Special Report: On a global level, the hotel industry has followed a long-term trend towards booking systems that are operated by third-party channels providers.
But Aussie tech entrepreneurs Matt Taylor and Luke Young have spotted an opportunity for disruption with reZme – a new direct-booking platform for hotel stays.
For Taylor, the inspiration behind the idea was borne out by observing cost-creep in the booking process, during an eight-year career as Asia-Pac General Manager, Marketing for the NYSE-listed Choice Hotels group.
“What we’re trying to do is empower hotels to be able to take control of their bookings,” Taylor said, effectively reversing the growing influence of third-party booking channels.
“A lot of hotels are paying pretty exorbitant commissions now which are detrimentally impacting their bottom line and in turn guest rates.”
Taylor said there had been a push in the industry over the last three to four years to try and drive direct bookings.
“But we don’t think the tech capability has existed for hotel operators to 1. easily and 2. cost effectively be able to actually implement such a strategy,” he said.
“So there’s a disconnect there and our platform tries to overcome that. We give hotel customers the tools they need to be able to have a comprehensive, high converting strategy around that book-direct message.”
To push forward with its next phase of growth, reZme is taking expressions of interest (EOI) from investors on the Birchal crowdfunding platform until September 21.
Taylor and Young said the company was attracted to the crowdfunding method because it provided a pathway for retail investors to gain access to deals that were typically only available to sophisticated or high net-worth investors.
Another benefit is on the consumer side, where crowdfunding has proved to be a successful way for consumers to further engage with brands and products they like.
“Our service is aimed at helping the hotel industry, but it’s also beneficial for consumers because you’ll always get a better deal when you book direct through a hotel compared to third party,” Taylor said.
“We want to push that message and get people into that thought process when they’re booking, and if they are actively invested in that it will help everyone.”
Taylor said the company had already received commitments of $180,000 in the first week of the EOI process.
In addition, feedback from the Birchal team indicates the level of investment received is tracking significantly higher than the average campaign.
“I think that shows the value of our brand, and wanting to get involved. Our own website traffic — from both investors and prospective hotel clients — has also been through the roof, in terms of the interest we’ve created,” Taylor said.
Since launching in January, the company already has a 25-strong client base, many of whom came on board to help test the product and swiftly moved to become paying customers.
Young explained that on the product side, reZme added value by providing a streamlined content management system, booking engine s and access to all digital marketing tools under the same roof.
“When we assess a new client’s current systems, often we find they have about 10-15 different logins across multiple platforms. So now they can go to one central location and manage their website, bookings, email marketing, social media and all other channels,” Young said.
“So it’s a much more productive experience from an admin point of view, which flows through to a better front-facing service for end users.”
While noting that travel and tourism has been one of the hardest-hit sectors by the COVID-19 pandemic, Taylor said it also provided a silver lining for reZme as hospitality companies emerged from the crisis.
The company’s platform utilises a monthly subscription model, where clients can already see the cost benefits when compared with trailing commissions paid to third party channels.
“I think what’s come out of the crisis is that hotels have recognised the need to reassess their cost base,” Taylor said.
“And the biggest impact to their cost base over recent years is the increase in commissions they’re paying to third party travel agents.
“So our ability to come in and drive an engaging strategy around direct bookings has really helped. And in that sense, we haven’t done a lot of outbound marketing with hotels – they’ve wanted to talk to us.”
Looking ahead, Young said the company’s focus for the next six to 12 months was to establish its business model in the Australian market – particularly given the ongoing complications around international travel.
However, both founders believe the model is globally scalable with no direct competitor.
“In terms of the global opportunity, we’re taking our time there to ensure we set up the right partner network, and build out our knowledge in those spaces,” Young said.
“But it’s obviously a big opportunity, with an addressable market of 700,000 accommodation providers globally. In Australia we’ve got around 7,000 properties we can target at the moment.
“So it’s definitely a medium-term opportunity, after those initial six to 12 months when we’ve built out the remaining aspects of our platform.”
For more information about reZme and their equity crowdfunding raise, visit www.birchal.com/company/rezme
This article was developed in collaboration with reZme, a Stockhead advertiser at the time of publishing.
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