Any other business

How HotelTonight's hospitable culture makes for a winning workforce and content clients

14 min read

21 July 2015

Former deputy editor

When HotelTonight was created in 2010, it was created on the back of a product vision – but also a people vision. That combination has resulted in the company possessing a carefully crafted culture that houses a motivated workforce and incredible growth metrics, as co-founder and COO Jared Simon has detailed to Real Business.

Recognising that the online world had disrupted the tangible world of commerce, Simon and his fellow co-founders, CEO Sam Shank and chief architect Chris Bailey, realised that mobile was going to be the new future of ecommerce.

However, this was five years ago, and Simon acknowledged the concept the company was pitching fell on many deaf ears as most people they were pitching to still didn’t own a smartphone at that time.

The reason this was so important is that the concept for HotelTonight revolves around a simple idea: same-day, mobile-only hotel bookings. There is no desktop channel to support sales – the website is merely a source of information – but the app processes a payment in just three taps.

Convinced that their concept would work, the trio also drafted together a people vision as they developed the product, designed to outline just exactly the type of staff they wanted to work with. This decision was made to tackle another challenge they faced, in that many hotels had poor experiences when working with other third party distributors.

Simon explained: “One thing that seemed counter-intuitive, but was necessary, was making our own internal rule not to hire anybody from any other online travel agencies. We thought if we hired from a competitor they would come in with all the bad habits hotels disliked.

“Without a cultural disposition of what we wanted, we couldn’t have created the company we desired and at this point it’s worked. We hired people that reflected the values we wanted and, in essence, these were just creative problem solvers. They didn’t come in with any preconceived notions about how this industry should operate and that worked really well.”

Read more on the travel industry:

Detailing why the decision was seemingly counter-intuitive, he said “as a young sexy startup” it would have been easy to hire from online travel agencies, which would have enabled them to scale at a faster rate and with more knowledge. Instead, the three leaders took it upon themselves to deliver the education to their new starters from scratch.

“The general story of the startup is that you have a great product idea, raise some money, work on it and then six months later you look back. Suddenly, you’ve hired all these people without thinking about who you wanted to work with or what you wanted it to feel like,” Simon explained, saying that’s something they considered from the outset.

Having decided what they wanted the business to represent, Simon said it became a “value-driven culture”. The idea was to change the idea of third party agencies being “seen by hotels as a necessary evil”.

“We wanted to think of ourselves very differently, so we look for people who on one hand are innovators, builders and questioners – willing to question everything, the way we work, the way the industry works and build new ways of doing it,” he said.

“Then there are people who exhibit a higher degree of respect for the industry and we want to be part of the community. For our customers, we go the extra mile to build tools and services that do more than just assist in a transaction, we look to be an inspirational tool, a fun app to use that can brighten someone’s day.”

Indeed, the company makes sure the app runs seamlessly, adding mobile-optimised images throughout, while editors give each destination a personal description rather than just lifting content from the hotel’s website, which makes for a distinct “vibe and personality”.

Emphasising just how serious they are when it comes to hiring, Simon revealed: “You don’t get hired if anybody who interviewed you isn’t excited, and that’s a really high standard. If just one person is unsure, we don’t hire them. That’s served to maintain and enforce this culture.”

With more than 200 people working at HotelTonight today, just four years on from the beginning, it’s fair to say that the company has shed its startup tag – but Simon disagreed.

Continue reading on the next page to find out why that is, and what HotelTonight does to ensure that startup mentality throughout the business acts as a productivity engine.

With more than 200 people working at HotelTonight today, just four years on from the beginning, it’s fair to say that the company has shed its startup tag – but Simon disagreed.

“I think of a startup as a state of mind, it doesn’t describe the structure of the company as much as it describes the dynamism,” he opined. “To me, and maybe it’s the America-centric way of looking at it, if we graduated from startup it would start to feel like we’ve got it all figured out. The reality is we’re still experimenting, doing lots of cool things, taking risks and it doesn’t feel like what a non-startup would be doing.”

