{"id":36561,"date":"2018-11-13T20:00:55","date_gmt":"2018-11-14T01:00:55","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/make-tonight-unforgettable-with-hoteltonight\/"},"modified":"2018-11-13T20:13:56","modified_gmt":"2018-11-14T01:13:56","slug":"make-tonight-unforgettable-with-hoteltonight","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/make-tonight-unforgettable-with-hoteltonight\/","title":{"rendered":"Make Tonight Unforgettable with HotelTonight"},"content":{"rendered":"<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/HT.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-35698 \" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/HT.jpg\" alt=\"\" width=\"549\" height=\"303\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/HT.jpg 950w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/HT-300x165.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/HT-768x424.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/HT-600x331.jpg 600w\" sizes=\"auto, (max-width: 549px) 100vw, 549px\" \/><\/a><\/p>\n<p>Founded in 2010, HotelTonight (\u201cHT\u201d or the \u201cCompany\u201d) has been revolutionizing the online travel industry through its cutting-edge mobile app that offers consumers access to last-minute hotel deals at discounted prices. HT\u2019s value proposition is compelling and addresses multiple trends within the travel and hospitality industry, including:<\/p>\n<ul>\n<li><strong>Increase in Spontaneous Travel.<\/strong> Travel (particularly among millennials) is moving towards last-minute and mobile booking. 50% of hotel bookings are made within three days prior to check-in and 43% of accommodations are booked via mobile applications [1,2]<\/li>\n<li><strong>Distressed Inventory.<\/strong> According to the Company, ~40% of hotel rooms are unoccupied on any given night, and hotels are not very willing to discount in order to preserve their rates [3].<\/li>\n<li><strong>Curated Selection.<\/strong> Hotels have struggled to capture a captive audience with legacy online travel booking providers that offer hundreds of potential lodging options.<\/li>\n<\/ul>\n<p>Historically, incumbent online travel booking companies (i.e. Expedia, Priceline, TripAdvisor, and Booking.com) offered relatively antiquated travel solutions that did not address these issues. As such, HT\u2019s founder and co-CEO, Sam Shank, an experienced travel industry entrepreneur, launched HotelTonight, a last-minute hotel booking mobile app that connects savvy, on-the-go consumers with a curated list of hotel rooms for all budgets (from Basic to High-Roller). HT works directly with hotels to sell unsold hotel room inventory (which would otherwise go unsold), helping drive increased demand and revenue.<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/how-to-build-great-apps-on-the-product-side-with-bao-dinh-hoteltonight-3-638.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-35737\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/how-to-build-great-apps-on-the-product-side-with-bao-dinh-hoteltonight-3-638.jpg\" alt=\"\" width=\"638\" height=\"456\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/how-to-build-great-apps-on-the-product-side-with-bao-dinh-hoteltonight-3-638.jpg 638w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/how-to-build-great-apps-on-the-product-side-with-bao-dinh-hoteltonight-3-638-300x214.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/how-to-build-great-apps-on-the-product-side-with-bao-dinh-hoteltonight-3-638-600x429.jpg 600w\" sizes=\"auto, (max-width: 638px) 100vw, 638px\" \/><\/a><\/p>\n<p>HotelTonight\u2019s mobile app leverages machine learning to power a streamlined and dynamic user interface where consumers can book last-minute hotel rooms at steep discounts. The Company has demonstrated significant growth, expanding rapidly to serve hundreds of destinations across 35+ countries with 15,000+ partner hotels [4].<\/p>\n<p><em>Is Hotel Tonight\u2019s business model sustainable? Or will the Company inevitably be swallowed up by the online travel booking behemoths? <\/em><\/p>\n<p>The online hotel booking industry is hyper-competitive. HotelTonight faces extreme competition from legacy online booking providers as well as several mobile, data-driven start-ups that have emerged in recent years. As a result, HT\u2019s future growth and profitability might be at risk due to shrinking margins as customer acquisition costs rise with the increased competition.<\/p>\n<p>In my opinion, HotelTonight\u2019s data-driven approach, rooted in machine learning has enabled the Company\u2019s growth and should continue to serve as a barrier to entry. Over the last 7+ years, the Company has worked to perfect its ecosystem of algorithms to drive real-time analytics and personalization. In particular, HT utilizes several tools that help increase customer engagement and lifetime value, including:<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/download-6.