May 11, 2012
Expedia, Travelocity, Kayak, Bing Travel, Orbitz, Yapta, Hotels.com, Priceline, TripAdvisor, JetSetter, DealBase, Hotel Tonight, Hotwire, Agoda, Room Key, HotelSweep, Hipmunk, Momondo, Room77, YourRoomKey.
What I’m trying to say is, travel booking is a competitive space….
Could there possibly be room for another entrant into this field? According to Bob Rogers, COO and co-founder of DealAngel, there is.
And with nearly five years as Expedia’s Director of Market Management, Rogers knows the travel industry. In his opinion, most travel sites are missing the real deals; just because it’s cheap doesn’t imply it’s a true discount compared to market standards. DealAngel offers this real bargain finder.
I caught up with Rogers to learn more about the method behind DealAngel’s madness, the inspiration for his business, their competitive strategy, and what the future of travel holds.
Tech Cocktail: Can you further explain how DealAngel differentiates itself from the Expedia and Kayak.com’s of the world?
Bob Rogers: DealAngel is like a stock market analyst that finds undervalued hotel rooms. As hotel pricing is notoriously volatile and constantly fluctuates in reaction to shifting supply and demand, DealAngel’s ranking methodology, or ‘DealRank’, is based on the concept of ‘fair market price.’ We determine fair market price by analyzing the pricing behavior of all hotels in a market on a daily basis, for arrival dates far into the future. This is the same basic approach that some of the more sophisticated hotels use to optimize their pricing.
From this analysis, a clear picture is created of a hotel’s ‘competitive position’ in the market. This position should normally not change no matter what the prevailing market situation is, i.e. high or low demand. However, a few hotels in medium to large markets inevitably lose their way, or decide to price more (or less) aggressively than usual. When a hotel’s actual rate is significantly below its calculated fair market rate, it’s a ‘deal’ and gets bumped up the ranking. When the actual rate is in fact above its fair market rate, it’s a ‘rip-off’ and is pushed down the results list (or removed altogether).
Without being able to comment in detail on the ranking methodologies of competitor websites, it is obvious they are not the same as DealAngel’s, as many of our top deals are found buried way down on competitor sites, sometimes on page 10 or higher. Certainly a component of ranking for many of these sites is how much they will earn from each booking, as well as how competitive their own offer for this particular hotel is relative to offers for the same hotel on competitor websites. These elements may be important to the website, but they do not really benefit the consumer at all. Most importantly, DealAngel is fully transparent about how it ranks hotel offers. Our DealRank analytics show why a particular hotel is a great deal. Other websites tend to hide their methodology in a ‘black box’.
Tech Cocktail: What was the inspiration behind DealAngel?
Rogers: The idea for DealAngel grew out of an earlier B2B hotel pricing web app we launched called iNNtelligenz. iNNtelligenz offered a highly visual interface for hotels to see their competitive positioning in their market. We realized we were using iNNtelligenz to look for deals for our own travel, i.e., finding those hotels that had strayed below their normal competitive pricing position relative to competitors. We concluded that we were sitting on a virtual goldmine of information for the end consumer to make better decisions when they are looking for a hotel room, and we redirected our efforts in this direction. The rest is (recent) history.
Tech Cocktail: In such a competitive space, what will it take for DealAngel to break through the noise?
Rogers: There is no doubt that travel is a crowded space. But this is also one of the reasons a transparent, objective approach like DealAngel is so important. We have a number of plans in the works to establish DealAngel as THE trusted source for getting the best offers. And there are many new routes to getting the word out to the consumer beyond Google search, such as social media channels and smart partnerships. It will take time. But the cream always rises to the top in the end!
Tech Cocktail: What are the biggest learning lessons that you’ll be taking with you from your time at Expedia? What did they do well? What still needs to be improved upon?
Rogers: Expedia has been a true innovator in hotel distribution. It was amazing to be able to provide hotels access for the first time to such a large pool of demand and give them the tools necessary to optimize their online business. It is also the only online travel brand that has virtually global brand awareness, and is one of the preferred suppliers for DealAngel.
Saying this, I think Expedia could react quicker to changes in the needs of hotels, who now have numerous channels to manage and are increasingly trying to bring in direct business via their own websites. But they are a smart bunch at Expedia, so I’m sure they will figure it out.
Tech Cocktail: What do you see for the future of hotel booking?
Rogers: I still feel marketing in travel is in the stone ages and does not reflect the way people really become inspired to travel. A step in the right direction is the growth of mobile. One of the most enjoyable aspects of travel is spontaneity, and mobile is a great enabler here. I also think we can be a lot smarter about how we interact with consumers. Sending spam mails with random offers is very web 1.0. So much more can be done now to make this process more intelligent and intuitive. That’s what DealAngel is all about: using technology to help consumers make more informed travel choices.
Want to learn more? Watch DealAngel’s pitch from the most recent Santa Clara DEMO below.
Image credit: Kira Held
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