In the past, when 46-year old information technology (IT) professional Nirmalya Barua had to book hotel rooms for business or leisure travel, he would go to the website of an online travel agency because it offered a wide range of choices. When looking for budget options, he would book through hotel room aggregators, where he was assured of value-for-money pricing and no-frills but standardised quality. Lately, he has begun to rely on multiple mobile apps, depending on his needs, which include travelling at the last moment or seeking a room at his desired price. In recent times, these apps, which negotiate for discounts with hotels on the customer’s behalf, have grabbed travellers’ attention in a big way.
Book a room at the last minute: Imagine you have to travel to a city for a business meeting at short notice and have not booked a hotel room in advance. Or, your one-day trip to a new city gets extended at the last minute, leaving you without an accommodation for the night. In all these scenarios, you can turn to the Nightstay app on your mobile phone.
This platform aggregates unsold inventory from hotels and sells it to last-minute customers at a discounted rate. Says Nasr Khan, founder and chief executive officer, Nightstay: “Hotel inventory is a perishable commodity. If you don’t sell it today, the unsold inventory goes waste. We ask hotels to put their unsold rooms on our platform at a discounted rate.” Across India, informs Khan, the average occupancy of hotels is only 61 per cent. In other words, 39 per cent of the inventory goes waste.
The inventory available for the day is put up on the Nightstay app and website at nine in the morning. Starting then, you can book until midnight. Nightstay has tie-ups with 800 hotels across 12 cities.
The rates you can get at Nighstay are at least 25-30 per cent lower than you would on the hotel’s website. Sometimes, if the supply of unutilised inventory is high, discounts can soar to 40-50 per cent or more (see table).
The Nightstay management ensures the rates on their platform are lower than those offered anywhere else. “If a hotel wishes to be showcased by us, it must give us the lowest rates. We check regularly the rates that others are offering for the same hotels. If the prices they have given us are not the lowest, we send a notification. If the hotel still doesn’t make amends, our system stops displaying it on the app,” says Khan.
Until recently, one limitation of the Nightstay app was that you could book only on the same day. Also, your stay can’t extend beyond three nights. “We target the unplanned traveller. Our experience has been that unplanned travel does not generally extend beyond three nights,” says Khan. Lately, they have relaxed their rules to permit bookings one day in advance. But in that case you must book for at least two nights.
Quote your price: Nowadays, some hotel booking apps even allow you to quote the price you wish to pay for a hotel room. Findmystay lets you do so through what is known as the reverse bidding model. Customers first enter the date of stay, city and sub-location, and then state the price they are willing to pay for a room.
If you are a novice traveller or unfamiliar with the destination, you would wonder what the average rate of a hotel room in that city and locality is where you wish to stay. To overcome this problem, Findmystay has provided a tool called ‘price slider’. “It tells you the average cost of the hotel room in a particular locality and of a certain star quality. You can then quote a price lower than that. But, of course, you should not quote one that is ridiculously low,” says Simran Sial, co-founder, Findmystay. Next, you get a list of hotels that have accepted your price, and you can choose from these. Sial says travellers can, on an average, get a discount of around 30 per cent through the platform. Findmystay covers about 45 cities and offers accommodation in 4,000-odd hotels.
To get a good rate, it is advisable to book in advance. “Rates are lower when a lot of inventory is available and move up as it diminishes,” says Sial. He adds that customers are usually able to get a good discount by booking seven days in advance.
Big discounts for small businesses: Large companies have their own travel desks. Since they can promise large volumes to hotels, they are able to negotiate good discounts. Smaller corporates don’t command the same heft. Therein comes Savvymob. “We aggregate the demand from a number of smaller companies and offer it to the hotel. If we offer 10 of our clients to a hotel, it offers us better rates,” says Bikram Sohal, chief executive officer.
He adds that they are able to get a price at least 20-30 per cent cheaper than what is offered by an online travel agency. Savvymob now has tie-ups in at least a hundred countries and can offer its customers an inventory of about 300,000 hotel rooms. These apps get you rooms spanning the entire spectrum from budget to luxury and at both business and leisure destinations.
Ensuring quality: Besides a good price, another aspect that worries travellers is whether they will have a quality experience at a hotel. Many of these platforms have tied up with TripAdvisor and offer its ratings of hotels on their app and web site, which you can consult. They also check the hotel’s standards before signing it up. “We have a checklist of 20-25 criteria. Only if a hotel passes them all do we bring it on board. Further, if we get two or three complaints about a hotel, we drop it from our platform,” says Nightstay’s Khan. For these players, ensuring quality is a paramount concern since about half of their business comes from repeat customers.