Now, dictate the price you want to pay for your hotel stay, cab ride!

Reverse bidding, widely used in mature economies, is fast catching on in India

Being a frequent traveler, Rohit Khetrapal always wondered if a hotel is running low occupancy, why can’t he bargain and get a better-than-the-published tariff. After all, the inventory is perishable, that too, on a daily basis. That’s when he discussed this problem with Simran Sial, who comes from a hospitality background, and along with him co-founded FindMyStay, a reverse bidding platform for hotel booking in 2013 in Delhi.

Dilution of rate across platforms leads to the dilution of brand equity and dilution on one platform leads to the rate parity issue as hotels are bound to maintain the same rate across all online platforms. This is where we saw an opportunity and decided to bridge this gap by disrupting the ecosystem,” recalls Khetrapal.

Reverse bidding, as the name suggests, is the opposite of bidding. While in bidding, you quote higher than the reserve price, in reverse bidding you bid as low as possible against the reserve price, which in FindMyStay’s case is the hotel’s best price on other travel portals.FindMyStay acts as a customer-hotel facilitator by giving travelers the ability to have a control on the price they wish to pay and the choice of hotels they would like to stay in. Then, the hotels that accept this price offer are shown to the customer in a one-to-one environment. In the process, customers save way more than deals available elsewhere and also get additional promotional discounts to make the deal even sweeter.

More than one lakh hotel rooms go unsold daily in India. Through current platforms, hotels are unable to sell it at lower price points as it dilutes the brand equity. Hence, we get the inventory the hotel foresees going unsold for the next two months and get our customers to offer their price for the inventory in a private one-to-one platform.

Hotels get to sell more without disturbing the brand equity as it is a one-to-one platform with individual customers for specific dates and customers get to save more than anywhere else. It’s a win-win for both hotels and customers,” he explains. According to him, the model adopted by FindMyStay is highly beneficial for hotels to pre-empt inventory, which they think might be left unsold as customers are allowed to book hotels up to two months in advance.

But, what makes FindMyStay stand apart from other apps in the space? One of the major reasons why it fares far better than most last-minute apps is that it provides both customers and the hotels a secure, password-protected one-on-one environment to conduct transactions in and every deal offered by the hotel is for a particular bid for the customer and valid for 48 hours only.

“This ensures that there is no disturbance in the ecosystem. FindMyStay holds an edge over last-minute apps that are unable to provide any value for business city hotels where a majority of bookings are done within a three-four-day window. These apps also struggle to provide viable options in leisure destinations during peak seasons,” Khetrapal adds.

Jumping onto the bandwagon is Gurgaon-based cabs aggregator ixigo cabs, which recently introduced outstation cab bookings by building a marketplace of intercity cab aggregators and vendors with a unique reverse bidding model. Under this model, over 250 outstation and intercity cab vendors will compete internally, getting the customer the lowest-possible fare in less than 120 seconds.

The intercity cab booking market in India, which is largely occupied by unorganised taxi companies, is estimated at $9 billion.
“Our primary objective has always been to simplify a traveler’s life, and in this case we are doing so by getting them the best outstation cab deal in just a few minutes. In addition, we are giving travelers the option to book a one-way cab, helping them save up to 50 per cent on the total cost. Within just a few weeks of the launch, we are responding to over 2,000 cab queries a day with an average ticket size of Rs 6,000. We foresee this category to become bigger than intra-city cabs over time,” says Venus Dhuria, Business Head (cabs), ixigo.com.

FindMyStay has 3,000 hotels, including 250 hotels in Andhra Pradesh and Telangana, on its platform. It is targeting to touch the 4,500-hotel mark in the next nine to 12 months. FindMyStay, which had raised an undisclosed amount in a pre-Series-A round of funding from Indian Angel Network in July this year, is looking out for Series-A from an institutional investor in a month or so. “We are looking to raise anywhere between $4 million and $5 million (Rs 27-33 crore),” he says.

Stating that reverse bidding for hotel booking is widely used in mature economies and that it has been prevalent in India for quite some time, Khetrapal says the hunger to negotiate and get the best bargain has been increasing FindMyStay’s traffic-to-bid ratio since the last six months.

By K Rajani Kanth