#StartupsEverywhere profile: Yannis Moati, CEO, HotelsByDay
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Offering Travelers Day Rooms Across the World
HotelsByDay wants to make the hotel experience more hospitable by offering guests the opportunity to book hotel amenities and rooms for personal- and business-related uses during the day. Based in New York City, the startup is focused on monetizing unused hotel amenities and rooms by providing guests with a place to stay, conduct business, and relax outside of typical hotel booking times. We recently spoke with Yannis Moati, HotelsByDay’s CEO, to learn more about his idea for the startup, how the coronavirus pandemic has affected his business, and how crowdfunding allows startups to diversify their investment sources.
Tell us a little about yourself. What is your background?
I was born in Tunisia to a French father and an Italian mother, and because of that background I traveled around a lot when I was young. I’ve been involved in professional travel now for almost 20 years. I started out as a tour guide in Italy for American tourists during the summers, and then I became a travel agent doing exotic travel in North Africa and Europe.
I moved on to being a tour operator, which is a step up in wholesaling tours. Throughout my career, guests who arrived early in Europe often expressed a desire to have some flexibility with their hotel bookings, whether it was checking in early or leaving later because of their flights. It was hard to get flexibility when it came to hospitality, and I thought there was something really wrong with that because we have an on demand, on the move society. But hospitality is very rigid with its decades-old model of set check-ins and check-outs. At HotelsByDay, we coined a phrase: 'Hospitality is becoming inhospitable to modern society'—and it’s ready for disruption!
Tell us more about HotelsByDay and your business model. How did you come up with the idea to unlock unused ‘day rooms’ at hotels?
Years back, I was in Europe for business and was told of a local platform that sold rooms for the day, and while I was initially skeptical, I thought that this model could be applied to an American way of doing business. More than Europeans, Americans are more willing to spend if it accommodates their schedules and needs. So I took that original model and turned it into a business-oriented, revenue optimization solution for hoteliers.
We launched HotelsByDay in 2015, and we’ve essentially created a revenue model for hotels to monetize rooms that would otherwise sit empty during the day. Even when a hotel is completely booked for several days, it typically has around 30 percent of its rooms open up by 10 am. So even a hotel is sold out of rooms, you’ve still got so many people leaving early and so many people that haven’t checked into the rooms. So we’ve created the technology, the protocol, the marketing engine, and everything else around this idea of optimizing hotel rooms that would otherwise be sitting empty.
We’re primarily based in North America, and the U.S. and Canada account for almost 80 percent of our bookings. We also have a presence in the United Kingdom and Israel, and a small presence in India and Latin America.
How do you identify hotels with available day room options?
It’s really the Achilles’ heel of the industry in general. There’s no technology that allows us to source day rooms. Essentially, processing a night room in a system is binary, with either a 0 or a 1. So if you book three nights, then it’s 1-1-1. If you book a day room, though, that’s half a stay, so that’s 0.5. Unfortunately, no system right now allows us to process that. And because of that, we are forced to connect manually to hotels, which is a problem.
To compound the problem, we have a variety of industry players that all use their own system of connectivity. It's a spaghetti bowl! There’s no universal API to connect to, and there’s no universal language. It’s a whole can of worms when you start digging because you realize how broken up each individualized tech solution really is, which impedes the ability for startups like us to scale faster.
But we launched in New York with just 12 hotels, and we now have over 1,100 hotels. We’ve been successful because the model works, hotels lift their revenues, guests rate us highly, and we’ve been getting really wonderful reviews.
How has HotelsByDay responded to, or been affected by, the coronavirus pandemic?
Compared to last year, we saw a 900 percent increase in the number of hotels that reached out to us in March and April. Hotels have been forced to look for alternative solutions to find revenue since their traditional business has fallen off a cliff. The main thing hotels are relying on now is domestic road markets.
HotelsByDay is lucky in that the overwhelming majority of our customers are hyper-local, in the sense that they’re not foreign travelers. Sixty-six percent of our customers live within 30 miles of the hotels that they book. They use our platform for a variety of reasons, such as visiting a nearby city for the day, getting access to a pool, or getting out for a suburban resort escape. And hotels use our model to capture guests that they’ve never communicated with before, so we’re coming in really handy right now. The portion of our startup focused on onboarding and hotel relationships has been busier now more than ever.
I know you’re based in New York City. What makes New York’s startup ecosystem unique?
To me there could be no other city in which to launch this service, because it really represents the universality of demands. You’ve got everything under the sun here. There’s no uniformity to how a person acts or reacts in the city. It’s a rainbow of possibilities.
What are some of the startup-related policy concerns that you believe should receive more attention from state and federal lawmakers?
The Regulation Crowdfunding solution that went into effect not too long ago was a wonderful opportunity for startups to fund themselves without having to go through the bottleneck of securing funding from VCs and angel investors that command that sector.
I would invite lawmakers to think about further solutions to give startups the tools and resources they need to diversify their funding sources. It’s wonderful to be able to secure funding elsewhere, and I think lawmakers should think about other ways to help startups better support themselves.
What is your goal for HotelsByDay moving forward?
My vision of a hotel is a place that should be profitable from a bunch of different models that, individually, might not be so profitable. When you think of a co-working space, or a ghost kitchen, or even amenities such as a gym or spa, it’s hard for many of those individual businesses to break even. But much of that current infrastructure is already in place at a hotel, and underutilized to boot! Essentially, hotels are big boxes full of staff and infrastructure that is geared towards only one sector: night stays only. They are sitting on gold if each single corner of their facility were to be monetized and advertised properly.
So our mission is to monetize all of this and make it easy for the hotels to create their protocols and market their services without having to go through the pain of setting it up individually. We’ll have it all thought out for them, in turnkey solutions, and all they'll have to do is to onboard with us and voila!
All of the information in this profile was accurate at the date and time of publication.
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