotel through a secondary market should be just like booking a hotel from Booking.com or Hotels.com,” Ben-David says.
Beyond the trust issue, Roomer’s challenge is to publicize the service to scale it and to provide meaningful discounts off published rates in myriad markets.
Subscribe to Skift Pro
Subscribe to Skift Pro to get unlimited access to stories like these ($30/month)Subscribe Now
Photo Credit: Roomer says it will ensure that guests don't run into problems at check-in when they buy nonrefundable reservations from other travelers. Alan Light / Flickr.com
SiteMinder Gets Backing From Financial Giant Fidelity Ahead of Hotel Software IPO
SiteMinder minimized the pandemic's hit to revenue by selling new tools to help hotels with payments and digital marketing. No wonder Fidelity International wanted to invest ahead of the startup's likely initial public offering in 2022.
Sean O'Neill, Skift | 5 days ago
Europe’s Hotels Will Wait Until at Least 2025 for Full Return of International Business Guests
Be wary of everybody’s favorite word at the moment: pent-up demand. Your typical leisure traveler can book a trip and pack their bag in minutes, but companies will keep employees on a tight leash for years to come.
Matthew Parsons, Skift | 6 days ago
Launching Travel Tech Briefing, for Skift Pro Subscribers Only
Making the right choices has never been more crucial coming out of this pandemic. Not far from the core of every decision will be technology. Skift is now offering travel executives weekly the critical information needed to build, buy, or partner.
Tom Lowry, Skift | 6 days ago