Some hotel search sites are focused on the best prices, regardless of whether a low price is the norm for that hotel or just a one-time offer, while some focus on amenities or star rating. Startup DealAngel is looking to give consumers insight not only into whether a hotel room is a great price, but whether it’s a great value based on its usual pricing and factors like dates and room availability. The company, which is currently in the TechStars Boulder startup accelerator program, launched at the DEMO conference in April and since launching has expanded its list of available cities from 100 to 150, including its first international destinations in time for the London Olympics.
The original idea for DealAngel took a different form, one targeted at hotel owners rather than travelers. Founders Roman Peskin and Bob Rogers are travel industry veterans, with Rogers formerly at Expedia, and Peskin offering revenue management consulting for hotels, which involved helping them understand whether they were charging the right price for rooms on any given day. Their original company, Inntelligenz looked to provide revenue management tools to hotels on a larger scale, but after they built it and started selling it, they realized that they were using it when they traveled to new cities to find out whether hotels were charging what was fair market value.
It was then that they decided to build a consumer-facing product that would take that revenue management software and apply it to the idea of helping travelers find the hotel that is the best value for their money. “We thought wait a second, maybe we should go from the dark side to the light, and instead of helping hotels to maximize their profits, help consumers find those hotels that are not charging as much as they should,” Peskin said. “We give you the same pile of information [as other hotel search sites], but we will identify those which are not charging as much as they should and put them right in front of your face and say those are hotels that should be more expensive on that day but they’re not.”
Consumers can search for hotels in major cities around the world, and view a calendar that is color-coded based on the best value. Rogers notes that since the search engine is based on good value, sometimes there won’t be any deals in a city, for example in London during the Olympics, or in a city that has a major conference on during that time period. DealAngel doesn’t handle bookings, rather consumers are redirected to the deal site where the hotel is listed in order to book.
As for why consumers want a search engine that’s based on value rather than price, Rogers believes travelers would rather stay in a nicer hotel that happens to be underpriced on a given night, rather than a hotel that always offers cheap rooms. “When you sort by price, you’re going to get the cheapest hotel, but actually the cheapest hotel could be a very big ripoff because it’s always the cheapest hotel and in fact it’s more expensive that it usually is,” Rogers said. “We’re taking about incremental value for money.”
The company makes money through affiliate bookings, and Rogers and Peskin said they don’t plan to implement any advertising on the site. Right now it’s web-only, but an iPhone app is in development. Now that they’ve launched in their first international market, Rogers said they’ll be adding other major European cities in the next few months, and then looking to other international markets including Asia Pacific and Australia.
Though they wouldn’t divulge numbers in terms of rooms booked through the site or number of users, Rogers said their conversion rate is “double to triple” the industry standard, and that feedback from users has been positive. But they admitted that building out the audience is the hardest part, especially when competitors like Hotwire, Expedia and Kayak have such a big share of the market. Rogers said they’ll be looking to partner with travel companies like TripAdvisor, which are a travel resource but partner with third parties for hotel bookings. ”TripAdvisor does what they do very well, but if you look at how they provide options for booking, the experience is kind of Web 1.0,” Rogers said.
While they focus on building DealAngel, Peskin and Rogers have shelved Inntelligenz, which Peskin said they’ll bring back to the market “when the time is right.” Providing big data insights to hotels might still be on the table though, since Rogers said they can help hotels target their deals to consumers based on when a customer searches in a given city, or asks to get notified about price drops. ”There’s a lot of smart things we can do with our data,” he said. “It’s no longer advertising, it’s insights.”