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Hotel Tonight — A Mobile App Exception to Commoditization

 

Anyone who’s read my writing knows I’m hopeful and at the same time very cynical of many internet trends that are sweeping our industry, particularly internet-driven room sales. Selling inventory through online channels whose primary purpose is to offer customers the cheapest price can severely weaken customer loyalty and brand identity. The term I use for this is commoditization and mobile apps aren’t excluded from this issue.
In short, without emotional factors to differentiate one brand from another, it’s a race to the bottom. My greatest fear is that one day consumers will only bid for the lowest cost per room and disregard the rest – rooms becoming a commodity traded on the open market in the same way as minerals and agricultural produce.
There are many factors driving the industry down this road, but there are many exceptions as well. The World Wide Web is here to stay, so despite my bickering, I’m always on the lookout for internet-based solutions that will actually work to boost long-term revenues, brand recognition and loyalty. I’ve highlighted some of these in the past and today I bring you the mobile app Hotel Tonight (http://www.hoteltonight.com/).
I’ve known about this piece of software for awhile now, but couldn’t properly lend my two cents until I’d actually used it. At the behest of my Millenial son, I gave it a try for my Labor Day weekend travels.
As implied by its name, Hotel Tonight, only available for Apple and Android mobile products, is a same-day, last-minute reservation program. Hotels upload leftover, unsold inventory to the system at noon and customers can then only book rooms for that night, albeit at a fraction of the cost incurred through regular travel agencies. From there, guests can choose to extend their stay by one or two nights.
Founded in 2010 out of San Francisco, the app is now live for over 50 major metropolitan regions and airports in the United States, Canada and the United Kingdom amounting to over 1,500 properties. Hotel Tonight’s layout keeps it sleek and simple with limited information and clutter to make for faster purchases. Additionally, the company curates hotel profiles itself unlike other online booking sites. And as of the end of August 2012, the app has garnered over three million downloads across all platforms.
At first glance, you’d think that the functionality of this app is directly in tune with my rant about commoditization. Hotel Tonight is a flash sale channel. But it’s imperative for this argument to consider the mentality of consumers who will use Hotel Tonight.
These are people who are already planning to travel, or are perhaps well on their way, and haven’t booked a room yet. Consumers with preexisting allegiance to one brand or another will go through the major chain’s own channel to complete their reservation. I sought this app out for a trial run, but I’d imagine it to be quite suitable for whimsical or desperate travelers as well as those who are principally deal-savvy.
For the latter, you’re dealing with the constantly-cross-comparing crowd; people who aren’t easily wooed into loyalty because it’s ingrained in their mentality that a better deal is always on the horizon. I likened this psychographic to ‘hotel mercenaries’, perpetually buying their itineraries from the lowest bidder. True, you’ll add some short-term revenue from these consumers, but don’t expect conversion at the drop of a hat. Mind you, this psychographic is always heavily social media-savvy, which means that you’re bound to receive an influx of tweets, likes, posts and check-ins, only for the night they stay with you though.
The former is where Hotel Tonight has real promise. A good question to ask in this analysis is: “What sort of person leaves travel plans to the day of departure?” Spur-of-the-moment vacationers, adventure-seekers, those traveling due to an emergency, procrastinators and all those in-between. The thought of not having a bed before I arrive in a foreign city is enough to give any boomer like myself an aneurysm, so rest assured, it’s predominantly a young person’s game. The much-vaunted example of Hotel Tonight’s usage is for when you find yourself out partying with your friends in New York City well into the night and suddenly need a room – not exactly the portrait of someone there on business or traveling with his or her family.
But this is the exact case where Hotel Tonight serves to benefit your property. Other book-well-in-advance online travel agencies (most of them are on this list) can act as direct competitors for your own reservation portal, but this app operates in a niche where prior loyalty and brand awareness are a negligible part of the equation. If consumers were already faithful to your hotel, they’d call ahead or visit your website first; the reason they’re on Hotel Tonight is because you’re sold out!
Converting first time customers into repeat visitors is always a gamble that’s exponentially more dependent on the onsite experience –in-room features, amenities and guest services for example. Hotel Tonight is another tool in your arsenal to get them through the front door. Such guests may become loyal and praise your name, and then again they may not. But, these are unsold rooms you wouldn’t likely sell otherwise, so you might as well try and offload them while also increasing your brand exposure. Hey, you never know, right?
(Article published in eHotelier on September 24, 2012)

Larry MogelonskyHotel Tonight — A Mobile App Exception to Commoditization