Let’s set the scene. You’re a hotel owner. Nothing too swish, just a nice little getaway location off the truck stop, a half mile from the lake and another half from the golf course. There’s a Raddisson down the highway some and a Motel 6 up the road and the Holiday Inn Express is at the offramp by the fast food joints.
And then there’s your place. We’ll call it the Sudden Valley Inn.
Your place is nice enough, but you’re getting lowballed on price by the Motel 6, and upper crusted on facilities by the Raddisson, and the Holiday Inn Express gets all the bus traffic, so what can you do to set yourself apart? How can you compete?
Priceline? Gross, now you’re dealing with zero margin guests who are only there to save a few bucks and are unlikely to spend big in your restaurant or bring ten business colleagues.
Hotels.com? Again, you’re eating into your margin, you’re getting lowball guests and they’re in late and out early and you never see them again, other than when they go to TripAdvisor and complain you put them in the room next to the ice machine.
In fact, a lot of hotels are rebelling against the Pricelining of their industry, including the Hilton Hotel chain, which launched its Stop Clicking Around campaign recently, with low room rates not found on other platforms, including free wi-fi.
Hilton is big enough to shove back, but thousands of hotels aren’t, and with AirBnB eating into their bottom lines, it’s not a hard sell when you bring them something new, that is seamless and can run more business their way without a crippling amount of fees being tossed at them.
Take a moment and go look at this demo video of what Zoomaway does. It’s pretty simple, seamless, and exactly the sort of upsell hotel operators increasingly depend on to grow their revenue per guest.
Back? Okay, so Zoomaway (ZMA.V), a newly listed public company that has been slow building and tweaking and streamlining and innovating quietly for the last several years, understands what it is.
Don’t bother Googling that, it’s my phrase for what they’re talking about. What it means is, when a guest books a room through your hotel website, you bundle experiences into the room rate, both to encourage a longer stay, compel a better client experience, help the local economy thrive, and provide options that competitors aren’t offering.
“Fancy a round of golf at the course down the road?”
“Maybe a fishing trip around the lake?”
“If you bring some buddies, you can get a discount on tickets to the comedy place in town…”
This is, basically, concierge stuff, except that a concierge traditionally waits for a guest to ask for something to do, while Zoomaway actively presents up-sell options to your guests at the time they’re booking in, without your own staff needing to lift a finger.
ZoomAway helps drive more traffic to hotels by enabling them to have their own white labelled activities platform right there on their own website.
You’ve been there – you’re taking the kids on a trip to see grandma, and you decide stop overnight along the way in Cotton Gin, Mississippi, but you’ve booked the hotel room for a Friday, which just happens to be the night when there’s no reservations left at the restaurant you wanted to go to, and the local neurologist convention has all the tee times booked and you can’t get into that spa that your wife likes the look of because they need a 48 hr advance booking and, to hell with it, let’s head to Wally World.
Zoomaway is a service that grew out of one man’s knowledge.
Sean Schaeffer made a good living helping clients in Tahoe and Reno book package deals for their travels, and over time he realized that there was a lot more potential in this business than just feeding a couple of convention crowds a few times per year.
Zoomaway is what he’s built; a service that answers the phone for a hotel, or takes a booking through their white-labelled website, and presents guests with all the options for experiences around the facility, inside and out. With arrangements made with local service providers so that Zoomaway can tap right into their systems and make bookings and check schedules at their whim, the Sudden Valley Inn suddenly offers something that the Raddisson doesn’t, and value that the Motel 6 can’t match, and an experience that will make those Holiday Inn Express bus passengers want to hang around for another day and switch up their booking.
“I had no idea there was a country club in Sudden Valley. Sure, let’s book 18 holes. Oh, there’s tennis courts too? Maybe we should stay an extra day…”
To be sure, Expedia pulls this stuff off in very limited format.
“Want a car rental with your hotel room by the ice machine? Sure, we’ll make that happen and charge the companies involved a big commission so they barely make any money off you, and then you’ll be surprised that they don’t pay much attention to you for the six hours you’re with them.” – An Expedia executive, probably.
