It’s never been easier to start a travel tech company, but it’s also never been this difficult to scale one. Former equities analyst Tom Underwood became CEO of Stayntouch because he believes the startup can weather the odds.
You’d think most hotels wouldn’t attempt to overhaul their travel tech during a pandemic that’s hurting revenue and shrinking staff. But that’s not the story for stayntouch, a manufacturer of hotel property management systems.
To find out more, i CEO interviewed Tom Underwood on Wednesday at the company’s headquarters in Bethesda, Maryland. Underwood said his company is growing.
- Hotels use Stayntouch’s full property management system to manage 65,000 rooms, up from 40,000 in March 2020.
- December was the company’s best quarter for new monthly recurring revenue since its inception in 2013, although the company didn’t disclose the amount.
- On Wednesday, the company announced that it had signed on coin house, a next-generation hospitality brand. It apparently stole the deal hospitable, another real estate management service provider.
- Other customers are e.g First hotels, Conscious hotels, Margaritaville, Hotel Group Valencia, and Hotel mode.
- Most rooms served by Stayntouch belong to traditional non-boutique brands such as show boat in Atlantic City, Sage Hospitality Group, village hotels, and Innisfree. But the company expects plenty of growth with emerging hospitality players similar to Mint House.
- Google will use Stayntouch’s property management system to manage its staff hotel residences in the company town is being built on a campus near Mountain View, California. It is for five objects with a total of 302 rooms. Given Google’s security requirements for working with partners, this is an interesting confirmation.
Is Stayntouch a serious contender?
- The company looks small. 2020, Tyler Morse, the impresario behind the US hotel operator MCR developmentT — the owner of the TWA hotel and other real estate – capital raised through a fund from which Stayntouch can be purchased shiji. The price was $46.8 million, Chump change compared to $4.6 billion Oracle Hospitality paid for Micros into which it was converted in 2014 world market leader Oracle Hospitality.
- Underwood said Stayntouch’s transaction price did not reflect the full value of the company because it is a unusual forced sale.
- The fund championed by Morse was raising additional capital at the time of purchase. That has given the CEO resources to expand. Underwood, which was hired a year ago, has hired 20 employees, including a chief revenue officer and a chief technology officer.
the Company appears undercapitalized compared to Oracle Hospitality and other competitors. The landscape includes:
According to Underwood, Stayntouch has an ownership structure that lends itself to further outside investment that could fuel the company’s growth.
- “We are an independent company where all employees have shares in Stayntouch, similar to a VC [venture capital-] supported startup,” Underwood said. “We are a prospect for additional investor capital.”
underwood has about his career, moved back and forth between equity analyst and operational decision maker at online travel companies. So he has an analyst’s overall perspective on the hotel software sector.
- Previously he was CEO of room 77, Chief Financial Officer of a corporate travel agency Lola, Senior Vice President at orbit, a leading consumer e-commerce stock research firm Add Bricklayer, Director of Revenue Management at price line, and an equity analyst at Morgan Keegan & Co.
- He said the two most important metrics to evaluate hotel software companies are growth momentum and gross profit margins.
- He didn’t want to give details. But he said he joined Stayntouch a year ago because he liked the numbers he saw and that the numbers have improved since then.
- Underwood sees consolidation in the hotel tech sector over a five-year period. Tech categories in general tend to be dominated by a few players thanks to economies of scale.
- “There will absolutely be fewer players with larger market shares,” Underwood said.
Industry experts discuss the correct configuration of operating software in the hospitality industry.
- “When I joined Priceline twenty years ago, the exciting change was distribution with the introduction of Internet-based online shopping,” said Underwood. “The exciting change is now in the content, so to speak. The product is evolving into new alternatives away from the traditional hotel, traditional holiday home, etc.”
- Examples include hotels now offering multi-night guest stays with no housekeeping, and hotels selling packages that bundle a stay with free access to a co-working space or off-site gym.
- “Hotel software must be flexible enough to adapt to the evolving product,” Underwood said. “The PMS and the CRS [central reservation system] come together to rise to the challenge.”