How about staying at a 5-star hotel but only paying 3-star prices? The OTA industry faces possible disruption with Malaysia-based startup Staydilly’s ingenuous business model

For many frequent business travelers, far from being a status symbol and a vision of luxury, traveling can be quite a chore. Most of us need to make the trade-off between luxury, which we all want – and keeping costs within a budget (not all of us are millionaires!). Well, there’s good news for those who want both – for hotels, at least! 

Staydilly is a new startup who is promising to give travelers 5-star hotels at budget prices. A seven month old startup, Staydilly already has offices in Thailand, the Mehkong subregion, Malaysia, Singapore and Australia, and boasts over 400 partner hotels across 8 countries in Southeast Asia.

Using what they term a “Mystery Hotel” model, Staydilly partners with premium hotels in the region to help them sell their unsold rooms to travelers at crazily low prices (according to Staydilly, room prices can be up to 70% lower than those of popular hotel booking sites such as Agoda, Expedia, Booking.com, etc). The only catch is, while travelers get to choose which hotel to select on the Staydilly website based on actual hotel photos, location (a map with a general location of the hotel is provided), reviews and ratings, the actual name of the hotel will only be revealed after the traveler makes the booking.

On average, Staydilly claims to be approximately 35% cheaper than other hotel booking websites. At times, they are even able to offer prices that are as much as 70% cheaper than the typical OTAs.

“We are solving two problems at once – one faced by travelers who want good quality premium hotels but do not want to pay high prices, and the hotel industry’s problem of how to fill otherwise empty rooms,” Staydilly’s CEO, Eu Jin Song, shared with Techsauce.

Eu Jin describes Staydilly as a premium outlet for hotels.

“Travelers today can choose to book their rooms from the hotel directly, like visiting a flagship storeOr, they can go to a hotel booking site online, like going to a departmental store to shop. Or, they can go to Staydilly which is like going to a premium outlet where the best deals are to be found.”

Staydilly’s solution to solving the two problems is quite ingenious. Typically, premium hotels in the region have an occupancy of between 65-68%, which mean on any given night, between 32-35% of hotel rooms go unsold.

“We are solving two problems at once – one faced by travelers who want good quality premium hotels but do not want to pay high prices, and the hotel industry’s problem of how to fill otherwise empty rooms.” – Eu Jin Song, Staydilly CEO

Traditionally, hotels would discount heavily at the last minute to fill these rooms. However, discounting at the last minute is detrimental to the hotel which sells these rooms at low prices under their own brand, thus causing brand dilution. Imagine a 5-star hotel selling their rooms at 3-star prices under their own brand – very soon, customers would smarten up to the deal and no one would be willing to pay 5-star prices any longer as they waited for the hotel to reduce their prices at the last minute.

Additionally, pricing in the hotel industry is a classic prisoner’s dilemma. If only one hotel discounts and no one else does the same, the hotel that discounts would benefit significantly. But because all hotels do this, competition is exactly the same when 5-star hotels sell their rooms at 5-star prices as when all the 5-star hotels drop their price to sell at 3-star prices at the last minute. In this scenario, everyone loses.

Staydilly solves this problem by partnering with premium hotels, only working with 3 to 5-star hotels with past user review ratings of 7.0 and above out of 10, and sells their rooms under the Staydilly brand as early as a year in advance.

  • By selling these premium hotels under the Staydilly brand, the hotel avoids the brand dilution that would be encountered were they to discount under their own brand.
  • Additionally, because Staydilly becomes a discount channel for the hotels and sells their discounted rooms early, hotels can essentially double dip into the same pool of travelers – once, under its own brand at regular prices to brand-loyal travelers, and, concurrently also selling their rooms under the Staydilly brand at discounted prices to brand-agnostic travelers.
  • Selling the rooms early helps hotels fill otherwise empty rooms, which in turn helps the hotels to forecast their occupancy better and enables them to maximize revenues and profits.

Now, how would all of this help travelers? Wouldn’t higher prices be bad for travelers? Well, today, many travelers gamble by waiting till the last moment to book their hotels. Travelers booking at the last minute may even get a lower price than someone booking their hotel rooms early. This, as Eu Jin says, is counterintuitive. Shouldn’t a traveler who can commit to a room by booking early be getting the lowest prices, as is the case for the LCC airlines? This is why Staydilly rewards customers who can make their booking early with the lowest prices.

Shouldn’t a traveler who can commit to a room by booking early be getting the lowest prices, as is the case for the LCC airlines?

Staydilly’s logic is that if they fill the otherwise empty rooms early, hotels get to increase their occupancy rates from 65-70% approaching the stay date to 80-85%. With 80% occupancy and above, hotels can start to increase prices to desperate last-minute travelers rather than giving them a discount. On average, Staydilly claims to be approximately 35% cheaper than other hotel booking websites. At times, they are even able to offer prices that are as much as 70% cheaper than the typical OTAs.

Additionally, Eu Jin says, “Staydilly does the hard work of choosing only good premium hotels in the 3 to 5-star categories with good past user reviews to work with; therefore, travelers booking on Staydilly know they are choosing only from the good hotels. Our most frequent customer response is one of surprise and disbelief that they are receiving premium luxury hotels for such low prices.”

“Our most frequent customer response is one of surprise and disbelief that they are receiving premium luxury hotels for such low prices.” – Eu Jin Song, Staydilly CEO

When asked on Staydilly’s plans for the future and the challenges Staydilly faces, Eu Jin replied, “For now we are focused on increasing our regional footprint by adding more partner hotels and improving our platform to make it even more user-friendly. Of course, as a startup, the emphasis is always going to be on getting even more travelers to book their hotels on Staydilly.”

“The challenge is getting more travelers to understand our business model. With the established incumbents already touting the “guaranteed” lowest prices, there is disbelief when a new site like ours say we have even lower hotel prices. We want travelers to know that we can beat those prices and provide better hotels at even lower prices than those found on more established hotel booking websites. After all, we’re like a premium outlet for hotels and everyone knows the best deals can be found at premium outlets,” Eu Jin concludes.
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Techsauce is proud to announce that Staydilly has been selected as the official accommodation partner for Techsauce Global Summit in Bangkok on July 28-29, 2017, as well as all our roadshows & satellite events. Delegates to Techsauce Global Summit can now select from a list of top-tier hotels near the conference location at Staydilly.com/techsauce for prices that are 30 to 45% less when compared to other hotel booking websites! 

For more information, check out our accommodation page: https://summit.techsauce.co/accommodation

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