HotelOga, a cloud-based dashboard designed to help hospitality outfits get online presence free was launched to change how hotels use technology to increase bookings and save them on their digital marketing spend.
Founded by Marek Zmyslowski, a Polish entrepreneur who served as Jovago MD, with his friends Maciej Prostak and Szymon P. Peplinski and Damian Mariusz Dąbrowski with the backing of SpeedUp Group, the booking engine promised to offer an additional free domain and email hosting but miserably failed.
According to Havar Bauck of HotelOnline, HotelOga failed because it was designed to fail.
“HotelOga started about a year after us, inspired by our business model. They knew very well who we were, and we were very much aware of them. They saw what we had done, and wanted to refine the same concept with a state-of-the-art technology core,” Bauck told TechMoran. “They did that very well, at least as far as the technology was concerned. They were backed by investors, which we weren’t. Hence, they had the resources to built an excellent technology. Unfortunately, that was all they did. So in 2017, they had the technology, and no money. We had a profitable business model, and no technology of our own. A perfect match, right? Or so we thought, when they approached us, proposing a merger.
According to Bauck, HotelOnline did a thorough due diligence, and concluded that the merger wasn’t viable, as they had more debts than HotelOnline could possibly handle. Bauck says they had simply taken too many shortcuts, without thinking of the consequences. Luckily, one such shortcut, was that they hadn’t consolidated the ownership structure: HotelOga and their technology unit were two separate companies.
“HotelOga collapsed almost immediately after we pulled out of the merger,” he said. “We were still talking to the Polish technology company, though. With the toxic entity in Nigeria out of the way, the rest of the process was straight forward. The Polish company was called Hotel Online. Although we, as Savanna Sunrise were the acquiring party and the “big brother” of the merger, we adopted the HotelOnline brand and identity, as it was a better brand for the new company and concept we were building.”
Bauck says HotelOga collapsed because they only had an excellent technology, but no viable business model. HotelOnline now has the software as part of a bigger solution, and a profitable business model. Technology in itself does not help hotels increase their business. Technology applied as part of a well-planned solution, can. This is another part of the reason why the adoption of technologies for hotel management and distribution is so low, not just in Africa, but in emerging market in general. If hoteliers don’t see any immediate, guaranteed gains from investing in new technology, they will stick to what they know instead.
In this case, technology should be seen as a tool to streamline reservation management and distribution. When used right, they can provide significant gains. It is just like a hammer: You can use it to put a nail in the wall, and hang a beautiful picture there. Or you can accidentally crush your fingers with it!
“This is why we don’t just sell technology. We offer a whole solution with potential to change the way hotels operate,” he told TechMoran. HotelOnline is working to steadily improve the quality of its services, and a continuous streamlining of its operations. The firm is not planning any major announcements, sensational mergers or acquisitions, or bold expansions into new markets anytime soon.
“In the short term, our focus is squarely on consolidating our recent gains, to provide even better services to our clients (the hotels) and to their guests,” he said. “Technology used the right way brings in customers. I have seen many companies waste huge sums on technology for the sake of technology. Companies should always see technology as tools to achieve their goals. The decision-making process should always be to define the goals first, then identify the technology to achieve them.”
HotelOnline says it offers the lowest prices in the market to its SaaS customers and those who are able to manage their own marketing and distribution only pay a very low monthly fee. He added that the majority of its clients still prefer managed services, where it handles everything. For those clients, it charges a percentage of all the bookings it brings in. It requires that this commission goes off the hotel rack rates, and not on top of them, as the market is very price sensitive. It’s all about striking a balance: By keeping its commissions low, it ensures its hotel partners get value from the business, and that they don’t reduce their competitiveness by hiking their rates.
To him, AirBnB are not as different from the OTAs as they like to claim. They started from a different angle, and gradually grew into a direct competitor to Expedia and Booking Holding. They all do online distribution of accommodation services, and they are now increasingly seen as direct competitors. AirBnB initially launched with a singular focus on the home segment. The other OTAs have followed into that space, while AirBnB are now also moving into hotel distribution.
Regarding the home segment, Bauck says he merely sees that as an expansion of the supply side in a lucrative market. It is basically about individuals supplying hitherto unused accommodation capacity to an increasingly dynamic market. It is here to stay, and HotelOnline simply sees them as another category of suppliers. It is one of the segments it targets, and it’s experience with it so far, has been overwhelmingly positive.
“We help any accommodation provider working with us, compete for a bigger share of the market.,” he said. “Retention is out of our scope. This is really up to the hotels themselves. It is obviously a measurement of success for us that our partner hotels thrive, though. When our partner hotels build permanent guest relationships with customers they got through our services, that basically means that we are both doing our jobs well!”