Back in April, we broke the story about Stayful, a new hotel booking marketplace website for boutique hotels. The stealth-mode company, led by former BuyWithMe CEO and Expedia exec Cheryl Rosner, had raised $2.4 million from Canaan Partners.
Four months later, Stayful is launching in beta mode. It’s rolling out access slowly to its list of 10,000 beta signups, but 100 PandoDaily readers can get early access via this link.
As we noted before, Stayful is designed to connect boutique hotels with new customers. Rosner has recruited a team of seven, including roster of travel industry heavyweights like Shariq Minhas, head of engineering at Expedia and Hotwire. The site counts Chip Conley, founder of hotel group Joie de Vivre, and Drew Patterson, founder of Jetsetter as advisors.
Rosner sees a gap in the market serving hotel owners. While sites like Expedia offer compelling deal terms to large chains, they don’t cater to the growing market of boutique hotels, a market Rosner estimates to be worth $13.9 billion in unsold rooms each year.
Stayful plans to attract boutique hotel owners by taking a lower cut of sales than other hotel booking sites and curating the hotels that appear on its site. Stayful will charge its hotels a 10 percent booking fee, which is lower than what Expedia and peers charge to small hotel owners. Those models value scale and high volume. One way Stayful will spread the word about its site to hotel owners is by allowing users to make bids on rooms for any hotel. When a bid is made, Stayful asks the hotel owner to join. Thus far Stayful has had a 20 to 35 percent conversion rate with adding new hotels this way, Rosner says.
“We’re selling perishable inventory,” Rosner says. “It’s the first step in a long view approach to tranforming the way people buy independent boutique hotel rooms and also the way people buy hotel rooms.”
The appeal to customers is through a unique realtime bidding process that gives them access to discounts and deals as well as unique hotel experiences. They can negotiate directly with hotel owners on pricing. Travel is a noisy category — consumers have no shortage of options to search for hotels. Rosner believes that no one has solved the problem of unused boutique hotel inventory because it is not an easy problem to solve. “It’s easy to discount everything in your hotel but it doesn’t really help what you’re trying to do as a boutique independent only wanting to sell inventory that would otherwise go to waste,” Rosney says. This is what the bidding process is meant to solve.
On the customer side, Stayful targets a specific kind of traveler that lands somewhere between a business traveler, gypsetter and jauntsetter. It’s people who want a step up from Airbnb, but not a chain hotel. Rosner describes the customer as a “self-directed traveler,” who is resourceful, savvy, rational, does their own travel research, expects value for their dollars, likes personalization, is influenced by their friends, takes more than five trips a year, and books travel within 30 days of the date. Boutique hotels appeal to them but pricing and convenience are also important factors.
Stayful launches in New York and San Francisco today and within two months will expand to five more markets. By the end of the year, Stayful plans to be in 16 markets include Paris and London, Rosner says.
Between heading up corporate travel at Expedia and starting Stayful, Rosner was known in the New York tech scene as CEO of BuyWithMe, a daily deals site. The company raised $31.5 million and bought six competitors under Rosner, making it the third-largest daily deals site after Groupon and LivingSocial. Rosner left in 2010; BuyWithMe and the entire daily deals market headed south not long after. BuyWithMe sold to Gilt Groupe as part of Gilt City, which eventually had to scale back itself.
Prior to BuyWithMe, Rosner was CEO and President of ticket reseller TicketsNow, which sold to Ticketmaster for $265 million in 2008.