The HotelsbyDay website, launched in the US four years ago, is coming to Israel. The website offers a concept of reserving hotel rooms by hour and in the middle of the day, for a 'quiet place to work and meet during the day.' The first association is with renting rooms as a romantic or sexual escape, but this solution is also designed for businesspeople or travelers who need the advantages of a hotel room for several hours in the middle of the day, for example travelers who are asked to check out by 11:00 AM when their flight is only in the evening and someone in need of a hotel room in order to prepare and rest before a meeting, without spending the night there.
The website's founder, Yannis Moati, was formerly a travel agent and later a tourism wholesaler. There he encountered demand from his customers for a place to freshen up after a long flight in order to prepare for a meeting. "The hotels weren't organized for this. Even hotels to which we sent many customers for a night gave us a hard time in finding a room for several hours during the day. I realized that there was a bug in the structured plan of most hotels: check-in at 3:00 PM and check-out usually at 11:00 AM. It doesn't sound logical to me that hosting at a hotel doesn't adapt itself to the guests in the way they do business.
"In 2014, I left my job and launched the website in New York with 10 hotels. Today, the website has 800 hotels (both large chains and independent hotels), mainly in North America, but also in London, France, Italy, Brazil, and now 20 hotels in Israel, too, in Jerusalem, Tel Aviv, Tiberias, the Dead Sea, Herzliya, Haifa, and even Gedera. Prices range from NIS 200 to NIS 700, depending on the hours."
"Globes": Israel is a very small market. Why did you enter it?
Moati: "You have to know the market in Israel and understand its advantage. We have competitors around the world with similar websites, but none of them opened the market in Israel. The main reason is the symbiosis in tourism between the US and Israel. As early as the first reservations made mainly by US tourists, we realized that we were right.
"This is an on-demand economic format, in which the digital platform supplies the demand through immediate access to products and services."
Moati says that 25% of the reservations are made a few hours before the date. In most cases, the format is a package of hours from 10:00 AM to 4:00 PM. "Most businesspeople check out at 8:00 AM, and the room stays empty, instead of earning more money. When they leave at 4:00 PM, the room can be prepared for guests coming in the evening. An empty room is a weak point. Even if the hotel has 100% occupancy before a conference, say, 20% will leave at 8:00 AM to start their workday. 30% of the guests won't arrive before 6:00 PM. This is a window of opportunity from which the hotel can profit." The website's business model relies on commissions that the hotels pay by reservation.
Another figures that arose from tens of thousands of reservations made on the website (according to the market in the US) is that 25% of the people making reservations live at a distance of 15 kilometers from the hotel when it is located in the center of a large city.
That is suspicious
"It's obvious that there are rooms reserved for romantic purposes, but that isn't the only reason. There are quite a few businesspeople living in outlying areas who want to work in private, or who are getting ready for an event, and don’t want to return home before that."
The price is important in order to make this arrangement worthwhile.
"The average price for six hours is $89 + tax. The average price for a room in the same hotel for a night is $170."
Who sets the price: the website or the hotel?
"If the hotels set the price by themselves, it will be too high. We set the right rate together with them according to the demand, location, and demography of the customers: business or recreational tourists. If it's mainly a business audience, the hotel can charge a more ambitious rate."
You are not really needed, because it is possible to pay more for late check-in.
"True, but most hotels charge an unreasonable rate for this - an average of $50-55 to extend check-in by two hours. We give six hours at a cheaper price. Our rate of reservations is 150 a day."
There are business lounges at airports offering a similar freshening service without payment for businesspeople
"Business lounges, the Starbucks branch, and the library all compete with us - any place where you can escape for a few hours. We're not worried about the competition, because the more solutions there are, the more flexibility there is for the consumers. Our problem isn't competition; it's awareness among consumers that such a service exists that can provide them with a solution for a few hours in hotel room in the middle of the day."
Published by Globes, Israel business news - en.globes.co.il - on May 22, 2019
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