How often have you ordered a hotel room but been compelled to call off the trip and pay a heavy cancellation fee? In the US alone this happens 80 million times annually. Bearing in mind that hotel cancellation fees can range from $100 to the full amount of the room, this means the annual market in the US is worth $8 billion.
Hotel marketplace Roomer, which aims to match those cancelling hotel rooms with travelers looking for good deals, has raised $2 million from BRM Capital in a first-round of financing.
Based in Tel Aviv, Roomer was founded in 2011 by CEO Gon Ben-David, VP business development Ben Froumine, and CTO Adi Zellner.
Ben-David said, "We are building the eBay of hotel rooms. The idea is that if you've ordered a room in New York and can't travel and use it, then you can post the reservation on Roomer and not have to pay a cancellation fee of hundreds of dollars. So even if you sell the reservation at half price, you've still recouped half the money that you've paid the hotel while someone else gets an excellent New York hotel deal."
Ben-David added, "It's a very quick and secure experience. All the user has to do is publish the reservation and transfer the approval he received from the hotel or the site where he bought the reservation which can be automatically identified."
The start up is currently in its beta site phase and offering rooms in New York, Las Vegas and San Francisco but Ben-David stresses that the company plans expanding.
The service is presently offered free but in the future it plans charging a commission on every successful hotel transaction.
Ben-David stresses that the company's platform provides a win-win situation for both those selling and buying rooms and the hotels themselves who earn 40% of their profit from charges run up by travelers when they actually occupy rooms.
Alongside the financing round, Waze Ltd. president and co-founder Uri Levine is joining the board.
Published by Globes [online], Israel business news - www.globes-online.com - on March 5, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013