Skift Take

HotelTonight is no longer a mobile-only company. It's no longer just for same-day stays, as its name once implied. Investors seem to want no potential income left on the table, even if the brand must lose some of its original distinctiveness.

HotelTonight, the online travel agency that stood out from the crowd by being mobile-only, has debuted a desktop version.

HotelTonight’s introduction over the past 10 days of a desktop site had been predicted by Kayak CEO Steve Hafner a year ago in an interview with Skift, when he said, “Ultimately (HotelTonight CEO) Sam (Shank) has a losing hand. Next up… an HT website that accepts bookings.”

Without a web version, HotelTonight has not been able to advertise on the desktop version of Google’s price-comparison, or metasearch.

Google’s metasearch enables vendors to bid on users searching for travel dates on shorter lead times and to redirect those users to landing pages that are highly optimized for conversion with typically fewer properties listed and often fewer filter options providing distractions. HotelTonight could boost its share of the market by finally competing with other players for that market. Its move into mobile web search a few years ago enabled it to participate in Google’s, Trivago’s, and other price-comparison search auctions in the same way.

CEO Shank said hoteliers were clamoring for an alternative to the conglomerates Booking Holdings and Expedia Group. Having a HotelTonight desktop presence would increase more volume outside of those two giants.

“Distribution channel concentration is driving interest in HotelTonight as an alternative for hotels that want a variety of options,” Shank said. “Hotels like the audience we bring, in that we tend to attract a millennial, high-spending customer.”

Shank long resisted the need to appear in desktop browsers, partly due to the highly episodic nature of travel-related purchases, which incurs high customer acquisition costs via search engine optimization and marketing. But times change.

Shank said a key benefit of the move is that it makes the company’s marketing that isn’t paid search, such as brand advertising via billboards and videos, more efficient. Someone who sees a sign advertising the company on the street on their way to the office may be more likely to search on their desktop browser at the office for a look at the brand than download a mobile app.

Some hotel revenue managers talk about setting aside a certain share of their inventory to mobile-only channels to try to segment their desired customers into different cohorts. Can these managers opt out of having their inventory appear in desktop search?

“Yes,” said Shank, but “very few hotels” so far have chosen to have their inventory excluded from desktop. Shank said that one way HotelTonight stands out from many of the major online distributors is that it doesn’t require guaranteed allocations of rooms, minimum inventory, or other restrictions that bigger players demand.

The desktop experience is nearly identical to the mobile experience. It’s not clear whether consumers who have been trained to see hundreds of results for a search on a particular destination in the big screen format will feel like they’re getting a full array of options when seeing only 15 handpicked deals from HotelTonight on any given search.

HotelTonight desktop

If desktop browsers are shrinking as a percentage of users versus mobile, investing in a fading platform may seem like a counter-intuitive decision.

Shank said it took his team only three months to build the desktop version, which he said is a testament to his company’s agility but also to management’s ability to keep investment costs controlled.

The hotel booking site raised $37 million in early 2017 in a Series E round led by Accel Ventures.

Shank said his business is “going well” and is profitable on a basis of earnings before interest, tax, depreciation, and amortization.

Earlier this year, Shank said in a Skift interview that the giant online travel agencies are in direct competition with hotels — hence the direct booking wars — while HotelTonight doesn’t take an adversarial stance, providing hotels with incremental revenue.

Shank said Tuesday his company had record summer sales. The Friday of Labor Day Weekend, for example, was its best day ever in both revenues and room nights booked.

A year ago, the company extended its booking window to 100 days. A spokesperson said, “We’re on track to grow bookings in our extended window by 360 percent year-over year in the fourth quarter.” The company has a presence in nearly 40 countries.

No word on when HotelTonight might IPO. Or be acquired by one of the giants, as the company was reportedly in talks to have happen in 2015.

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Tags: hoteltonight, mobile apps, online travel agencies

Photo credit: CEO Sam Shank long resisted the need to appear in desktop browsers, partly due to the highly episodic nature of travel-related purchases, which incurs very high acquisition and "acquisition" costs via search engine optimization and marketing. But times change. HotelTonight

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