The difference between being in a strange city with no place to stay or in a hotel suite with an unexpected date does not have to cost an arm and a leg.
Blink, a new application for cellphones that run iOS (Apple’s operating system) and Android (Google’s), lists more than 200 hotels in 23 cities offering same-night accommodation with discounts of up to 70 percent. The listings are available between 12pm and 3am every day, and the only condition is that booking and payment be done with a cellphone, a process that takes about four clicks.
The idea is not new, but it has just arrived in Spain. In the United States, an application known as HotelTonight got started in December 2010. It has been something of a hit, achieving more than a million downloads and attracting 12 million dollars of investment capital. Rebeca Minguela and Alex Pérez, two engineers with MBA degrees at Harvard and Stanford, thought it such a good idea that they decided to launch something similar in Spain.
That is how Blink got underway in October 2011. The service has agreements with 200 hotels in six European countries, including Spain, which contributes 12 cities to the list.
Blink reaches deals with around 15 hotels in each city and forces them to offer at least a 10-percent discount over their online fares. The four best offers are the ones that finally show up on the application.
“We’ve created an auction system to make hotels compete against each other and offer the best prices. Consumers are interested because they can stay at quality places while saving up to 70 percent, and hotels are interested because otherwise the room would sit empty,” explains Blink CEO Miguel Ortega, aged 30. Daily occupancy rates at European hotels are 60 percent on average, leaving 40 percent of free rooms to offer discounts on, Ortega explains.
So who is using this service? Rebeca Minguela smiles. “We know that a good portion of bookings in the US through HotelTonight are made at the eleventh hour, after midnight — you can imagine.”
Of course, it’s not all about lust or desperation. There are also business travelers keen on saving money and tourists who improvise as they go. “It’s a matter of changing your mindset. If you know you’re always going to have a cheap, quality hotel available that same night, you can afford to wait.”
Minguela and Pérez provide few economic figures on their business. For instance, for every reservation Blink takes a commission, but they will not reveal how much. In the US, similar applications take between 15 and 25 percent, and the rest of the money goes to the hotel. In Spain, Blink has been downloaded more than 45,000 times in just three months, and on several occasions it has been the Apple App Store’s top seller in the travel category.
The founders are now closing a first round of financing with European and Silicon Valley investors. How much money they can attract remains a mystery, but Blink has 20 employees, most of them with international studies and experience, and three of them with degrees from Harvard and Stanford.
“It is a great opportunity,” says Minguela. “In 2010 only three percent of global hotel reservations were done via cellphone. Last year it was already 10 percent. This is just the beginning.”
Their priority now is to grow as fast as possible to be the first to conquer the Spanish and European markets and prevent clones from springing up like mushrooms. And yes, they deny being clones of the US service HotelTonight.
“Our model is more beneficial for the hotel and the application is easier to use. Innovating is not just about creating something completely new, it’s also about knowing how to adapt other people’s innovations without reinventing the wheel. In Spain we’re very bad at that.”