On-Demand Hotel Rooms: A Conversation with HotelTonight (video)

HotelTonight is one of the marquee names of the local on-demand economy (LODE), which lets you book a hotel in three taps. We discussed the company’s business model and success factors with VP of product Amanda Richardson at BIA/Kelsey NOW (video below).

One of HotelTonight’s biggest challenges, like many LODE players, is growing supply and demand in balance and keep both sides happy. The magic is in aligning the user goals (immediate and discounted bookings) with hotel goals (yield optimization).

“We’re a marketplace, so you can’t pick a side,” said Richardson. “Our constituent is the market. And we want to do the best we can to get users great hotel deals and make checkout simple, while we make sure that we deliver hotels last minute bookings with easy to use tools.”

According to Richardson, its incentives are aligned with hotels in getting a margin on every booking. And hotels that benefit most are those that utilize its dashboard to push out their available inventory on a daily or semi-daily basis.

Users meanwhile get a list of the top 15 available hotels nearby at any given time, ranked by deal quality. This curated experience gives a sufficient sampling without the blitz of options and paralyzing “paradox of choice” that define many hotel and travel sites.

“We’ve learned that less choice is better,” said Richardson. “We’re a mobile company, users are on the go, and no one has time to sort through hundreds of hotels. We do that for the users, and we encourage hotels to give us the best deals so that they ‘get on display’.”

Simplicity is indeed the company’s prevailing design principle. We walked through the booking process, unpack the company’s business model, and look ahead to where it’s going next — including longer booking windows and curated weekend getaways.

The full session video is below and more to come from BIA/Kelsey NOW conference footage.