Startup pitch: Bellhop widens mobile concierge beyond hotels
Bellhop has been set up to bring hospitality and travel-related services to travellers seeking on-demand services via mobile. The startup believes the hospitality industry has fallen behind as travellers want instant gratification and personalisation. It points to research revealing more than 90 of hotels globally don’t have a mobile solution. As well as helping the hotel industry step up to meet traveller trends, the startup also wants to tap into the home-rental segment and bring local services to users of companies such as Airbnb and Roomorama. Bellhop, which is led by founder and chief executive Payam Safa and chief technology officer Blue Thomas, has raised seed funding from founders, friends and family. The startup is going after a market of more than $100 billion which includes transactional commission-based revenue from all service providers (transportation, restaurant reservations, food delivery, tours and activities bookings, shows and events bookings), and subscription fees from hotel partners. Core users are millennial global travelers, also known as Generation Y. “By 2020, they’re set to account for nearly half the workforce, and are already on pace to outspend baby boomers by 2030. Millennials are children of the computer era, so they expect everything to be available anywhere, anytime with a high expectation for convenience and personalization. “They spend $3,217 per trip, taking 4-5 trips per year, while 66 consider travel a very important part of their life.” Rivals in the space include the likes of Magic and GoButler which are trying to solve the “concierge” problem through a SMS-based platform handling any type of request. Alice is focused on building a full-service hotel solution with deep integration into hotel systems. Mygola is an on-the-go trip itinerary planner providing the capability to book tours and things-to-do in a particular city. Triposo is a city guide app that integrates with Viator for tour & activity bookings. The Fodors app takes its offline city guides into a mobile experience, has a select list of cities available and is a paid app. Bellhop is hoping to draw revenue from commission on transactions from service providers. Q&A with Payam Safa: What problem does the business solve? Bellhop brings together all transportation, food, and entertainment options making a traveler in a foreign place feel like a local. The joy of travel is immersing oneself completely in a new experience – new sights, new cuisines, and a new culture – without worrying about the logistics that come with travel in an unfamiliar place. No one really likes spending time figuring out how to get around, if the quality of food at a restaurant is good enough, how to have their laundry done cheaply, or how to access great entertainment options. Knowledge of the trendiest restaurants and bars, coolest things-to-do, and latest deals on shows & tours are often a result of very frequent visits or local friends – and cannot be found in guidebooks. With Bellhop, we give travelers instant access to the local trends and a finger on the pulse of the city. They can truly experience travel like a local. How did the initial idea evolve and were there changes/any pivots along the way in the early stages? We initially built the hotel platform allowing any hotel to become a service provider. After spending a few months acquiring hotel partners to join the Bellhop network and speaking with travelers, we realized the value in providing something travelers would want to use outside a traditional hotel. So we began building the “meta-service” infrastructure based on the core needs of travelers – food (restaurant reservations and food delivery), entertainment (tours & activities, and shows & events), and transportation (on-demand taxis and pre-booked car service) – and aggregated them together into a single mobile app. Bellhop is now the first “meta-service” personal concierge mobile app. This version of the app is being launched on-stage at the Phocuswright conference end of November. Why should people or companies use the business? Bellhop removes the pain of figuring out transport, eating and entertainment options when in a new city for the first time. People can now have the same conveniences of using all the apps they’re used to using when at home, with all services available in a single easy-to-use dashboard. Other benefits include:
- One account gives access to all services
- One credit card to purchase everything provides more security
- Use your preferred language in foreign places
- No need to research and download apps temporarily
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)? We have three primary strategies for acquiring users:
- Limited service accommodations (e.g. Airbnb and two-star hotels) have the ability to “outsource and offer their guests the same services traditionally offered by full-service hotels. Bellhop is effectively unbundling the hotel and offering these services on-demand from anywhere.
- Organic and paid direct-to-consumer acquisition strategies
- B2B partnerships with short-term rental marketplaces such as AirBnb, Roomarama, and PandaBed; airlines and travel companies (e.g. Delta Airlines, Kayak); and other travel communities such as Internations, ASmallWorld and CouchSurfing.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome? In three years, we anticipate to have Bellhop services available in most global metropolitan cities around the world. We foresee competition picking up in this space but hopefully having a first-mover advantage allows us to overcome those obstacles. What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out? The incumbent travel companies, predominantly Expedia and Priceline, are very focused on their same core businesses that are now over 20 years old, online hotel and airline bookings. These companies aren’t putting enough attention and focus on the changing landscape with millennials seeking access to all other travel-related services to be made available on-demand via mobile from anywhere in the world. The agency (OTA) model was based on the desktop computer replacing the traditional travel ‘agent’ that helped with booking flights and hotels before the travel journey. The Bellhop, or Concierge model, allows travelers to transact with on-demand services from anywhere using mobile devices, during the travel journey. Bellhop’s mobile-first strategy can disrupt the entire flow of the online transactional experience. What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style… and why? Airbnb because it is disrupting travel in the accommodation space while we’re going to disrupt travel in the service space. Which company would be the best fit to buy your startup, and why? Priceline because it has the tendency to purchase companies that are complementary to its core travel business. Describe your startup in three words? On-demand localized concierge. Tnooz view:
Mobile apps trying to fill in the space around hotel service is a hot space right now. The large hotel groups are already introducing keyless entry and access to room service and other amenities via mobile. Third parties such as Alice (Startup pitch here) and Conichi are also focused on creating a better experience for guests and better connectivity to the property via an app. It’s interesting that Bellhop has widened its remit beyond hotel internal services to tours and activities as well as to those using holiday rental accommodation. Not that long ago Tripster said its planning is to equip vacation rentals with an ipad pre-loaded with local tours and activities enabling hosts to earn ancillary revenue. All of these moves make for an exciting space but building scale will be a big challenge. Many established businesses today advise companies to first find customers to prove demand for a concept and it’s for a good reason. B2B partnerships with airlines, communities and companies such as Kayak will certainly help spread the word and hopefully attract volume. A further challenge will be connectivity to suppliers. The tours and activities segment remains fragmented so unless Bellhop is looking to concentrate on just the most popular tours, this will be an arduous process. It will be interesting to see whether Bellhop ends up focusing on just one area or is able to make something out of a wider offering including tours, restaurants, events and transport.