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Hostelrocket Re-launch

Adam Murphy
Written by Adam Murphy

Positive Summary
Providing operators with a direct booking platform.

Not So Positive Summary
No inventory. No real benefit to customers. Insufficient fee FREE period for operators. Product needs more refining. Poor search functionality. Lacking vibrant youthful aesthetics.

After the much anticipated re-launch (16th February) of I was surprised to say the least. Prior to the relaunch I had thought this model was promising and heading generally in right direction, however now I think it has taken a few steps backwards and this is why.

Minimal Value Proposition

They have moved away from 3 of the golden rule’s of OTA’s “possible” success, those being: 1. Provide customers with more inventory than your competitors. 2. Provide customers with lower than price parity rates or perceived better value.3. Avoid entering ppc bidding wars with large established OTA’s. Avoidance of these issues brings upon questionable values to both their users and their customers.

It’s Expensive for Most

It would seem they now only list properties who have paid the $200 a month listing fee (90 day fee FREE period) to receive direct bookings, which is fair and understandable from perspective. This could be comfortable for operators who are getting familiar with flat fee services such as channel managers, however this reduces inventory down to virtually nothing for the customer. For example, when I searched for a hostel in Sydney, the closest listed property was in Brisbane (1000km away). This is very disappointing, for the obvious reason you are giving the customer no options, especially for a backpacking mecca and gateway city like Sydney.

This also diminishes their retention, as they have no reason to return to your service, as they would have previously rendered the service pointless. I would be concerned about an seeing any type of ROI for those early adopting operators that did take the gamble and listed. I am a big supporter of new disruptive technologies, but this feel like the same old model with a little makeup and I fear will have no other option then falling into a bidding war to attract customers which they are destine to lose without deep pockets.

Their Marketing Angle is Obtuse

OTA’s aren’t the competition, Google is (and trust me I love Google). They don’t make $70 billion a year in Ad revenues by businesses acquiring customers free of charge so the only way to beat the biggest established OTA’s is to remove Google from the equation. in my opinion does not yet have a practical solution that avoids the Google machine to acquiring customers, which doesn’t mean they won’t get bookings, just means they won’t get many. This doesn’t even take into account the other paid-search options out there.

I know what would say, “We have unique social marketing techniques” (yeah, yeah, heard that one before) and “We offer operators direct bookings” completely neglecting the fact customers aren’t interested in what the breakup of the total bed rate is or who get’s what commission, they care about finding the most cost effective booking.

Indeed, they are putting forth massive efforts on their social media and content marketing, and doing exceptionally well on the engaging side. They really get people to respond and open up, especially on Twitter and Instagram. The financial return of these efforts are almost impossible to measure in the short term and difficult to measure in the long run. Do these countless hours spent to build content and engage these potential customers lead to any bookings? Especially now, when the inventory is limited? There is a point where the return will have to be measured, and perhaps put the resources towards adding inventories instead.

Basically does not currently have enough inventory and doesn’t offer the customer any discounts or perceived better value, so why would customers use there service let alone return? You have sites like with 100 times more inventory, price comparisons offering a perceived discount and even they still struggle to attract customers because there platform only resells other OTA’s.

Just to be clear I really thought was on the right track and still hope they can refine there model making it more attractive to both operators and customers and I believe this can be done. As I have said before the current OTA’s model has a shelf life, when that ends is left in the hands of those who create new disruptive technologies that find the right balance of between customers & operators.

Important: Please note the author of this article does not currently or has previously worked directly or indirectly for the companies listed above or for there competitors.

About the author

Adam Murphy

Adam Murphy

I started backpacking when I was 17, after the initial taste I completely fell in love with the industry and couldn't imaging doing anything else, backpacking runs through my blood. The figures tell the story. I have spent over 3000 nights in more than 250 backpackers over 14 years.

I have run hostels from 100 beds to mega hostel with 530 beds add to that motels, hotels, resorts, a tropical island, travel agencies, airport transfers service, information centers and once upon a time was in charge of the largest network of independent hostels in the world.

My passion & goal is to see the industry evolve and innovate!

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