By Lubna Hamdan
Addressing the need for a centralised global database for descriptive hotel content and real time updates
Where did the idea for Hotel Data Cloud come from and why does the market need such a platform?
I am a pilot by profession, but always had a passion for entrepreneurship, so I decided to follow my calling and started a hotel room wholesale company, selling reservations to travel agencies and tour operators. I realised very early on that end customers were not receiving the latest hotel descriptions, update on amenities or other features.
In turn, nine out of 10 travellers blame the hotel for wrong or missing information, not only hurting the hotel’s reputation, but also affecting their bottom line.
I started Hotel Data Cloud (HDC) because I saw a need in the market for a centralised global database for descriptive hotel content and real time updates. Essentially, we make sure that the hotels’ information and pictures are updated across all travel websites, travel agent databases and points of sale, thereby ensuring that potential guests can make educated and informed booking decisions.
According to a study by McKinsey and Google, it takes an average traveller 45 searches over a 36-day period to research and make a final hotel booking decision. Now more than ever, there is a need to ensure that potential customers are kept informed of the latest offering.
What is your business plan?
When we started HDC in 2016 our aim was to set a new standard in global hotel content distribution. Our business model caters to a two-sided market, where hotels are charged a nominal yearly fee to distribute their descriptive content and booking partners or travel agents can use it for free.
Just a few weeks ago, we were approached by Google for a strategic partnership to help facilitate hotels in lowering their ad expenses and driving more direct bookings. While this will be a real game changer in the industry, we are also looking at other monetising options, such as translation services for hotels and editorial help for content creation.
Can you walk us through your funding journey?
When you start fundraising it is good to have a broad personal network of investors. But because we are fairly new to Dubai, we decided to fundraise through an established crowd investing platform called Funded By Me. Originally from Sweden, they were recently licensed by the Dubai Financial Services Authority (DFSA) and enable us to present HDC to a broad audience of investors. We are very privileged to be one of the first companies to pass their stringent due diligence protocols to be listed on their platform. Funded By Me serves as a gateway for both first time and professional investors and caters to all investor categories, even those who simply want to invest $500.
Has it been difficult to raise funding for Hotel Data Cloud? Why or why not?
After bootstrapping the company without any external investment, we are now in the initial round to take on external investment and we have interest from different parties. But, because we have a very specific B2B product, we have seen that people that have a deeper insight into the travel industry are more likely to immediately see the enormous potential that HDC offers.
However, we are confident that through our listing on Funded By Me people outside the travel space will also participate in this tremendous investment opportunity.
Do you need to raise a lot of capital for the business? How costly is it to run the platform?
Running the platform itself is not costly, but we need the funds to scale up and meet client demand. We are aiming to raise between $500,000 to $1m in this round.
Of course, we will use some of the funds to continue development of the product, but the majority will be used to expand our team here in the UAE and focus on business development and partnership management.
How big is your team?
We have a lean management team with high expertise. I am a serial entrepreneur and my co-founder Kevin Czok used to be a venture capitalist in Germany, so he takes care of the financial side of our business. We are complemented by our development team in Belarus and a back office in the Philippines.
What are some of the deals with hotels that you have in the pipeline at the moment?
Recently, we have signed with Global Hotel Alliance to onboard their 700 luxury properties onto Hotel Data Cloud. We are also in talks with some of the largest hotel groups globally and expect them to be onboarded early 2020. Several content users who urgently need our services will act as distribution partners globally, making it even easier for us to rapidly scale.
What are some of the main challenges the business is currently facing and how do you plan on tackling them?
The biggest challenge at the moment is meeting increasing client demand and scaling fast enough. At this point in our company trajectory, we are focussing on addressing this challenge by looking to engage external investors who can help to expand our team.
How has the reaction been from the hotels and OTAs so far? Has it been the reaction you were hoping for or did you expect more clients to join the platform?
We are very proud to have more than 11,000 hotels on our platform already and are signing up new clients on a daily basis. We have also seen a remarkable shift in the way that both hotels and booking channels now understand the critical need for proper content distribution. Incorrect and missing information does not only damage the hotel’s reputation, but also accounts for lost revenue because of lost bookings.
What are your future expansion plans for the business? Do you wish to operate beyond the GCC and can you share a timeline?
HDC has been a global product from the start and we are already servicing hotels in 153 countries to date. The next stage in our evolution is to focus on key markets where we see potential for exponential growth. In particular the UAE, where we are working with Dubai Tourism (DTCM) and Dnata through participation in their incubator Intelak earlier this year.
What is your vision for Hotel Data Cloud? What do you see it growing into?
Out vison is to set a new standard in global hotel content distribution. Eventually, our aim is that every hotel globally will partner with HDC to ensure their content distribution is seamless, up to date and accurate.
It’s a bit early to ask but what is your exit strategy?
While it is early to be talking about an exit strategy, we do believe that HDC has a product that offers longevity and relevance within the travel and tourism industry, and would be attractive for a larger player to make an acquisition.
Any regrets? If you could go back, what would you do differently with Hotel Data Cloud?
The one thing that I would do differently is to start a year later, instead of 2017. In retrospect we were ahead of the market, it was only in 2018 that we really saw a spike in the level of understanding, importance and demand for standardised hotel content distribution across all channels. In our early days we spent a lot of time educating the market about the need for disruption and challenging the old ways of doing business.
What is the best advice anyone has ever given you?
“Done is better than perfect,” a Facebook mantra by Mark Zuckerberg that really resonates with me.
What is entrepreneurship really like?
Entrepreneurship is like a rollercoaster ride. There are intense highs and intense lows. But through it all, you need to believe in yourself and understand that for every ‘Yes’ you will hear 20 ‘No’s’. But at the end of the day, as entrepreneurs we don’t do things because they are easy, we do them because they are exciting, and because we have the possibility to change a whole industry.