Nor1 Buys Stay Delightful as More Hotels Upsell Guests on Text Chat

When it comes to text-based chat, hoteliers get the message. They know that many guests would rather use text messaging than call on the phone or download an app if they want to request more towels or a late check-out.

But the industry remains a far way off from fulfilling that promise. Hotels use a patchwork of front desk systems. Some of these tools barely talk to each other.

Many companies have debuted chat-based interfaces from tech vendors such as Alice, Go Moment, and TrustYou. Some hotel brands, such as Marriott and Virgin, have developed text-based chat tools wholly or partly in-house.

Selling ancillaries via chat adds another layer of technical and commercial complexity. A small deal announced Tuesday spotlights this big picture reality.

Nor1, the Santa Clara, California-based upsell technology provider, has acquired Stay Delightful, a tiny Denver-based startup that builds the software that enables hotel guests to have text-based chat with staff about their stays.

Nor1, which sells merchandising and pricing tools to hotels, will now be able to offer ancillary sales via chat. The company’s clients include Hilton, IHG, Radisson Hotel Group, Accor, and Wyndham, and has raised $29 million from investors including Concur Technologies, Goldman Sachs, and Accel Partners.

The terms of the acquisition were not disclosed. Stay Delightful had raised a tiny amount of seed capital. It had signed a handful of hotels, including Coconut Waikiki and Collective Retreats, to use its product. The brand will vanish.

Broader Debate

An ongoing debate in the industry is how consumers want to communicate with travel brands. Some speculate that consumers, especially ones traveling internationally, would prefer to use tools like Facebook Messenger, WhatsApp, and WeChat, which avoid text messaging charges from telecoms.

Yet many of the tech solutions on the market are primarily based around text-messaging. Nor1’s newly acquired product fits that description, but Nor1 CEO Jason Bryant said the vision is to expand it to where customers want to be.

Another issue is how to handle what might be called “notification overload.” If every travel brand starts chatting by text with you by offering unbidden upsell offers, consumers may quickly tune out.

Looking ahead, Bryant said that successful tech providers will tap data scientists to figure out how to only send offers that are relevant based on data the hotel or third-party data provider has gathered about the traveler.

In practice, this would mean that hotels would pitch, say, a business traveler on a car service but not the two-hour spa treatment, and t would only send the offer that is most likely to be accepted rather than blitz the customer.

Lee gave some credit to his success from the mentorship he received a year ago at Travelport Labs, an incubator that UK-based technology giant Travelport ran for a few years in Colorado but was recently put on hiatus. The coaching by the program directors Nathan Bobbin and Richard Grote led his startup to pivot successfully, he said.

In a classic startup story, Lee said the dream acquisition became possible after he cornered Bryant in June 2017 at HITEC (the Hospitality Industry Technology Exposition & Conference) after a series of prior failed attempts to connect with him electronically.

Apparently, some of the most effective offers are still delivered in person.