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-35988\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/download-6.jpg\" alt=\"\" width=\"191\" height=\"155\" \/><\/a><\/p>\n<ul>\n<li><strong>HT Pros:<\/strong> best-in-class mobile concierge service, primarily targeted for high-value users.<\/li>\n<li><strong>HT Perks:<\/strong> loyalty program that provides users with discounts based on tier (1-9+); another avenue for hotels to target user segments (based on spend, preferences, etc.). HT understands its users and know which types of hotels they like to book at, so hotels can use this to target customers<\/li>\n<li><strong>Geo Rate:<\/strong> HT is able to target customers based on their geography and offer different prices to different customers to drive incremental bookings\/revenue for its hotel partners<\/li>\n<\/ul>\n<p>As a result, I believe that HotelTonight has created a niche within the spontaneous, last-minute hotel booking market and should continue to benefit from secular tailwinds, particularly among millenials. According to Shank, millennials are &#8220;fundamentally different as a generation, which extends to how they travel and how they really travel for business. What they really want is value. They&#8217;re really interested in spending a little bit more to get a whole lot more versus previous generations who just want to spend the absolute least amount of money as possible.&#8221; [5]. \u00a0Importantly, in September 2017, the Company increased the booking window from 7 days to 100 days. Moreover, HT just began offering a desktop website for consumers to book hotels, in contrast to its historical mobile-only approach. These moves could help the Company offset increased competition and fuel future growth with an increased reach and addressable market size.<\/p>\n<p>Going-forward, HotelTonight needs to focus on driving increased brand awareness and customer loyalty. \u00a0With the democratization of data, the travel industry is undergoing a digital transformation as consumers have become smarter than ever about their travel decisions. Importantly, 57% of U.S. travelers feel that brands should tailor their information based on personal preferences or past behaviors [6]. As such, HT will need to continue to leverage data and machine learning to drive personalized, high-quality hotel rooms at great rates, and become further entrenched within its customer base.<\/p>\n<p>However, the crucial question remains: <em>As machine learning becomes more and more ubiquitous, will HotelTonight be able to maintain its competitive edge? Are the Company\u2019s existing barriers to entry strong enough to drive sustainable growth in the future?\u00a0<\/em><\/p>\n<p>(781 words)<\/p>\n<p><span style=\"text-decoration: underline\"><strong>Sources:<\/strong><\/span><\/p>\n<ol>\n<li>&#8220;Digital Marketing Trends For Travel And Hospitality: Engaging An Audience On The Run | Adobe Blog&#8221;. 2018.\u00a0<i>Adobe Blog<\/i>. https:\/\/theblog.adobe.com\/digital-marketing-trends-travel-hospitality-2017-engaging-audience-run\/.<\/li>\n<li>&#8220;From 性视界 Engine To Booking Engine: Sojern\u2019S 2017 Hotel Report&#8221;. 2018.\u00a0<i>Sojern.Com<\/i>. https:\/\/www.sojern.com\/travel-insights\/2017-hotel-report.<\/li>\n<li>2018.\u00a0<i>Usatoday.Com<\/i>. https:\/\/www.usatoday.com\/story\/tech\/talkingtech\/2017\/03\/10\/hoteltonight-looks-save-money-tourists\/99032360\/.<\/li>\n<li>&#8220;Hoteltonight Essentially Pivots To Become Hotel Whenever&#8221;. 2018.\u00a0<i>Skift<\/i>. https:\/\/skift.com\/2017\/09\/08\/hoteltonight-100-day-booking-window\/.<\/li>\n<li>Castillo, Michelle. 2018. &#8220;When Millennials Get A Hotel Room, How It Looks On Social Media Matters More Than The Price&#8221;.\u00a0<i>CNBC<\/i>. https:\/\/www.cnbc.com\/2017\/07\/31\/hoteltonight-ceo-millennials-want-instagram-worthy-deals-over-savings.html.<\/li>\n<li>&#8220;2018 Travel Trends To Help Shape Your Marketing &#8211; Think With Google&#8221;. 2018.\u00a0<i>Think With Google<\/i>. https:\/\/www.thinkwithgoogle.com\/consumer-insights\/age-of-assistance-travel-marketing\/.<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In need of a last-minute hotel room for upcoming travel? How HotelTonight is using machine learning to disrupt the online travel booking industry. <\/p>\n","protected":false},"author":11465,"featured_media":36588,"comment_status":"open","ping_status":"closed","template":"","categories":[346],"class_list":["post-36561","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-machine-learning","hck-taxonomy-organization-hoteltonight","hck-taxonomy-industry-travel","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Make Tonight Unforgettable with HotelTonight - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/make-tonight-unforgettable-with-hoteltonight\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Make Tonight Unforgettable with HotelTonight - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"In need of a last-minute hotel room for upcoming travel? 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