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HSMAI Section: Day-use Room Bookability Comes to the Web

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June 30, 2016
HSMAI
John Burns - john@burns-htc.com

Some functions in the hotel business seemingly defy automation. Bed making is one of them. Being able to reserve a day-use room except by calling the hotel directly is another.

The market for day-use rooms  – guestrooms rented for several hours or a half day during daytime hours – is not new. It is a low profile but steady business for many properties; it requires low effort and it generates significant incremental revenue.

Online options to search for and reserve day-use rooms, or even the option to call a hotel brand’s central reservation center and do so have been lacking until recently.  

Quite simply, the central reservation systems used by hotel brands and virtually all multiproperty lodging sales organizations are designed to sell accommodation in multiples of 24-hour time periods. One can reserve a room for a day, or several days, but not for 10 a.m. to 6 p.m. on a single day. Consequently, day-use bookings could only be done by direct contact with the hotel which then creates the booking in its property management system – an accepted inconvenience until now.

The last several years have seen the largely-under-the-radar emergence of a handful of small companies intent on offering online search and reservation services for day-use rooms. This trend began in Europe and active vendors in that region include Between9and5.com, Bookadayroom.com, ByHours.com, DayBreakHotels, Dayuse.com and Roomforday. 

More recently, two North America-focused companies have entered the market – HotelsByDay and Recharge. The first group typically has more European inventory than North American; the second group is the reverse. In all cases, these companies are actively seeking additional participating hotels, including in the Middle East and Asia/Pacific.

The European established vendors are also making a big push and setting up new offices in key cities around the globe. In January of this year, Dayuse.com secured $15 million Euros ($16 million U.S.) in series A funding with some of that investment earmarked for expansion. “Dayuse.com is now present in 15 countries, counts over 2,000 hotels and 320,000 worldwide bookings to date,” said David Lebée, CEO at Dayuse.com.

“We soft-launched in the U.S. (in 2015) generating 2,000 reservations a month in New York City and are expanding the service to the five largest U.S. cities along with 10 new international markets in 2016.”
 
All eight vendors report growing volumes of reservations. What is the impetus? It appears to be a combination of two factors. The first is the convenience of access to a hotel room for less than the cost of an overnight booking. The second is the convenience of these new and simple “shop and reserve” facilities. Typically, these day-use reservation services offer the choice of using either their website or their app (usually available in both iOS and Android), a very streamlined booking process, generally no prepayment (payment at the hotel instead), no booking fee and immediate confirmation. Modifications and cancellations can be made until 24 hours prior, sometimes even closer to the time of arrival. 

“We live in a fast changing world. The ubiquitous use of technology, specifically smartphones, allows for an ever-more dynamic customer requesting greater flexibility,” said Yannis Moati, the founder and CEO of HotelsbyDay. “The nature of hospitality lands us in the very heart of the on-demand economy phenomenon. Providing for flexible short stays should be part of the solution towards greater flexibility.”

Convenience extends to the hotel as well. Participation enrollment is typically a simple online process. Thereafter, availability and pricing are managed using the website’s extranet. Since extranets pose a concern for some hoteliers, these companies are teaming with channel managers to automate both availability/rate pickup and reservation delivery.

The future looks interesting for these day-use booking websites. They begin to fix a broken, until now completely manual process. They give online exposure to desirable and typically inaccessible hotel day-use accommodation. They enable incremental revenue capture by hotels with little effort. And, these vendors can be expected to grow their website options – a couple already offer activity and meeting room booking options to supplement their core room offering. 

A dominant vendor has yet to emerge but the market is maturing and lodging brands are beginning to watch and assess the potential. This is going to get interesting.
 
 
John Burns is president of Hospitality Technology Consulting and he can be reached at john@burns-htc.com.
 
 
 
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