Empowering independent hoteliers in Europe

Our investment in Amenitiz

Yesterday, we announced that we, at Point Nine, led Amenitiz’ 6.5M€ (!!) Seed round alongside Backed. TechCrunch wrote about it here. A few great angels from the Spanish SaaS ecosystem also joined the round like Avi Meir, CEO at TravelPerk and Albert Alabau, CPeO at Typeform. We’re also happy to announce that JC Taunay-Bucalo — who started his career 10 years ago at Vend, one of the first P9 family members, and who is now the CCO of TravelPerk — is joining the board alongside Arthur Waller, the founder of Pennylane.

From our investment in Clio 10 years ago in the legal industry to our most recent one in Graneet in the construction industry, it’s now no secret that we, at Point Nine, are big vertical SaaS fans. We believe that they can be great businesses (with the potential to have efficient unit economics, high market share and less competition than their horizontal counterparts) while bringing significant value to (oftentimes) under-digitized industries. Our investment in Amenitiz sounds like a good occasion to speak about the hotel industry. Let’s get into it :)

A few key figures about the hotel business

In Europe alone, there are close to 170,000 independent hotels and over 350,000 bed and breakfasts like the one in the photo below.​​

In France, independent hotels with less than 50 rooms actually represent 90% of the market. From a first glance, one might think that these establishments have been around forever and that the way they do business hasn’t changed much. However, the way they find new guests has dramatically shifted over the past 10 years since the emergence of online booking platforms like Booking.com and/or Online Travel Agencies (OTAs) like Expedia. OTAs’ market share in independent hotel bookings actually increased by 50% between 2013 and 2019 and now represent up to >70% for some of them. In other words, if you speak to any hoteliers today, no matter which generation they’re from and how loyal their clientele is, they’ll always tell you that they have no other choice than to be listed on OTAs.

Now, if we take a step back to look at the broader landscape of software for hoteliers, it has grown and evolved quite a bit. Initially, the desire for hotels to digitize their property led to the creation of the Property Management System (PMS) market. This market has existed for decades but interestingly, the penetration of the cloud remains fairly low (under 30% in certain markets). Hoteliers’ need (or desire) to be listed on distribution platforms like Booking.com led to the creation of the Channel Management market. Their willingness to advertise their property outside of these platforms led hoteliers to spend significant amounts of money to develop their own custom website with a booking engine, allowing users to book directly online and allowing hoteliers to avoid paying what they sometimes call the “Booking.com tax”.

The evolution of this ecosystem happened as new technologies matured and as the distribution paradigm shifted but, it also happened in an uncoordinated way such that hoteliers deal with sometimes very old platforms that cannot speak to each other. The slide below explains it well.

Enter Amenitiz: the all-in-one suite for independent hoteliers in Europe

Amenitiz bundles each of the above tools into a very easy-to-use platform that’s significantly cheaper than the sum of the prices asked by each of the point solutions above. Amenitiz then becomes the one and only software that hoteliers use every day (not to say every hour). On Amenitiz, hoteliers manage their property, their online presence, their bookings, their payments and soon will be able to manage every single aspect of their operations.

Our thesis

Bundling makes for a 10x product

There’s a theory in the VC industry (that we owe to Marc Andreessen) that there are “only two ways to make money in business: One is to bundle; the other is unbundle.” While we often invest in businesses that unbundle large on-prem incumbents (like Salesforce, Microsoft or Adobe), Amenitiz bundles all the existing pieces of software that a hotelier needs in one. It helps them provide a much better experience for their users, with no integration pain and a single interface. Intuitively, doesn’t it make sense that the interface to manage rooms communicates seamlessly with the interface to book them on the hotel’s website?

Bundling makes it cheaper for clients while creating better unit economics

Offering all features in one, Amenitiz can also afford to be significantly cheaper than the sum of the price asked by the software they replace. And they can afford it while keeping very efficient unit economics despite their low ARPAs, putting modern SaaS GTM tactics in place (a very efficient outbound machine) and benefiting from a very low churn linked to the importance of their software in hoteliers’ daily lives. When we looked at the previous generation software, we were astonished by the low penetration of the cloud (< 30%) in certain markets and by the fragmentation of the software landscape(s) in each market (PMS, CM, Booking Engine). There are tens (if not hundreds) of small (often regional) companies developing a PMS in Europe. One theory is that none of them has managed to have good enough unit economics to scale because they were selling only one part and had to go onsite to install a server. Amenitiz sells all parts, in the cloud, from Barcelona :)

Developing the product suite to improve (even further) unit economics

While Amenitiz is already hoteliers’ main interface, the company has an endless roadmap of additional features they can develop to keep on providing more value for their users. Most independent hotels did not have access to revenue management or modern marketing suites before. By bundling them into one platform and making them very easy to use, Amenitiz could democratize access to certain products that hoteliers never used before, increase its ARPA and improve (again) their unit economics.

Layer in financial services to improve (even further) unit economics

As our friends at Base10 explain well in this post, layering in additional financial services on top of the software will significantly increase the ARPA and the TAM for Amenitiz. It will also improve (again) their unit economics. Amenitiz is already processing payments but they’re in a good spot to offer many more financial services to hoteliers. If we dream very big, they could actually become the hoteliers’ bank further down the road!

As a summary of the three points above, our thesis here is that while acquisition costs often grow as vertical SaaS companies scale and reach later stage adopters, these should be more than compensated by the growth in the ARPA and lead to unit economics that would end up improving at scale. Not so different than what we often see in B2B marketplaces!

Reach high market share and reshuffle distribution?

Some vertical SaaS companies like Doctolib or DocPlanner have proven that they can reach a very large market share in certain countries (up to 30%). Our thesis is also that a superior product and a very efficient GTM will also enable Amenitiz to reach high market shares in every European market. The higher the market share, the larger role they’ll be able to play in the broader distribution of hotel rooms in Europe. Travel accommodation is a $600B (!!) market worldwide and Global Distribution Systems like Amadeus are ripe for disruption.

Built by hoteliers for hoteliers

Amenitiz’ product and this vision are the result of the first-hand pain experienced by Alexandre and his wife Emmanuelle, as they were working on digitizing the hotel of Alexandre’s parents in Switzerland. Like often in vertical SaaS, there’s no better team than industry insiders.

Welcome to the P9 Fam, team! We look forward to supporting you on your long journey to turn the hotel market upside down 🏨.