If you've never heard of HotelTonight, prepare to keep reading more about it. The last-minute booking app, which is tabbed by Yahoo! as a top travel trend, is growing in popularity and profitability. Why? Because the app gives travelers discount rates and in-app concierge services at thousands of hotels.
Wall Street is noticing this potential unicorn: CEO Sam Shank plans an IPO by 2017. And this week, the San Francisco-based startup teamed up with a fintech leader as a partner.
On September 8, Capital One announced a partnership with HotelTonight that gives Venture and VentureOne cardholders an extra 10 percent discount on top of the app's other deals. Cardholders can unlock the savings by entering the code “Venture” through January 2017.
“We are obsessed with how to save our customers time and money,” said Manan Mahadevia, managing vice president at Capital One. “How do we help them plan less and save more when they travel? It's a natural fit for our two companies to work together.”
Is hotel discount pricing here to stay?
The 43-year-old Shank says that on average, travelers save 17 percent on their room rates through HotelTonight. That'll take a bite out of your travel bill. In addition to the 10 percent discount, Venture cardholders will continue to earn unlimited double miles. Similarly, VentureOne customers will still earn 1.25 miles on every purchase.
It pays to delay
In the airline industry, plane tickets get more expensive the longer you wait. But the opposite is true in the $144 billion U.S. lodging industry where it pays to delay. The more you wait to book your hotel, the cheaper it is to reserve your room. But think about it. Hotels want to increase their occupancy, and lowering room rates is the best enticement for filling up empty beds.
The closer it gets to the check-in cutoff, travelers see a further drop in prices. The app is essentially a real-time market for hotels around a city and bargain-hunters can lock up rates that's appropriate for their budgets.
“Our top customers use the app all the time,” said Shank. “They love the fact that they're not having to plan — that they can be more spontaneous. You just book the hotel when you need it. It saves them time on the booking but also saves time on planning and the logistics associated with [traveling].”
As the saying goes, patience is a virtue.