Hotel rooms, by the hour

No… it's not what you think.

Today’s traveler is fast-paced. Gone are the days of an overnight stay for a single day of business travel. Changing times have created a need for a facility to accommodate travelers with only a few hours in the city, and charge accordingly. Why pay for a whole night when all you have are a few hours of stay? This very question prompted Yannis Moati to start an innovative hotel accommodations technology: HotelsByDay.

Here, CEO and co-founder Moati shares the winning formula for hT readers.

Yannish Moati

Yannis Moati is CEO and co-founder of HotelsByDay

How did you come up with this idea?

I have 15 years in the travel industry, starting as a tour guide in Europe, then a travel agent, and finally a tour operator. My clients often asked for a room to refresh after long flights, or possibly to check in early, which was always difficult to secure at hotels. Yet, as a travel guide, I remembered walking hallways of empty rooms for the day. I knew a tech solution could solve this travel pain. I quit my job three years ago and launched HotelsByDay.

How does the model work?

Connecting to a property management system (PMS) means going through a central reservation system (CRS), and right now, no CRS is willing to tweak its technology for easy processing of day-bookings (when the whole machinery is set for night stays). Hence, we built seamless manual updates, as well as the easiest extranet in the industry, which allows for a light touch from hoteliers to load inventory with us.

Results show that, after two years, most partners rarely update the inventory, as our room packages are perfectly built to sell for the day without displacing overnight guests. Each hotel onboard is carefully analyzed to create the winning formula. Numbers speak for themselves: after two and a half years in business, we now have over 500 properties in 210 cities/ locations, growing at ten new properties per week, and quickly consolidating our leading position in the U.S. day-room sector.

What is your business model? This includes everything from who pays what to who bears the loss to who gets profits.

We ask for 15 percent commission on a booking. We offer two options to book: “pay at hotel” and “non-refundable” reservations, via our website and two apps (IOS and Android). Our platform is also set up to pay a commission to travel agents, which in turn feeds a greater amount of business travelers on the non-refundable bookings.

What benefits and profits do hotels and hoteliers get by registering with you?

On a daily basis, a conservative estimate of about 46 percent of a hotel’s inventory is being turned over. Five percent of that same inventory is clean by 10 a.m. and filled again with a night guest by 7 p.m. We therefore fill the day-gap, where otherwise a room would be sitting empty and unproductive—a crime in today’s tech connected and fast-paced world!

In terms of profits, it’s still too early to significantly increase revenues, but we have already received some thank-you emails from folks stating that we helped them close the budget in line with estimates. Those remarks mean the world to me; they validate the entire enterprise and hard work of these past three years.

Hotel Leads Innovatins

How much difference is there cost-wise, on average, for a usual stay versus a day-based stay?

Our American partners list day-rooms at about 50 percent cheaper than a night stay, for about six hours of stay.

How did you convince hotels to get on board in the initial stages?

The beginnings were difficult! Most hoteliers confined us to a niche, which was prone to stigma and had marketing and operational concerns. We thought we were going to quit but clients kept coming, and hoteliers noticed no difference between our day guests and their night guests, complemented by seamless technology and non-committal contracting. What’s not to love? Hotels kept boosting their RevPAR, as well as all sorts of ancillaries, with rooms that would otherwise sit empty. Now, hotel leads are inbound and we are witnessing a transformation in hoteliers’ mindsets. We are proudly becoming a valid and acceptable channel.

What is the profile of the guests who prefer to opt for your services?

Latest polling indicate 18 percent business, 22 percent bleisure, the rest (60 percent) is leisure. Guests use it to shower, change, refresh, nap, spa/pool-daycation, work in privacy, or meet in privacy; at any moment during the day and in any corner of the U.S.

Can you explain how HotelsByDay is different from the competitors who also offer a similar model?

First, let me say that all of our competitors are amazingly good. Everyone is committed to making this niche work, to the benefit of our guests seeking flexibility as well as hoteliers making inroads in inventory efficiency.

But we think we’ve got the winning sauce, enabling us to achieve the status of domestic leader in day-stays:

  • We offer seamless backend access to open/close/change inventory very quickly.
  • We offer non-refundable rates, to avoid possible no-shows, so that hotels don’t waste time.
  • Our site doesn’t discount night rates versus day rates. Our policy of no strike-through offers safety in overnight rate standing.
  • Finally, we are free for a hotel to test us on a trial basis.

Do you have any such provisions for those checking in at night?

FlexBook.co is the second step on our road to flexible bookings: we are integrating the day room inventory (10 a.m./6 p.m.) to night stays (3 p.m./11 a.m., plus one day) so that guests that wish to purchase a night stay with an early check-in or late check-out, would purchase it on FlexBook and have both of our services combined in just one reservation. This service is currently beta in NYC only.

Can you describe how HotelsByDay and FlexBook integrate with PMS and how hotels keep track of accommodation?

FlexBook.co fully integrates with all CRS and PMS. We are already connected to all the hospitality booking systems via three proprietary global distribution system (GDS) rate codes. On the other hand, HotelsByDay.com is a manual connection only, as it is a pure day-stay channel and there is no CRS system that accepts half the rate without messing up with night stay inventory.

By Najook Pandya