Hospitality tech startup ZUZU Hospitality Solutions partners with Revinate to help hoteliers obtain guest feedback for free. We get the lowdown on the latest boutique hotels industry trends in APAC with ZUZU Co-Founders Vikram Malhi and Dan Lynn.
By Joanne Leila Smith
ZUZU Hospitality Solutions Co-Founder Vikram Malhi says its latest partnership with Revinate aims to increase online revenue for hotels while eliminating operational complexities like dynamic pricing, inventory distribution, and online content, so hoteliers can focus on providing the best guest experience.
“Our initial four-in-one solution of insights analytics platform, channel management, revenue management and property management delivered an average uplift of 30% in online revenue to our hoteliers. This new reputation management partnership allows us to provide a five-in-one solution that has always been out of reach of independent hoteliers, making it challenging to succeed and grow in this competitive environment. Together with Revinate, we can give them easy access to the data insights that are crucial for any hotel in the region,” says Malhi.
According to Malhi, one of the key elements to increase revenue is to provide great guest experience, which requires monitored feedback across all channels. Typically, chain and large independent hotels buy reputation monitoring or management software to track guest feedback and collate the data. However, Malhi says the new partnership will enable small and medium independent hotels across APAC, to leverage ZUZU’s platform to get access to a richer data set provided by Revinate.
Headquartered in San Francisco with regional offices in Amsterdam and Singapore, Revinate is backed by Silicon Valley investors including Benchmark Capital, Tenaya Capital, and Sozo Ventures.
Revinate Regional Sales Director Suneet Nigale says their goal is to help hoteliers build stronger relationships with their guests using their own data.
“In Asia, there are still many hoteliers who don’t have the technology or resources to fully utilize the rich data platform we offer. Partnering with ZUZU will help us reach that underserved hotel segment across Asia through integration,” says Nigale.
ZUZU Co-Founder Dan Lynn says hotel partners will have access to guest reviews from all online channels. The system will also provide consolidated sentiment analysis and analytics of the guest reviews. He claims its fully-integrated solution will allow hotels to closely monitor the guest experience and take corrective actions where required.
“ZUZU is now the only complete outsourced yield management solution for independent hotels. Rather than dropping a piece of software on a hotel and expecting them to figure it out for themselves, we are the only partner of independent hotels that delivers revenue upside for them, making us true long-term hotel partners,” says Lynn.
Lynn says he built his career at the intersection of travel and technology. Prior to founding ZUZU, Lynn spent much of his career with Expedia, building its APAC business as CEO of AirAsia/Expedia joint venture AAE. Lynn also served on the boards of international travel companies Elong in China, and Movenpick Hotels and Resorts in Switzerland.
After teaming up with Co-Founder Malhi, whom was the former MD of Expedia’s Asia business, we asked what compelled them to both leave executive-level jobs at Expedia to become entrepreneurs. Malhi says they simply identified a gap that was too good to pass on by.
“It’s a combination of both interest and opportunity. Both of us are professionally excited about creating something of value from scratch. Add that to the huge opportunity in the independent hotel segment, it made perfect sense for us to start ZUZU Hospitality Solutions. We are both online travel industry veterans. Our combined experience and insights at Expedia got us excited about this new opportunity; we realised that the majority of bookings on online travel agency (OTA) platforms go to branded chain hotels even though they make up a small portion of the overall number of hotels. The chains have invested in technology and resources to optimize on OTA platforms while independent hotels are lagging in those areas as they cannot afford to invest in technology and expertise. We realised there’s a need for someone to help the independent hotels be better at managing their online distribution and revenue,” says Malhi.
According to Malhi, the key idea is to help independent hoteliers generate more revenue by providing them with technology and service offerings to manage online distribution and revenue.
“It is a huge opportunity considering that over 90% of hotels in the world are independent and these 600,000 need help in managing their online revenue. Traditionally, these independent hotels have worked with offline travel agents and corporations to drive demand into their hotels. Now, with increasing online penetration in the travel markets, consumers are shifting to OTAs to make their hotel booking. Boutique hotels need to shift their focus to online platforms or risk losing business to their competitions. With our offering, the hotel gets to utilise a full hotel operating system which consists of five key technologies that the hotel would need to optimize on OTAs,” says Malhi.
ZUZU provides an Insights Analytics platform which feeds data into its Revenue Management System (RMS). The RMS constantly updates hotel pricing dynamically using rules set by the ZUZU revenue manager assigned to the hotel. The price updates are pushed to all online distribution channels through a Channel Manager (CM). All bookings from OTAs then flow through the channel manager to the Property Management System (PMS). The PMS allows the hotels to manage reservations and hotel operations.
“We have recently connected a Reviews Monitoring system to the PMS so the hotel managers can closely watch the guest feedback for their properties. This combination of all-in-one software and assigned revenue manager from ZUZU helps deliver an average uplift of 30% in online revenue for the hotel,” says Malhi.
ZUZU now has a footprint in Singapore, Malaysia, Indonesia, Thailand, Australia and Taiwan and Mahli says it manages over 1,000 hotel partners.
“We grew five times in size in 2018 and are expecting similar growth rates in 2019. Our typical hotel partner is a 2-3 stars hotel with 40-50 rooms that is owned by an entrepreneur who is very much focused on operations and guest experience,” says Malhi.
Founded in 2016, ZUZU raised a seed round of USD 2 million in 2017 which allowed them to invest in product development. With its latest funding round, Mahli says they will further enhance their product and continue expansion by entering new markets in APAC.
“Having continued support from our existing investors in this investment round shows that we have fulfilled our mission to deliver yield management as a service for independent hotels. We are also grateful to have new investors come onboard and help us in our next phase of international expansion,” says Malhi.
According to Malhi, there are close to 60,000 hotels in Southeast Asia and about 93% of them are independent hotels which he says makes it a huge underserved market.
Malhi claims there are few factors that are helping this segment of boutique hotels grow. Millennials are travelling more and prefer boutique hotels over chain hotels, increased online penetration of travel growth due to greater access to product comparisons by consumers and solid growth in independent hotel supply.
“Travellers in APAC are younger, want tailored services and are increasingly seeking an experience. Boutique hotels are able to enhance the quality of service and take into consideration the preference of each individual guest. Travel demand is also increasing because of increase in disposable income and lower cost of travel as a result of increased Low Cost Carrier (LCC) capacity in the region. The number of people traveling and the number of annual trips per capita is growing. Online penetration of travel is growing at about 15% annual rate across Asia. Increase in online travel penetration means travellers can find, compare and book independent / boutique hotels easily and are getting more bookings through online sources than in the past. There is also solid growth in independent hotel (and hostel) supply,” says Malhi.
Hotel room supply has grown at CAGR of 8% for 2010-2017 period and is expected to grow at 7% CAGR until 2022. This is more than quadruple of the growth rate in a mature market like the US. Overall both demand and supply of independent hotels has been growing and is expected to grow in the next five years.