Launched earlier this month, Hotel Gift is a Dutch start-up that has created a digital listing service for buying and selling gift cards for stays at properties worldwide.
It sells an online gift card, redeemable at more than 110,000 hotels in more than 170 countries.
Hotel Gift created this cute Vine about its launch:
A Q&A with CEO Loes Daniels:
Tell us how you founded the company, why and what made you decide to jump in and create the business.
The idea of Hotel Gift started more than a year ago, while I was still working as a consultant at Deloitte Consulting in Amsterdam.
On a Friday night I needed a gift for my friend’s birthday and due to my busy consulting life didn’t have had the time to go shopping.
An hour before the birthday party I was still stressing to get a gift and eventually made a note saying that she could pick a date and we’d go on a trip to London to celebrate.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
After many conversations on launching an online hotel gift card and diving into startup life I seriously started to research the feasibility in November last year. While learning more about it I decided to launch the same concept for flights.
However, during the first months I noticed it’s better to focus on one concept and do it right, instead of focusing on two concepts half.
Consequently, after nine months of development, Hotel Gift has now launched! When the UI is has been optimized I will copy the concept for a Flight Gift Card, which will hopefully launch within three months.
Competition?
Many large hotel chains (e.g. Marriott and Four Seasons) are offering hotel gift cards. However, there is no major player offering a gift card for multiple hotel chains worldwide.
In addition, most current online gift cards don’t offer the option to personalise the gift card with a picture and a personal note, nor do they offer a group gift option.
Why should people or companies use the business?
How often do people receive a gift that they already have, don’t need or don’t like? With Hotel Gift you overcome this issue as most people sleep in a hotel every once in a while and if not, it’s a good reason to go on a weekend trip or a little holiday.
We offer hotels in many countries so everyone can search the hotel they like, at a destination they like, for a price they like.
Estimation of market size?
The total gift card market is expected to be approximately $200 billion worldwide in 2014. About 7% of this market is related to e-gifting, resulting in an online gift card market size of approximately $14 billion.
Assuming the potential of travel related gift cards is 5%, the market size potential is approximately $700 million.
Revenue model and strategy for profitability?
Hotel Gift makes a margin on every hotel booking made.
Next to selling gift cards for hotel bookings, we want to encourage people to book their hotels directly via us (i.e. without a gift card). To facilitate this we are offering low hotel prices.
What problem does the business solve?
Hotel Gift is a convenient and personal experience gift. Hotel Gift also gives a freedom of choice as the recipient can choose from 110,000 hotels, from budget to high-end luxury worldwide.
Size of the team, names of founders, management roles and key personnel?
I’m the sole founder. I’m responsible for the overall business, incl. finance, tax, marketing, and business development. In addition, there is IT development and two (part-time) interns, mainly focusing on marketing execution and PR.
Funding arrangements?
Hotel gift is partly self-financed and partly funded by angel investment.
What is the strategy for raising awareness and the customer/user acquisition?
Since Hotel Gift is a startup we have a very limited marketing budget. We’ll mainly use social media and try to come up with creative manners to attract attention.
In addition, we’re looking for bootstrapping methods for acquisition in the B2B market. If you’re reading this and have some good ideas, please let us know!
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
In three years time Hotel Gift, in combination with Flight Gift Card, will be the number one travel gift worldwide. Our main challenge will be creating brand awareness and customer acquisition with a limited budget.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
Nowadays everyone loves to travel and people are going on trips more often and further away, but there are (almost) no possibilities to give travel gifts. That’s where we come in!
In addition, Hotel Gift features a group gift module whereby one initiator can invite a group of friends and everyone can contribute to the group gift by easy online payment – no more hassle to collect the money. Ideal for e.g. a honeymoon, birthday party, or to support a world traveller.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style… and why?
99dresses in the early stages. 99dresses was also founded by a young passionate female entrepreneur. Although I’m a few years older and have some business experience due to my years of consulting, I have no startup experience and moved abroad to purse the startup dream.
Let’s hope Hotel Gift, in contrary to 99dresses, will succeed though.
Which company would be the best fit to buy your startup?
There will be two options. Either a travel company wanting to start selling gift cards, or a gift card company wanting to expand its portfolio with travel gift cards.
Describe your startup in three words?
Give, Travel, Explore.
Tnooz view:
More than a year ago, Tnooz covered how online gift cards could represent a marketing and distribution goldmine for hotels.
But hotels have been slow to act, and Hotel Gift is seizing an opportunity to serve as a middleman.
The big problem facing any such site is, of course, marketing. How can a single proprietor get the word out about their platform to a large enough group of people to gain traction?
Other start-ups that built momentum, like Belgium’s Tinker taxi app; France’s Capitaine Train, Germany’s GoEuro, Italy’s Museument; and the US’s Hipmunk, were more than just single-person teams.
Hotel Gift needs to get more bodies on board that have different skill sets and industry contacts. Other than that, it looks like a very promising marketing solution.
As recommended reading, we suggest this summary of a study of how 30 different US entrepreneurs who founded successful companies (their company valuations were all measured in hundreds of millions of dollars) each solved a 17-page problem set containing 10 decision problems relevant to introducing a new product.
Successful entrepreneurs tend to solve problems differently from the rest of us, according to an academic theory. Here’s what they do, in simple terms:
Start with what you already know how to do well.
Filter your efforts to avoid big downsides not to select for big upsides.
Work with other people who bring new abilities to the table.
Take advantage of the unexpected.
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.
