STARTUP STAGE: RoomRite is a resale marketplace for group hotel blocks

RoomRite

RoomRite CEO Michael Weiss describes the startup as "the StubHub" of room blocks - enabling meeting and event professionals to sell rooms they no longer need or buy rooms when there is limited time or inventory. 

Founded in 2023, RoomRite is a marketplace for the buying and selling of blocks of 10 rooms or more. The selling party pays RoomRite 15% of the cost of rooms sold. 

What is your 30-second pitch to investors? 

RoomRite is helping the meetings and events industry mitigate paying an estimated $21 billion in annual hotel room attrition penalties. Rather than paying costly fees for failing to fill their contracted room block, meeting and event professionals can now list their excess hotel rooms on RoomRite’s proprietary resale marketplace, where other groups can book the available rooms at the larger group’s contracted rate. Sellers reduce their financial liability, while buyers receive rates and rooms not available elsewhere.

Describe both the business and technology aspects of your startup.

Groups struggling to fill their contracted room block can list their excess hotel rooms 60 to 120 days prior to their event on RoomRite’s proprietary resale marketplace, where other groups can book all or a minimum of 10 rooms at the selling party’s contracted rate. Rooms sold on RoomRite count toward the selling party’s room pick up, while the buying party enjoys significant cost savings and access to room inventory that is otherwise considered unavailable; which is particularly helpful when looking to book within a popular market on relatively short notice. Additionally, hoteliers can add products and services to the resale listing, such as a minimum hotel food and beverage credit.

Our patent-pending technology is largely built on PHP Laravel and MySQL running on AWS. Current and forthcoming software integrations will allow us to scale and make our platform sticky. The user interface is similar to popular online travel agency sites, making it easy and familiar to book hotel rooms.  

Give us your SWOT (strengths, weaknesses, opportunities, threats) analysis of the company.

• Strengths: We have an experienced founding team, a provisional patent to protect our intellectual property, a first-to-market advantage and an equitable approach to solving a problem that affects multiple parties.
• Weaknesses: Just like many other startups, we have limited brand recognition, manpower and resources at our early stage.
• Opportunities: The timing of our launch could not be better. There are more events on the books in 2024 than before the pandemic. The sheer volume of events not only increases our pool of potential room block suppliers/resellers, but it also makes it more difficult for groups to book a block of rooms on relatively short notice through traditional sources, which will force groups to turn to a secondary marketplace like RoomRite.
• Threats: While we have a first-to-market advantage and protected intellectual property on the resale side, we will still have to contend with incumbents on the buying side of the market.

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

Depending on the size of the room block and its level of attrition, meeting and event professionals can spend up to $250,000 on empty hotel rooms. By reselling those empty rooms in advance on our proprietary marketplace, meeting and event professionals can reduce their financial liability. 

For groups looking to book hotel accommodations with just a few months’ notice, they are left with limited or very expensive options. RoomRite reintroduces rooms back into the market, allowing smaller groups to access hotels, markets and rates not available anywhere else.

Room attrition is also a pain point for hotels. Hotels often lose business relationships over attrition fees. By allowing their client to resell their excess rooms, hotels won’t have to collect attrition penalties as often or significantly as they currently do, which increases the likelihood of retaining their existing client. RoomRite also backfills the excess rooms for the hotel for free, which not only solves the immediate problem, but helps the hotel develop future business opportunities with the new group RoomRite brought. Lastly, hotels can add additional products and services to RoomRite listings, such as a minimum hotel food and beverage credits, which creates incremental revenue for the hotel.   

So you've got the product, now how will you get lots of customers?

Our room buyers and resellers are both meeting and event professionals. We can reach our target market through hosted-buyer events; professional associations; partnering with destination marketing organizations; trade media; social media; and through our commission-based referral program for meeting and event professionals.

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

Not only has our founding team experienced hotel room attrition firsthand as both a hotelier and as a meeting professional, but we have validated the problem and our solution with hundreds of meeting and event professionals, as well as hotel executives and destination marketing organizations. Our total addressable market is $21.2 billion.

How and when will you make money?

We charge the selling party 15% of the rooms sold on our marketplace. For example, instead of owing a hotel $10,000 in attrition fees, if the event professional sold their excess rooms on our marketplace, they would pay RoomRite $1,500 and owe the hotel nothing, which would save the event professional $8,500 overall. We just launched our marketplace with $1.5 million in room inventory, so revenue is imminent.

What are the backgrounds and previous achievements of the founding team?

Our founding team has more than 70 years of combined experience in meeting planning, hotel group sales and partnerships, event marketing and business development and event technology development. We have worked for brands such as Hilton, Aventri, etouches, Zentila, Multi Image Group, Bonnier Events, ViewStub and more. 

How have you addressed diversity and inclusion within your business?

RoomRite is comprised of male and female founders; and as our team grows, we are committed to employing a talented, diverse workforce in an inclusive work environment.

What's been the most difficult part of founding the business so far?

We have spoken with a number of potential users who love the concept but seem hesitant to take a chance on a brand new company - especially one that is challenging conventional processes. So we are investing time and money to develop our brand’s credibility through sponsorships, memberships, media coverage, awards and more.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

The problem we’re solving is real, expensive and well-known within the industry. Our solution is unique, proprietary and delivers a quantifiable return on investment. We know we will become “one of the lucky ones” because of the reactions we receive from prospects and partners after a demo or conversation. 

A year from now, what state do you think your startup will be in?

A year from now, we expect to have more than $25 million in room inventory resold; executed several strategic partnerships and software integrations; filled some key positions on our organizational chart; and built a brand that our target market trusts.

What is your end-game (going public, acquisition, growing and staying private, etc.)?

While acquisition is the most likely scenario, we are confident that if we focus on delivering value to the market and properly scale our operations, the right exit opportunity will present itself.