Using Tech to pair last-minute travel with unsold hotel inventory: Turbulence interview with HotelQuickly’s Tomas Laboutka

Interview #10 with Tomas Laboutka, Co-Founder of HotelQuickly.

About HotelQuickly: Created in 2012, the founders of HotelQuickly saw that last-minute hotel bookings, while necessary for travellers, were largely underserved by the current tech offerings. Setting out in Southeast Asia, they created one of the region’s first mobile booking platforms. Quickly finding success, the company acquired Japanese app Tonight in 2016. Today, they’re continuing their push to provide travellers with last-minute hotels, and properties a place to list their nightly unsold inventory in Asia and beyond.

About Tomas Laboutka: Originally from the Czech Republic, Tomas set out early to disrupt, innovate, and support entrepreneurs. He co-founded HotelQuickly in 2012 and, as CEO, oversaw their growth from the start. He holds a Masters’ in International Management from the Rotterdam School of Management, Erasmus University and in 2015, Forbes named him a “30 under 30” for the Czech Republic.

Arturo: Where did the inspiration for HotelQuickly come from and what made you choose Southeast Asia?

Tomas Laboutka: Around 2009, I took notice of the nascent trend of mobile apps and their underlying business potential. At the time, their usage remained limited to mostly Europe and North America, although there was also a company in China making a big push into this medium.

Southeast Asia, on the other hand, was mostly under-served. However, mobile phones had already transformed the telecommunications landscape in the region.

Smartphones rightly had the potential to do the same by bringing internet to the masses in a way that hadn’t been possible up to that point. Concurrently, consumer travel trends in the region were undergoing a rapid transformation with more people travelling than ever before, corresponding to an increase in last-minute travel.

At the time, the local OTAs didn’t have any real viable mobile product. Contrast this situation with the US and Europe, where there were a handful of well-established players who also had advanced mobile platforms, and it made perfect sense to stay in Southeast Asia.

So we saw these two factors as a perfect opportunity to not only provide a unique and valuable travel product but to do so on a platform that would be the region’s primary gateway to the internet.

We took the gamble, and the rest is history. We rolled out the product within six months and scaled it within 12. More recently, we acquired Japanese app Tonight, which gave access into one of Asia’s largest markets and beyond.

Your base is in Singapore. How did you wind up there from the Czech Republic and What are the particularities of operating in that region?

I think it’s more accurate to say that my suitcase is based out of Singapore (laughter). Now, I mostly split my time between Thailand, Jakarta, Singapore and Japan, spending it with the various teams and our customers.

Concerning operating here, some of the most significant challenges come down to both technology and transportation infrastructure. While the region is rapidly developing, there’s still plenty of room to grow. For example, Jakarta not only has some of the worst traffic I’ve ever seen but there are many places on the road where you don’t have a proper internet connection.

So imagine trying to get to the airport on time, but you’re stuck in gridlock with no way to contact the outside world — you wind up losing half your hair. From a productivity standpoint, this lack of fully developed infrastructure is one of the most frustrating parts of operating in Southeast Asia. Likewise, each country has different rules and technology capabilities regarding payments, which for a company like ours, makes operations sometimes tricky.

Otherwise, there are the cultural differences — be it business practices, language barriers, etc. which certainly presents their hurdles. Of course, there’s also the personal aspect of being so far from home, meaning I don’t get to see family and friends often, but that’s part of the sacrifice that comes with pursuing an incredible opportunity.

Last minute hotel rooms are an important part of the hotel industry and represent one of a unique aspect of the sector — mainly that each day represents new inventory and each unsold bed is a loss. However, even though hotels want to fill these vacancies, there is often friction between the discount rate they’re willing to give to sell the room and protecting their brand’s reputation vis-a-vis price. What challenges did you face in conveying your value-proposition to hotel properties?

It comes down to understanding the consumer on both sides, whether it’s the end consumer, the traveller or the hotel — and respecting that relationship. In other words, it means recognising the free room that’s available and offering it to the traveller who is looking for it in a fashion that is not disturbing the other communication channels the hotel uses to sell beds; which is critically important when it comes to protecting their brand and pricing strategy.

In that sense, there are various limitations that hotels impose on when they can offer rooms to us; whether it be geographically bound or time-driven. On the other hand, properties might not care if their rooms are available on multiple platforms. Individual hotels and managers ultimately make these decisions, so there’s no straight-through nor straightforward formula for adapting to this particularity.

That said, while there are some outliers across the industry, the notion of price parity — i.e. the rate stays the same regardless of channel — comes into play. Understanding these dynamics lets us comprehend what our hotel customers want, allows us to build a close relationship with hotels, and enables us to provide them with another opportunity to sell their last-minute inventory.

You’ve recently moved on from your role as CEO at HotelQuickly. What’s next for you?

I’m still involved in HotelQuickly through the board and as an advisor. In these positions, I provide my input regarding strategy and how we can leverage the teams across the group to grow the brand and expand the partnerships that we’ve built. So for now, I’m still active and am always ready to help when I can since there’s perpetually room to grow and take it to the next level. I want to make sure that the company can succeed and I think I will always have a part in that sense.

What advice would you give anyone wanting to disrupt the travel industry? What challenges related to your business model did you come across at HotelQuickly?

Travel is a bit of a double-edged sword. On one side, it naturally attracts a lot of entrepreneurs and other venture-minded individuals. It makes sense because almost everyone travels and many see pain points that they inevitably want to solve. Many large companies in the sector are also trying to monetise this traffic and cure these pain points by consolidating the numerous verticals in the industry. Further these giant global firms — think Priceline, Expedia, etc. — dominate the primary distribution and sales streams for B2C travel products.

There are exceptions, of course, where local firms wind up building organic products that catch traction. Indonesia’s Traveloka is an excellent example of this case where they recently received investment from Expedia. Additionally, Ctrip in China has recently made numerous acquisitions to grow beyond their borders. However, there’s no doubt that these two big players are going to be fighting it out the most to gain market share in emerging markets and beyond.

Now, having said all that, I think what’s crucial for anyone entering the travel industry is to find not only an unsolved pain point but to make sure that it’s one that potential customers see and then solve it for them in a unique way. The solution also needs to have solid foundations and must be internationally scaleable.

Of course, it’s easier said than done. In addition to the giants mentioned above, Google and Facebook are also making their push into the travel space, which, combined, takes a lot of inventory off of the market.

Further, the highest share of travel bookings are still happening offline, and it’s important to figure out why: is it because of the relationship and trust held with the travel agency, or is it due to a technical issue that prevents some form of uniform distribution? It could also be a question of managing payments properly. In that sense, while there are still plenty of opportunities out there, creating the right product or products to take advantage of it will be the biggest challenge for anyone looking to disrupt the travel industry.

In general, (and this is a question we’re asking all of our interviewees), what do you see as the biggest challenge facing tourism and the travel industry today?

First, I don’t think there’s such a thing as a global travel market. I believe all the opportunities and challenges lie in each local market; whether it’s a sourcing one or a destination. Whenever we see any success in the travel industry, it always starts in a specific market and then building up from there globally.

Second, the distribution systems in use today are overwhelmingly prehistoric. It’s puzzling because the information contained in them isn’t complex but looking around at the various channel managers across the globe, there’s a wide variety of often antiquated standards. Many of those players, particularly the Global Distribution Systems are aware of this, and they will no doubt face disruption.

So put together, the travel industry will need to figure out how to both start locally but interact globally with standardised data formats. If you throw in having to meet an audience that wants increasingly tailor-made travel, the industry has its work cut out for them.

Originally published at www.kantox.com on December 21, 2017.