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Same-day booking apps will disappear in 3 years, says HRS' Ragge.
Tuesday, 9th July 2013
Source : Yeoh Siew Hoon
After social, same-day booking apps are the most over-hyped subject in travel and Tobias Ragge, CEO of HRS, the hotel portal, believes most of them will not be around in three years.

4Hoteliers Image Library(Pictured: From left, Ralf Priemer, board member, hotel.de; Jason Long, VP Business Development, HRS; Tobias Ragge and Christian Lukey)

Here in Singapore to stake the claim of his company, founded by his father, to be the world's number one in the managed business travel space, Ragge said same-day booking apps were not doing anything new that major OTAs and HRS weren't already doing.

Even though he agrees that Asia will leapfrog Europe in terms of mobile activity, he said the same problem that faced Groupon will haunt same-day booking players. "You need huge sales force in inventory, you need to negotiate everyday rates. Bigger OTAs and companies like ours have network rates, we can activate it automatically. If I have to build up a system for a small volume of bookings, it's not going to work.

"In Asia, you have a few of these players now. No one is making money, they will die out."

He said even HotelsTonight, the leader in the space, which has raised US$35.7 million to date, would struggle. In July 2012, HotelsTonight reported two million downloads and in October, acquired Prima Table, a restaurant reservation start-up, an indication perhaps that it needs to go beyond hotels to scale the business.

HRS has a Hotels Now app with 10 million downloads, offering 2,000 properties in 120 countries. Said Ragge, "You have to differentiate between smartphones and tablets. Smartphone bookings are dominated by business travellers – 75% are booking same day and 65% booking single rooms. The tablet is more of a couch device, usage spikes after 6pm and it's used more by the leisure user. So the design of the user interface has to be different – smartphone is about transactional excellence, tablet is more about discovery.

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