The Sweet Side Of Group Travel

There are many ways to a signature innovation, and in some cases great platforms have been created out of great and timely pivots.

Such was the case with, said Co-Founder Kyle Killion, who remarked in this week’s The Matchmaker Is In that the founding team’s first idea to change the world of travel commerce was to make it easier for groups to book together. With easy communication channels, easy ways to share data and easy avenues of payment, surely, they thought, theirs was going to be the platform for disrupting the travel industry.

Then they learned something interesting about group travel: It is not a democracy; it is a dictatorship.

“There is the one person who does basically everything and organizes the trip and makes all the decisions,” Killion remarked. “What we have seen is if that person is not there, the group is going no place.”

That revelation was difficult, but on their way to making it, they discovered something else entirely. Though groups didn’t have much interest in having their travel democratized, they did have a great interest in accessing suites for their stay. The first week the company offered suite bookings, Killion said that they made as much money as they had in the previous month. By the time a month had passed, they had out-earned the previous year.

“So, we pivoted and decided to go into the business of making it easier for customers to find and book suite-style lodgings.”

Filling a Hole in the Market

Groups, Killion said, are still an important part of Suiteness’ sweet spot, since the typical booking ranges between four to eight guests and involves friends and families traveling together, often for special occasions. But, Killion explained that when people are traveling together, they want a shared space — which isn’t easy to get with hotel rooms that may be spread out all over a hotel and not easily accessible to those who are part of that “group.”

“Besides,” Killion said, “being dispersed all over a hotel lacks that common experience. Taking a suite, especially one with an adjoining room, can be the most economically efficient choice for a group like this.”

Even though, he said, the suite base price is higher, when it is booked in combination with another room, it’s still more affordable than taking three or four rooms out for friends or family traveling together.

“Whether or not a suite has a connected room is actually a top factor in deciding what inventory people book. That is the sweet spot, so to speak,” Killion said, and then immediately apologized for the suite/sweet pun.

The issue, he noted, is that these types of rooms aren’t actually as easily accessible to customers as one might imagine. Most of the platform’s listings, he explained, don’t appear on other travel aggregators, meaning customers who want them have to spend time calling hotels.

Even in that situation, he said, can offer a better booking experience, because it works one-to-one with each hotel partner it brings onto its platform to make sure it can offer an inventory of those spaces to individuals or groups.

“We pick each hotel we work with individually,” Killion said, explaining that’s technology allows groups to book connecting rooms and to allocate that at the time of booking, something that is not available on any other booking site.

And that, he said, means working closely with hotels on the inventory they provide, since there are plenty of potential properties that could be listed but won’t net much in the way of bookings.

“The example I like are the 6,000 square foot mansions at Caesars in Las Vegas —lodging that the CEO of Caesars actually has to approve before it can be rented. They are also largely only really rented out by celebrities or royalty.”

It’s a large investment of time and effort for both Suiteness and their partners to secure and promote the inventory, which means that effort is best spent pushing out the properties customer want, are looking for and can’t get access to easily.

And then pay for just as easily.

The Power of Varied Payments

While Suiteness features the very most luxurious listings — the mansions at the Caesars of the world — that is not where their customers cluster, noted Killion.

“Our average booking is a fraction of the high-end ones that we list,” Killion said. “What is most often booked are lower nightly rates, split between members of groups that are taking advantage of the chance to split the bill between friends and family.”

That’s another area where Killion said Suiteness shines, given its roots as a group booking site. Suiteness is set up so that the bill can be divided among each member of the group, sent to each member of the group and then held for processing once all members of the group have actually entered in their payment information. As a merchant, Suiteness takes payment from the travelers — in full at the time of the booking — and then remits the payment to the hotel after the consumer has completed their stay. This shift from a process that just authorizes a card at the time of booking to payment in full, Killion said, has reduced the cancellation rate to the low single digit percentages, as opposed to the 20 percent that he said is common across the industry.

More recently, a partnership with Affirm (CEO and Founder Max Levchin is an investor) lets what Killion referred to as the younger, high-income-not-rich-yet consumers finance their stay.

Since most of the customers book their stay 60 to 90 days in advance, Affirm’s products make it fairly easy to take a large payment and break it into a few manageable chunks leading up to a planned stay.

What’s Next

Like most startups, wants to expand to more cities, though it takes a fairly circumspect approach to doing so. Through “soft launches” in cities, it gets an idea of what the demand for suite-style lodging among consumers is in that market, and based on that data begins approaching hotel partners in the area.

“When we have that data and can point to increasing their booking rate on these high-value rooms, it is a pretty easy sale. The best experience we have … [is] when our partners look to guide us into new cities where they have properties and they feel like … [we] are making them so much money in one market; they are begging us to enter others,” Killion noted.

And, he said, they are also looking to do more for those hotel partners by actually powering their website for them and using their software to power bookings they would otherwise not be able to make.

“That is a new opportunity for us,” Killion said, explaining that Airbnb changed the way consumers shopped for lodging when it came to the amount and type of common space they wanted when traveling with their companions, but that hotels have something special of their own to offer in the form reliability and service — and, at the very high end, VIP service. Consumers, particularly when traveling in packs, like those features as well.

All they needed was a matchmaker to help bridge that divide.

Pretty suite deal.