The firm is headquartered in none other than US tech hub Silicon Valley, but London was the location of choice for the firm’s first international launch back in 2012 just ahead of the Olympics.

And although HotelTonight now has over 13 million downloads and features 15,000 hotels in 34 countries, the company only opened additional global offices beyond the US and UK this year, with locations now in in Toronto, Sydney, Paris and Berlin.

Despite that, the HotelTonight team vets and negotiates with every hotel on an individual basis to truly build “lifetime relationships” with the clients rather than “transactional relationships” – the latter of which is favoured by competitors.

Given that HotelTonight is a tech company operating in the hospitality industry, we were interested to hear what the firm does to keep its staff engaged – particularly as startups are known for their quirks.

“Travel should be a fun, emotional experience. Even if you’re travelling for work, it should be a fun experience and the reality is that it’s not,” Simon said. He explained that the idea of HotelTonight is to bring back the spontaneity and enjoyment that should come from travelling, revealing that begins inside the company itself – with names in a hat.

“Probably the most interesting and notable thing we do is HotelTonight Roulette, which happens once a month. Employees opt in and it means on the first Friday of the month, anyone who’s opted in brings a suitcase into the office that morning, and we make an announcement as to what the destination is going to be and who wins it,” the operating chief detailed.

“Nobody ever knows who it will be, so literally 20 people show up with cases and one person gets to go on a really cool trip – it’s all about living a spontaneous lifestyle.

“We also give every employees a quarterly stipend of credits to use to book hotels all over the place. It’s use it or lose it, so you miss out if you don’t book within the quarter, but we get a lot of people booking in all these remote places around the world and trying new things.”

In a smart move to keep things fresh, the quarterly amount goes up based on tenure, so the number of credits available increases each anniversary the employee has with HotelTonight.

To date, the company has raised more than $80m, with the largest investment coming along in the form of a $45m funding round in 2013. Simon explained how expensive it is in the industry, with a labour-intensive process to manage all hotel relationships, while scaling at the same time.

Additionally, the company has to ensure the app is perfectly polished. Simon said: “We really have a focus on innovation, surprising and delighting our customers with features they’ve never seen before. By virtue of the fact we are a mobile-only hotel platform, there are a lot of cool things we can do that nobody else can. That comes at a price – engineering resources, talented software developers.”

He noted the other priority for the company is customer acquisition, another expensive task, which completes the three key focuses the firm has for the long-term.

Looking ahead, Simon said he’s not too concerned about external threats, noting that the big guys that tried to create versions of HotelTonight were able to be fought off, given the business concentrates solely on the mobile-only concept.

However, his biggest worry is remaining agile as the business expands.

“As an organisation grows, it becomes more complex and things become more complicated with lots of different people. Figuring out how we maintain our nimbleness and ability to move fast as a large organisation is the thing I lose sleep about,” he said. 

“I hear about times when people are trying to do something and they find that roadblocks happen where they didn’t exist before, just by the fact it’s got larger than before.”

Indeed, HotelTonight bookings doubled in 2014 and Simon revealed the company is on track to repeat the success. This will be supported as the firm continues to tap into new regions, with Australia, Dominican Republic and Russia some of the countries the app launched in this year.

In addition to regional expansion, the company also went beyond its original concept for same-day bookings and extended the window to seven days, thus advance bookings now account for a significant number of sales. This was a decision based on research, which found most people consider last minute to be within the space of a week rather than just same-day.

Simon said: “It’s evidence of the fact we’re still encouraging people to question everything we do. You would have thought if there’s anything sacred it would have been staying with the same-day bookings, but we were willing to question that. When we first started there was no precedent and we made assumptions. We accept we didn’t get them all right.

“We want people to show interest and make decisions – that’s what keeps them motivated. Some companies measure success on how many employees they have, but we have never looked at it that way. By keeping things lean it means that everyone’s efforts have that much more impact.”

HotelTonight is free to download from the App StoreGoogle Play and Windows Store.