Travel and tourism, two of the hardest-hit industries in the Covid-19 pandemic, are slowly starting to show some signs of recovery. Now, OTA Insight — a company that builds business intelligence tools for one of the key sectors in that space, hotels — is announcing a round of funding as it too picks up more business on the upswing.
The company has raised $80 million, a Series B led by Spectrum Equity, with previous backers Eight Roads, F-Prime Capital and Highgate Technology Ventures also participating. OTA Insight is not disclosing its valuation, but for some idea of its size and operation, it’s used today by some 55,000 properties; and it has been profitable for years already, including through the pandemic. Founded in 2015, prior to this, OTA Insight had only raised $20 million.
The plan will be to now use this injection of cash to drive more business in what is still a very untapped market, said CEO Sean Fitzpatrick.
“One of the unique things about the hotel and hospitality industry is that generally tech providers focus a lot of their energy on the larger chains, because that’s where they believe the opportunity is,” he said. “But if you look at the addressable market, there are over a million hotel properties, while there’s only about 70,000 chain properties… We have a really good spread between independent family run businesses all the way up to the global chains.”
As big data analytics continues to mature as a discipline, and different sectors become increasingly digitally savvy, we have seen a number of startups emerge with tools catering to specific verticals, company sizes and use cases. (Just earlier this week, Pigment — which provides better forecasting tools to finance teams that have been muddling through with Excel — raised $73 million.)
In the case of OTA Insight, its opportunity is to tap into a group of users — hoteliers — that not only are under new kinds of pressure in terms of the business climate, but have been shifting to, and are now willing to invest in more, digital tools to help them weather that new climate in a better way.
“We see this amazing opportunity, because even though the headlines [for travel] are not great in terms of just the the trajectory of the pandemic, I think over the three to five year horizon, people are really optimistic about travel rebounding, about people’s desire to get out there and have experiences again,” Fitzpatrick said. “We’re seeing really significant inbound interest in terms of investment in hospitality technology, but we’re seeing hotels also really evaluate their own tech stacks, looking for opportunities to maybe do things differently. Things have changed pretty profoundly in the industry, so that’s presenting a very significant opportunity.”
The gap between the interactions that hotels have with their users, and what they understand about those users’ intents is pretty huge. One one side, they check them in, provide them a place to sleep for the night, and potentially lots of other services. On the other, they generally don’t have a lot of visibility into what those users want, or have been searching for online, which sometimes results in a booking with their hotel, and sometimes does not. Direct experience of that was, in fact, some of what drove the founders to start the company: planning a trip to London from Belgium for the Olympics in 2012, Gino Engels and his friends couldn’t find any hotel rooms that weren’t painfully expensive. And yet after they arrived they could see that a lot of hotels had spaces and were drastically dropping prices. They saw that there had to be a better way of managing that.
OTA Insight today provides various business analytics and BI tools to hotel operators — variously called Market Insight, Rate Insight, Revenue Insight and Parity Insight — to help them figure out how to price and manage room availability, which can in turn be used for their own direct sales, and to manage sales through third-party channels. For now, the company doesn’t resell its tech through aggregators like Booking.com or Airbnb, although you might imagine that one day that could also become an opportunity to expand business, as those platforms also look for better ways to serve their hotel customers.
Part of the Series B will be used to continue investing in OTA Insight’s technology stack.
“We are very excited about the response from our customers to our latest products and innovations,” said Gino Engels, OTA Insight’s co-founder and CCO. “With this investment we will accelerate our expansion across all regions in 2022 but particularly in the Americas, where we have seen an incredible recovery.”
Steve LeSieur, an MD at Spectrum Equity who is joining the board with this round, said that bigger market potential is one big reason his firm invested now.
“OTA Insight is at the forefront of delivering real-time insights and broader commercial decision support to an industry that is quickly adopting dynamic intelligence to remain competitive and optimize performance,” he said in a statement to TechCrunch. “We’ve been impressed by OTA’s growth over the last several years, including during the pandemic, resulting in a very strategic customer footprint across the global hotel market. We think the business is very well positioned and just getting started.”
via https://www.aiupnow.com
Ingrid Lunden, Khareem Sudlow
