Report

Teaser, summary, work performed and final results

Periodic Reporting for period 1 - Home2nite (Home2nite is an innovative guest engagement platform that aims to empower the independent hotels as AirBnb did for the travel hosts.)

Teaser

A major change in consumer behaviour is seen where users turn away from computers to smartphones and tablets for their online needs. Application downloads of App Store and Google Play grow to 175 billion and each user spent about 43 days per year in apps in 2017 [1]. 2017 was...

Summary

A major change in consumer behaviour is seen where users turn away from computers to smartphones and tablets for their online needs. Application downloads of App Store and Google Play grow to 175 billion and each user spent about 43 days per year in apps in 2017 [1]. 2017 was also a good year for App Store revenue growth. According to App Annie, publishers were paid over $86 billion across the iOS and Android app stores which represents a 43% rate of yearly growth, surpassing 2016’s rate [2].

Like mobile technology, tourism is also another major economic activity worldwide. It has a wide-ranging impact on economic growth, employment and social development in the European Union, which can be a powerful tool in fighting economic decline and unemployment [3]. According to Hospitality Europe, EU currently employs 9.5 million employees in the hospitality industry and in recent years, the hospitality industry has been one of the fastest-growing sectors in Europe in terms of employment. Europe is the largest tourist destination in the world with a market share of 50%, representing some 475 million international arrivals. People are spending over 1.5 billion nights in hotels in the EU27 [4].

Although, hospitality is a growing industry, there are big challenges for independent hotels, which are owned and operated independently, without being a part of a global chain hotel brand. Independent hotels, which reach 67% of the all European hotels are facing unique challenges and problems:

- Most independent hotel owners are pursuing their family business, they are not well aware of how to exploit the technology to attract more customers, increase engagement with them and improve operational efficiency along with customer satisfaction.
- Independent hotel owners’ ignorance of exploiting technology already started costing them as OTA (online travel agency e.g. booking.com, hotels.com) fees which are sometimes as high as 25% of room revenue.
- Even if independent hotels had the IT systems for customer engagement, such tools are intimidating for the average hotelier. Any system offered to them should be simple enough to use.
- Independent hotels are cost-driven.
- Also, brands and chain hotels dominate some of the markets.

Considering the trends and challenges mentioned above, Home2nite sets its objective to create a competitive edge to independent hotels by providing “better customer engagement” over the smartphones and tablets of guests.

Home2nite is a mobile application where independent hotels can get direct reservations without paying commissions to OTAs and make their guests feel like they are at their home through providing guest services with the convenience of guest’s own mobile device. Hotel guests can use their mobile phones to book rooms, book on-site restaurants, book on-site SPA, request room service, request housekeeping, order taxi and more depending on the facilities of the hotel. Also, customers can rate the provided service or employee.

While providing a cost-effective and simple mobile application, Home2nite provides effective back-end tools for independent hotels’ use to create better guest engagement for guest communication, up-selling other services and receiving feedbacks via context-based surveys.

[1] https://techcrunch.com/2017/01/17/app-downloads-up-15-percent-in-2016-revenue-up-40-percent-thanks-to-china
[2] App Annie 2017 Retrospective: https://www.appannie.com/en/insights/market-data/app-annie-2017-retrospective
[3] European Commission: http://ec.europa.eu/growth/sectors/tourism
[4] Hospitality Europe: http://www.hotrec.eu/about-us/facts-figures.aspx

Work performed

During the first period of the project, three out of six work packages (WPs) have been completed successfully. With System Architecture WP, we have developed a highly scalable, easily maintainable and reliable system infrastructure running on Amazon Web Services cloud domain by using most recent technologies. We have tried to satisfy all security criteria. AWS provides a rich set of predefined security options. Moreover, we have completed our studies to comply with the General Data Protection Regulation (GDPR) EU 2016/679. So, all critical data are processed according to GDPR regulation.

We designed the system so that critical data are encrypted and all the GDPR measures are implemented. Currently, we did not find any fraud risk in our system but this is a continuous effort which means that in every new software update we are checking the security issues and all best practices.

By Content Management System (CMS) WP, we have obtained an easy to use CMS which is called as Web Application, with a rich set of features like guest engagement platform, context-based survey and notification management. Another product is the Hotel Operations Web Application which is developed within the scope of CMS WP.

User Experience (UX) Design is the third WP, that we have completed at the end of the first period. By contacting hoteliers earlier than proposed and getting direct feedback, comments and opinions we have been able to get the most effective and efficient UX design for mobile apps.

Currently, WP6, Commercialization and Dissemination WP is continuing, which has started in the fourth month of the project. During the first period, we have met with many hoteliers by participating in events both in Turkey and abroad. These events helped us to gain insights into the industry, create a network with hoteliers and get feedback from them about Home2nite. In the second half, we will mostly work on sales activities.

Final results

Considering the customers of Home2nite, market segment chosen is independent hotels, which are not part of a chain.

Home2nite targets its geographical market as Europe, United States and Middle East (especially United Arab Emirates where their hotels have the world’s highest Average Daily Rates (ADR) and occupancy rates). The initial sales activities will begin in Europe, and the Middle East. Home2nite will first try to dominate on home country and sell to other countries with market replication activities. The total available market size for Home2nite exceeds one billion euro annually. However, in our target segment, 3.000.000 rooms are available and this reflects a 220 Million Euro annually. Although the growth rates of independent hotels are less than 3%, the growth rates of online applications exceed 100% annually (for example Airbnb growth equals to 110%) [5] where an “S-shaped growth” is expected. In addition to sales revenues of Home2nite, affiliation programmes, direct sales of other services from the application will also generate unprecedented revenues.

[5] https://skift.com/2016/05/03/state-of-travel-2016-airbnb-vs-hotel-rivals-in-6-charts/

Website & more info

More info: http://www.home2nite.com.