HotelTonight's acquisition by Airbnb last March represented a happy outcome, but it wasn't inevitable. Back in 2015, HotelTonight faced layoffs and fundraising hiccups. Here, co-founder and CEO Sam Shank shares some of the ways he got his company back on track.
Travel's most forward-thinking insiders will gather September 18–19 for our annual Skift Global Forum in New York. In just a few years, Skift's Forums — the largest creative business gatherings in the global travel industry — have become what media, speakers, and attendees have called the “TED Talks of travel.”
Skift Global Forum 2019 will take place at Jazz at Lincoln Center’s Frederick P. Rose Hall in New York. This year's Forum speakers include CEOs and top executives from Booking Holdings, Delta Air Lines, Expedia, Air France-KLM, Marriott International, Amtrak, and many more.
Airbnb bought HotelTonight in March in a deal that boosted the travel giant’s hotel listings. Airbnb didn’t reveal how much it paid. But we reported that the company paid a little more than $400 million, with about half in cash and half in stock.
HotelTonight got its start by helping people find last-minute hotel rates at upscale properties. It also helped hoteliers fill otherwise empty rooms with carefully targeted discounts. Over time, the company became a more flexible online travel agency. It expanded its booking window, added platforms, and debuted a digital concierge service.
Shank will appear on-stage at Skift Global Forum in New York City on September 19. As a prelude, we quizzed him on how his company has used data to thrive.
One surprising point: Shank doesn’t believe data deserves all the hype it gets. “When making decisions, I always balance data with other inputs such as focus groups, market research, and industry trends,” Shank said.
Skift Editor’s Note: This interview has been edited and condensed for clarity and length.
Skift: What did HotelTonight do to improve its data game?
Sam Shank: About three and a half years ago, we realized that, in moving fast, we had accrued a data deficit. Our data was decentralized, inefficient, and there was low accountability around accuracy, availability, and other key performance metrics.
To remedy that, the first step we took was allocating more significant resources to this function of the business, including placing one of our best executives in the lead role.
Through this effort, we developed lightweight controls and data standardizations, which were key to improving our data game. In the end, our efforts positively impacted financial systems, product reporting, hotel performance measures, and ultimately helped us run a more efficient and faster-paced business.
That being said, I’m a firm believer that data alone is not enough. When making decisions, I always balance data with other inputs such as focus groups, market research, and industry trends.
I believe in servicing the customer first, whether it’s the hotel partner or the guest. I ask the team to spend time considering what they are seeing and hearing from these end users — and how we can utilize these insights to improve the overall experience of HotelTonight. I’ve found this leads to the best solutions that the data alone would never reveal.
Skift: How has having a “product mindset” helped your company?
Shank: We’ve taken a holistic approach to the product mindset, extending it far beyond the actual product we’re selling.
Since day one, we’ve thought about the company and employee experience as a product. So we’ve mapped out what we want the experience to look like from start to finish, and we’ve put goals and strategies in place to achieve that.
All aspects of our culture and employee experience have analogs within the product of HotelTonight — for example, simplicity, design, and delight.
Skift: How has that mindset translated in practical ways?
Shank: The first thing we did was invest in the HotelTonight workplace, ensuring it was a reflection of our hotel partners. Our first partner, The Ace Hotel, inspired the strategy. We built spaces for collaboration, spontaneous brainstorming sessions, and shared meals.
Besides, we wanted our culture to reflect our product and mission, helping people plan less and live more through spontaneous travel. We did this by implementing a monthly tradition called HT Roulette, where employees have the opportunity to win a spontaneous getaway courtesy of HotelTonight.
On random Tuesday, employees can opt into HT Roulette, and we spin a wheel to select a winner. The winner spins a wheel to determine the travel budget for their trip including airfare and HotelTonight credits – and they depart that weekend for their last-minute vacation.
Skift: What has been your approach to fostering career development at HotelTonight?
Shank: On the work and career development front, we’ve implemented programs to keep our team inspired and continuously learning. Efforts include fireside chats with entrepreneurs, educational workshops on topics ranging from problem-solving to how hotels operate. We also put in place a peer coaching program where employees can get advice on overcoming challenges and achieving goals.
We honed in on running efficient meetings. We require having agendas, clear action-items, and limited numbers of attendees. We always end on time, if not early.
Our weekly all-hands meetings promote transparency and always include employees presentations giving them a chance to enhance their professional development.
Skift: How does HotelTonight help “long-tail” properties sell more savvily?
Shank: One of our biggest differentiators is the symbiotic partnerships we’ve built with our hotel partners. We partner with them in a few different ways. One way is helping them set rates in intelligent and innovative ways via our personalization and targeting features. Specifically, our GeoRates feature allows hotels to attract customers in geographic locations where they may typically lack in demand.
For example, if a hotel in New York City is looking to increase bookings from travelers coming from LA, they can target them with a geo-specific, or personalized, discount. The tactic lets a hotel fill its rooms with incremental visitors, create awareness, and gain a customer base in a new location.
Another feature, HT Perks rates, allows partners to generate bookings with high-value guests, including frequent business travelers and influencers. In addition to reaching these customers, this feature helps hotels compete more effectively versus their competitive set.
Lastly, hotel partners can opt into our Daily Drop feature. We offer a unique, ephemeral deal that bookers can unlock once per day to reveal an offer that expires in 15 minutes.
It’s a great way for hotels to drive incremental revenue from our most spontaneous bookers while retaining price integrity.
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Photo Credit: The Lucky Dragon Hotel and Casino is an Asian-themed boutique hotel and casino that has sometimes offered rooms on booking site HotelTonight. You can hear the CEO of HotelTonight, Sam Shank, speak at Skift Global Forum in New York City in September 2019. Tim Rue / Bloomberg
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