According to Sam Shank, there's a multi-billion-dollar business opportunity in offering cut-rate hotel rooms with mere hours to spare.
The CEO of the mobile app HotelTonight, now available in Toronto and Vancouver, says there's big money in helping hotels clear out their inventory at the last minute.
And he says needing a hotel room with no advance notice is a surprisingly common dilemma, especially among business travellers.
"We're going after the spontaneous or last-minute need," says Shank, noting he doesn't recommend that thrifty travellers hold off on booking a hotel until the day of their trip.
It's for "people who woke up in the morning and didn't realize they were going to need or want a hotel room. That same-day market right now is about 15 per cent of the (overall hotel business), which globally works out to be about $70 billion or $80 billion."
Founded in December 2010 in Los Angeles, New York and San Francisco, the site has grown to offer hotel rooms in more than 30 U.S. cities and Shank expects similar expansion in Canada.
"We started in three markets and expanded pretty aggressively from that point and we want to do the same thing in Canada," he says.
"Canada has been the most requested area for us outside of the U.S., so the demand there has been strong both for consumers as well as from hotels."
Starting at noon local time each day, users loading up HotelTonight's Apple or Android app can search for offers available that night, with the option of extending the reservation by an additional four nights.
"The list of hotels is curated so we personally vet them," Shank says.
"With the big guys you have to go through this list of 500 hotels in a major city and you have to read reviews and figure out, 'is this hotel the right hotel for me and am I going to have a good stay?' We ... really just focus on getting you out of the app and into a great room as soon as possible."
HotelTonight presents three options: a discounted rate for a luxury hotel, a hip downtown spot, and a more price-conscious choice.
"One of the reasons why we show only three is so the hotels are competing for those spots and that drives the price down for the consumer," Shanks says.
For Thursday, Toronto travellers have the option of booking at the Thompson Hotel for $169 (a $30 discount off the hotel's best rate), a room at the Old Mill Inn & Spa for $199 (a $60 savings compared to other travel sites), or a stay at the Delta Chelsea for $139 (about $30 better than other promotions).
Still, consumers should do their homework before immediately booking something through HotelTonight. In testing for other cities, some offers weren't necessarily the best prices available on the web.
Shanks says his team tries to watch for those not-so-good deals and will swap them out, although it obviously doesn't happen every time.
"The hotels set the price and have full control, which is one of the things they really like about HotelTonight," he says.
"We will switch the hotels when we see that happen."Suggest a correction