HotelTonight CEO Sam Shank is the entrepreneurial force behind the disruptive app that Yahoo! thinks is a top travel trend for 2016. People use the app to book their hotel rooms a few days — or even a few hours — from check-in. The app lists pre-screened hotels in hundreds of cities, and it’s resonating with consumers because last-minute bookings usually mean lower rates for travelers. Hotels want full occupancy and they’ll offer bigger discounts closer to evening in order to rent out as many beds as possible. As an added benefit, the partnership gives Venture and VentureOne cardholders an extra 10 percent discount on top of other offers when they use the mobile app to book a hotel room.
“Our Venture cardholders get amazing value such as double unlimited miles on their purchase every day,” says Manan Mahadevia, managing vice president at Capital One, in an interview. “We just look at it as a simplistic way of getting value for cardholders who love to travel and we think this partnership creates that opportunity. Value such as getting unlimited savings through this promotion — 10 percent off — making sure these savings are on top of the miles that customers earn on their purchases.”
Living a life where the next trip is on a whim doesn’t mean you won’t have any accommodations. App users browse through a list of hotels in their city, and there’s an in-app concierge service for those who spend over $200. Shank says you can lock up a room in as little as three taps on your smartphone. Unlike airlines where plane tickets get more expensive the longer you wait, the opposite is true in the $144 billion U.S. lodging industry where patience is a virtue. Hotels drop their prices when it becomes apparent they’ll have empty beds for the night. The demand shortfall — and the lower room rates it entails — is relayed to a growing army of bargain-hunters who are patient enough to get a better deal on their accommodations. It’s kind of like a self-adjusting market where the seller and buyer get something in return: the hotel increases their occupancy and (on-the-fence) travelers save more cash.
“With hotel bookings, it works the opposite of flight booking where the price increases the longer you wait,” says the 43-year-old Shank. “Generally, with hotel booking the longer you wait the better deals you get — there are a number of dynamics in the industry that make that happen. But from a consumer’s standpoint, that’s what the takeaway is.”
So how much savings can you get through HotelTonight? It depends on how late you book your hotel room but it currently averages to 17 percent on the app. “On the savings side, when we look at HotelTonight versus other ways of booking at the last minute, then we’re comparing apples to apples in that case,” says Shank. “Our average savings is 17 percent versus what you would book using other channels.” The Capital One partnership lets Venture and VentureOne cardholders enter the code “Venture” to unlock the extra 10 percent savings in addition to HotelTonight’s discounted rates. Cardholders will continue to earn mileage through their rewards program. For Venture cardholders, that means they’ll keep on earning unlimited double miles while VentureOne customers will continue to earn 1.25 miles on every purchase that can be used on any airline, any flight, anytime.
So why is mobile technology significant for the travel industry? Studies show that apps are overtaking PCs in the way people make reservations. Mobile is also a popular customer touchpoint, especially among Millennials, and this generational cohort has recently outnumbered Baby Boomers in the U.S. These trends are stirring up a perfect storm, and Shank has said that he plans to take HotelTonight public, perhaps in 2017. Except for big successes such as Uber and Airbnb, it’s been challenging for tech firms to stand out from the crowd but we could be witnessing another unicorn in the making.