Zoomaway’s real value is in its software system, that allows it to bring a hotel chain online quickly and easily, with flexible options and full customization. Whether you’re at the Sudden Valley Inn or dealing with a convention centre, or a hotel chain with 18 locations, Zoomaway can get you set up quickly, easily and (especially when compared to the margin you’d lose with Priceline and the like) inexpensively.
Casinos. Ski resorts. River cruises. Spas. Restaurants. Massages. Kayak rentals. Adventure tourism. Day trips. Experimental surrealist theatre.
Maybe not so much of the last one.
Zoomaway brings these inside the hotel, making them add-ons in an industry that all too often is about what can be removed from the hotel’s bottom line. There are 17,000 golf courses in the United Stated and 700+ ski hills, and each of those wants to be packaged with local hotel bookings because it’s great for their business. When Zoomaway calls them and says, “Can we send business your way?”, those tourism operators will break their necks yelling “YES!”
Okay, so we’ve established that this little niche has big potential, but how much? Well, the company has started small, in high value areas that it can quickly swing a return. These include Las Vegas (where the Palms Casino Resort has signed on), Reno/Lake Tahoe, and the Monterrey Peninsula. Big customers include Half Moon Bay Golf Links and Vail Resorts, which just took out a mortgage on Whistler Resort in BC.
Admittedly, that’s still not a wide swathe it’s cutting through North America, but in Reno/Tahoe alone, they’ve done over $2 million in gross revenues in the last year, with hopes of hitting $7.5 million in targets in 2017 with the addition of Northern California, the Pacific Corridor, Orlando in Florida, Scottsdale/Phoenix in Arizona, and the west coast ski markets.
Dotcom investors like to find deals where the company can hit the ground sprinting and be everywhere, instantly, to kill off any chance of competition, and they usually run at a filthy loss in doing so. But Zoomaway isn’t set up to be a viral kaboom. It’s being run to responsibly grow, market by market, because, as Schaeffer told me, the amount of work and thought that’s gone into the software and system is a bona fide barrier to entry for anyone else. They don’t need to undercut themselves and drive an industry to zero margin to succeed, because they’re the only game in town.
And Zoomaway’s gross profits are projected to be in the 20-25% range, which is plenty of dough to be able to build on.
If Expedia wants to get into this business, it will, but it will cost them a billion to engage their big machine in a way that could maybe swing a return, and it’ll take time to build it out. In contrast, Zoomaway has a market cap of less than $10 million, and is already on the march. If Expedia really wanted to hit this sector, what’s more likely – that they spend that billion, or just buy little Zoomy for 4x current value?
Expedia, Priceline, and TripAdvisor made over $6 billion in acquisitions in 2015, and have bought out companies for more than 20x EBITDA. That’s not likely to happen to Zoomaway tomorrow, but as the company continues to build out its offerings, software, client base and branding, that likelihood will become all too real.
Give it a look in the expectation that they’re just going to keep rolling out news about new partners. Like they did in mid-October when they added Pebble Beach’s golf community to the mix.
“Poppy Hills, on the Monterrey Peninsula, has partnered with ZoomAway, Inc., to offer Northern California Golf Association members and guests the ability to book stay and play packages online.
ZoomAway, Inc’s. scalable White Label Technology Platform is embedded in the Poppy Hills website, www.poppyhillsgolf.com, and will allow customers to make lodging reservations and book tee times in one simple transaction, resulting in a single itinerary and cost savings and convenience.”
“Our partnership with ZoomAway, Inc. will truly enhance not only our customers’ ability to make tee times at Poppy Hills, but it will also allow them to book their lodging as well. Most importantly it will give us a spectacular tool to directly market stay and play offers to the members of the Northern California Golf Association,” said Cole Handley, Head Golf Professional at Poppy Hills. “The ZoomAway, Inc. White Label platform allows our customers to customize a Poppy Hills vacation in one simple transaction.”
Go take a look at how it works. And watch this space.
(And the ticker symbols: TSXV: ZMA, OTC: ZMWYF, Frankfurt: 4ZO.)
— Chris Parry
FULL DISCLOSURE: There is no commercial arrangement between Equity.Guru and Zoomaway Travel, and the author owns no stock in the company. We just dig a feisty little tech story.Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.