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How Hotel Suites Can Compete With Airbnb And Vacation Rentals

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How Hotel Suites Can Compete With Airbnb And Vacation Rentals
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Robbie Bhathal, father and husband, loves to travel. However, in recent years, he’d been having trouble finding hotel rooms that could accommodate his whole family — and they weren't big fans of vacation rental services like Airbnb.

Sometimes the problem was not availability, but the fact that he couldn't know what kind of room they would get in advance; if he booked two rooms, one for his wife and him, and one for the kids, there were no guarantees that they would not be down the hall from each other.

This is a problem a lot of other people traveling in groups must be having, he thought as he discussed the issue with Stephen Caudill and Kyle Killion. And so, Suiteness came to be.

Suiteness is the first and only platform that allows consumers to book suites and multi-bed rooms in hotels.

“Historically, when hotels distributed inventory, their main purpose was to get the base-level rooms out,” CEO Robbie Bhathal told Benzinga. The reason for this is that occupancy rate is one of the most important metrics for hotels.

Vetted Rooms

Unlike Priceline Group Inc (NASDAQ: PCLN) or Expedia Inc (NASDAQ: EXPE), Suiteness vets the rooms on its site to ensure its clients get what they need, focusing mainly on groups of four to eight people. So, the best deals you’ll find on their site will be for two-or-three-rooms suites with connecting rooms, rather than single-occupancy rooms or spaces to accommodate 15 passengers.

“We want to be the access point for anybody to get whatever they want. Sometimes it’s groups, bachelor parties and weddings that book our rooms; sometimes it’s companies that book them to do meetings instead of going out and trying to get WeWork spaces or something like that,” Bhathal said.

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There are no hidden fees in Suiteness, the CEO added. However, competing on the pricing side against travel behemoths is not the company’s model. Instead, its emphasis is put on showcasing unique accommodation that cannot be found elsewhere. In this same line, the company offers a 24-hours concierge service to satisfy all of its clients' needs.

Business Specifics

Beyond the consumer side of Suiteness’ business, Benzinga wanted to know about financials and growth prospects.

This VC-backed company is a Y-Combinator graduate that has been delivering impressive growth. Investors include Bullpen Capital, Global Founders Capital, YC's Continuity Fund, Kima Ventures, Altair Capital and HVF – which is the personal fund of Paypal Holdings Inc (NASDAQ: PYPL) co-founder Max Levchin.

“This is a capital-heavy business, so most of the money we got from venture capitalists is going to technology build, rather than marketing,” Bhathal added.

The company doesn't disclose revenue at this time, but is already monetizing its user base by charging hotels (never consumers) for every reservation made through its site. “We have a foundational cash business,” he said.

Hotel partners include Hilton Worldwide Holdings Inc (NYSE: HLT), Viceroy Hotels Ltd. and Caesars Entertainment Corp (NASDAQ: CZR), among others.

“This market is big enough for niche players to come in and create very successful companies or niche parts of it. Travel is a $2 trillion industry worldwide,” Bhathal concluded.

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