Bidroom landing page
When was the last time you really compared the prices you pay for hotels stays? If you are like most people, time is never on your side, and loyalty or brand awareness simply must play a role in your travel decision making processes. A Dutch startup a friend recommended, Bidroom addresses several problems caused by OTAs, and by the fragmented hotel booking space. A brief test of this service leaves me wondering how come 50,000 hotels aren’t in the system. Here’s a look at Bidroom, the OTA killer.
Update: Moments after having posted this story, Bidroom sent me offers via Email from St. Regis and from the Marriott Hotel West. Both offers came in at least 5% less than either Booking.com or Hotels.com.
As you can see, Bidroom makes joining painless, I signed up in about 20 seconds and was searching instantly
Search results for a hotel search anywhere on the world can be a mighty frustration. Metasearch can shorten the painful experience for users, but the price disparities and comparing apples with oranges still bends the mind. The whole framework of current meta-OTA booking is flawed. Not only do the OTAs aggravate the search process, commissions and fees are beginning to cut into the bottom line for hoteliers – in short, the guest pays at both ends of the transaction. The startup I mentioned, Bidroom turns this guest-search dynamic upside down. Let me try and explain how.
Within a minute this offer came in. The St. Regis price here was at least 5% lower than any OTA
In an Expedia hotel search, or even normal meta-search, the user enters in criteria like destination, dates, and other preferences into the system. Then the potential guest is presented with an endless (but filterable) list of possible choices meeting those criteria. A rock bottom price has already been negotiated with each hotel, a commission rate for the OTA has been determined, and all the guest has to do is “trust” whatever system. The problems arise unbeknownst to the potential guest. Hammered down prices and high commissions absolutely result in deteriorated levels of service. Think about this. Pretend you own a hotel, then pretend you have to have washed 300 sets of sheets every day, 300 mints have to go on those pillows, and so on. You can figure out the rest, but Bidroom operates differently.
Instead of scarping up a big list of hotels that meet a guest’s criteria, Bidroom contacts hotels in a destination in real time, sending a request for their best price at any given moment. Every hotel in the system essentially bids on a guest, offering a dynamite price based on the hotel’s capacity to satisfy at that moment. What makes the system most interesting for hotels is, each property can see what the others are bidding. Then the hotels do the world of trying to offer the best price to each potential guest, over the ensuing 24 hours.
A Booking.com search for the same dates, same hotel
I told you Bidroom turned the model upside-down. Co-founder, Michael Ros talked with Emerce earlier this week about his company’s bid to enroach on the big OTAs. When asked about Bidroom’s business model (something I am interested in, here’s what Ros had to say:
“We charge hotels two per cent commission. This is significantly less than what the competition asks. Bidroom allows hotels the opportunity to give the customer at least five percent to even fifteen percent discount on their rate the OTA’s list. Hotels pay advance, without contracts with clauses like best price guarantee, minimum order quantity of rooms, etc.”
Thinking about what Bidroom is doing here, it’s actually quite brilliant. Instead of becoming a “marketplace” as in the case of Expedia’s recent strategy “Accelerator”, Bidroom applies itself as simply a tool. I guess I need to explain what I mean. Expedia, Booking.com, all the OTA’s are a matrix, massive databases created in the archaic way all legacy systems are – website centric, even if they are mobile friendly. Bidroom is simply a connective in between hotels and travelers. For all intents and purposes, the system is a complex algorithmic auctioneer, and nothing more. The savings in overhead alone… Well, you see the beauty, I know. As to “why” more people are not using the system, that’s pretty simple to understand too. Bidroom just relaunched recently, and there’s a lot of hotels out there to contact to climb on board. This says nothing for marketing and PR to let people know how they can save.
A quick metasearch reveals the same 5% savings with Bidroom
So far Bidroom has about 120,000 active users and a monthly growth of 22%. The bottom line is, Bidroom gives users an automatic discount on the lowest room rate on other booking websites. I tested this briefly before starting to write this report. As you can see from the screens I provide, Bidroom cuts a steep discount on a luxury hotel in Atlanta. Of course you can also see that the system does not have every city on board yet. The St. Regis in Buckhead, in Atlanta, is a superb hotel. I am from Georgia, and the price shown tells the tale.
Founded originally in 2014, Bidroom appears to have been boostrapped and crowdfunded. I could not find their funding sources on Crunchbase. The co-founders, Mark Bradshaw, Casper Knieriem, and Michael Ros, and the startup got some original coverage from The Guardian and some others, but no real news has come up of late. It will be interesting to see where the startup goes from here. One thing seems certain, if Bidroom does not fly, the concept certainly should.