Pedro Colaco was working in Dublin for Corvil, a software startup, and traveling frequently on business in 2005 when he discovered that finding midprice, comfortable hotels was something of a challenge.
It set him thinking about the travel industry and technology opportunities.
At the same time, he was exploring for Corvil the trend toward user-generated content as part of the company's software development efforts, and so he spoke regularly with Filipe Tappenbeck, a senior product manager at Corvil who was focused on user-centric issues.
Tappenbeck's family, it turned out, was involved in the hotel industry, and Tappenbeck was experienced in the technology challenges that middle-market hotels had in creating an online presence.
Filling the technology gap
The pair founded GuestCentric, a company that is trying to fill the technology gap that exists for small to midsize hotels by helping them quickly and economically create websites that not only display their offerings but help travelers book directly with the hotels.
"In the summer of 2006 we decided to take a break [from Corvil] and do a market survey of what the hotel industry needed, and found quickly that while four- and five-star hotels were served well with technology and systems, the three-stars and below didn't use technology much at all," Colaco said. "We also saw that vendors who do provide software solutions were mediocre, at best. So we saw a huge opportunity there."
The company made its formal launch in June with what Colaco described as a marketing and distribution platform that would enable independent hotels to compete with larger hotels for consumers without spending large amounts of money.
Colaco and Tappenbeck focused on independent hotels with 100 rooms and below, and studied the pain points there, Colaco said.
"We found clearly that the biggest gap in hotel technology was their use of online business and marketing channels. It was very weak. We interviewed about 300 hotel managers, found them pretty happy with their websites, but that was the only thing they had in common."
Addressing hoteliers' concerns
Colaco said all the sites he and Tappenbeck studied looked different and fewer than 50% had an online system or used the Internet to distribute inventory.
"So we asked [hotel managers] as part of our survey why they had not adopted online," Colaco said, "and their reasons all seemed to revolve around fear."
He said managers of smaller, independent hotels had a lack of trust of guest information from the Internet, worried about handling customer relations, worried about online bookers not showing up and worried about the sheer volume of information that might come their way online.
"They didn't think they would have time or staff to answer all the emails, and they were worried about overbooking: taking a reservation on the phone for a room while someone was making a reservation for that opening online," he said.
"Fortunately, those were all concerns for which technology had an answer," Colaco said.
Two things that have surprised those who have signed on with GuestCentric to power their Web marketing and distribution have been price and the speed at which they can have a website up and running.
"It's about 45 minutes to an hour to put up a basic site," Colaco said.
Hotels can elect three levels of service, starting at $70 a month and rising to $500 a month for premium services, Colaco said.
GuestCentric started pilot projects a year ago. One of its participating hotels has added $150,000 in bookings as a result of a trial, Colaco said.