Hospitality trends: seven tips for hospitality tech startups from alumnus Jeffrey Messud
Glion alumnus Jeffrey Messud, founder and CEO of Xotelia, describes the four steps that he followed to create Xotelia, a hospitality tech startup that manages bookings and booking channels for vacation rentals.
He also provides a wealth of insights into the changing world of hospitality and offers three tips on how he grew his company from a staff of two and zero clients in 2012, to a staff of 24 managing over 31,000 properties worldwide in more 84 countries, today.
From a day-job to being the founder of a hospitality tech startup
After graduating with a Bachelor Degree in Hospitality Management and Finance (Honors), in 2010, Jeffrey spent two years working in the hospitality industry, first as a revenue specialist for Expedia and then as the sales manager for a Mövenpick Hotel in Doha.
Then, he decided to become an entrepreneur and he went through the essential steps for creating a successful business and wound up choosing a hospitality tech startup.
Research hospitality trends
When Jeffrey decided to create a business, he did two things that every entrepreneur should do before they even think about starting a company: he researched and brainstormed and he tried to solve a problem.
After much research and reflection, Jeffrey identified two things: a business model – software solutions with service contracts – and a common problem for the fast-growing vacation rentals sector: the issue of managing bookings with the growing number of OTAs.
He founded Xotelia, a hospitality tech startup company that provides channel management solutions for vacation rental properties. Their software system gives clients a one-stop source for all of their bookings as it allows owners to manage nearly 60 platforms, including peer-to-peer websites (Airbnb, Housetrip, Wimdu, etc.) as well as booking platforms like Expedia, and Booking.com.
Solve a problem related to hospitality trends
Jeffrey picked his market based on current hospitality industry trends: the rise of OTAs, alternative lodging in the form of vacation rentals, and the sharing economy.
“It’s estimated that there are now 19 million vacation rentals, versus 900, 000 hotels,” he said before continuing to share the many facts that point to hospitality tech and alternative lodging as a great sector for starting a business.
“The industry is seeing a change in consumer habits: clients want apartments with diverse amenities, kitchens, and an authentic experience.
“For example, in Paris alone, 60,000 rental or sharing rooms have appeared over the past three years. So now hoteliers cannot ignore it, and some are even breaking two double rooms to make one apartment.”
So Jeffrey identified a few hospitality trends and aimed to solve the problems that were created by those trends.
Create a solution that clients can’t afford to do without
When asked why his idea and product were so successful, Jeffrey explained that Xotelia provides a service that was missing in the market at a crucial time: “I think that we have become indispensable, more than 70% of their bookings come from OTAs. They cannot go without these if they want to achieve high occupancy rates. Plus, guests used to reserve rooms 4-6 months in advance; nowadays, more people book at the last minute. So properties have to be online with last-minute bookings and instant bookings without worrying about double reservations.”
Xotelia solved those problems with three key services:
- Xotelia gives clients a one-stop source for all of their bookings from OTAs with a real-time booking calendar that draws the data from various channels.
- We optimize clients’ booking channels. We work with 50 different OTAs, for special markets. We look at the business and their target market, and recommend the right OTAs.
- We help clients to get visitors from markets where they might not normally have a good presence. For example, a French traveler might call to reserve a room in France, but would never dream of calling a rental in Japan to book a stay, due to the problems with language and time-zone differences. If you want international bookings you need to be on these sites.”
International growth and acceleration
Jeffrey started out with a focus on vacation rental bookings in key European markets, but he has expanded now to include new markets and extended services.
Thanks to investors who invested 1.3 million euros, the company was able to increase marketing, sales, support and IT resources. Now, Xotelia is in a second phase to go even bigger, to accelerate the growth. They have become a leader in some countries, including France and some in South America, and now 70% of the clients are international.
But Jeffrey doesn’t play down all the hard work when he said, “It was very hard. During the first years, I was not paid. Success is just the tip of the iceberg; the rest is the hard work, perseverance, etc. I work long hours, take few vacations, and continue to strive for more.”
Jeffrey’s advice for aspiring entrepreneurs
When asked if he might have any key advice for aspiring entrepreneurs, he said:
Do your homework…
“It’s important to realize that investors need to see the proof and they are serious about the numbers. Venture Capital receives 1,500 business plans per year, around 4-5 per day, and they invest in 5 businesses per year. It’s highly competitive, selective. I have a friend trying to get some venture capital but not getting through because the numbers on he projects aren’t good enough, the team is not qualified enough, so they don’t get investors.”
Don’t be easily discouraged..
“Motivation is the starting point, but you have to be persistent and diligent. There was a huge business contract I wanted, and I had to go see them every month until we got it. You have to keep at it until you get it. Some people start the business and if one person says “it’s no good” then they give up. You have to believe in it and put in the hard work.”
Do be open-minded and listen to others..
“Open mindedness is also key. Listen, take advice, be open to the expertise of others, listen to everyone. Sometimes it’s a waste of time, but often you get good things.
Some entrepreneurs think they are just going to do it their own way, without listening to feedback, and that’s not good. If I have a marketing team and a sales team, and if they tell me that this is the way to go, I take their advice seriously. It’s impossible to know everything, you have to delegate and have faith in your teams.”
Did Glion prepare him to be an entrepreneur in hospitality?
When asked about how his Glion experience helped him to reach for this dream, Jeffrey said that Glion gave him a foundation of hospitality and business knowledge and an international outlook:
“I have many Glion friends who worked in hospitality and then started their own businesses. From my class, I think I’m one of the few who went into the tech sector for hospitality, yet I know that Gauthier van den Eynde is working for Uber. Glion teaches us the foundations, and then it’s up to us to do the hard work.”