Climber provides independent hoteliers optimal, dynamic pricing using local data and customer analytics
- Lisbon, Portugal, Portugal
Categories: Content & Information Digital B2B
Co-Founder and CEO
Co-founder and CTO
Front-End Dev & Design
Sales & Customer Experience
Expansion Coordnator (France)
Learn more about convertible campaigns.
Climber Hotel is a hassle-free and smart Revenue Management Solution (RMS) that helps independent hotels maximize their profit through the automation of their pricing system.
100% fully automated price recommendation and distribution to the different internet distribution channels (Booking.com, Expedia, hotel website, GDS).
We aim to be much easier to use than our competitors. No training is necessary for the hotel. Climber’s software is 100% cloud-based.
Climber Hotel gathers demand data from several external sources and cross analyzes it with the internal reservations history from the hotel. This way we are able to recommend the optimal price at which the hotel should be selling their services through a pricing elasticity algorithm, which we have developed in-house. We use behavioral science to run real-time micro segmentation and external sources we use are events, competitor’s prices, weather, air traffic, online shopping regrets and denials and the hotel’s online reputation.
They key terms which apply to the Climber Hotel convertible are as follows
• Valuation cap - £1.15m.
• Discount - 30% discount to the valuation set by an Equity Fundraise.
• Conversion is triggered by:
o An Equity Fundraise – defined as the Company raising investment capital of at least £450,000 from one transaction or a series of transactions, in exchange for the issue of Ordinary Shares. The Seedrs fundraise does not count as a transaction.
o A Change of Control of the company (transfer of more than 50% of the share capital), on which shares are issued to Seedrs investors prior to the change; or
o An IPO – being a listing of the company’s shares on a recognised stock market or secondary market.
• If conversion has not been triggered by the longstop date (12 months after this convertible) shares will be issued based on the lower of a minimum company valuation of £800,000 or the price for a share issued during the period.
We estimate that Climber will help hotels save 6-8 hours/week and increase revenues 8-10% (industry averages).
By being easy-to-use and fully automated we removed the middle man - spreadsheets - where the hotel managers used to do their budgets, forecasts and revenue analyses, we now allow them to save time and to focus on what is essential for the hotel - the guest experience.
If the hotel is already integrated with one of Climber’s cloud PMS providers, the plug-and-play lead-time can be as fast as 5 days, so the hoteliers can start optimizing pricing right away.
Substantial accomplishments to date
• Signed partnership agreement with a large hotel software vendor with 7,000 hotels around the globe.
• We have been able to pull together an amazing permanent team of 5 people and a complementary team of 7 people, all working pro-bono. We believe that we have got all of the competencies we need to take this company to the next level.
• Hosted a Revenue Management Seminar in Lisbon with 100+ hoteliers in attendance.
We sell through two ways:
• Subscription-based plan where we charge £2.16/room/month to the hotel. An average 100-room hotel would pay £2376.35/year with a 10% year discount.
• We also have a commission-based fee of 30% to re-sellers and we already signed a distribution partnerships agreement with hotel software vendor spread across the globe with 7000 hotels associated.
Use of proceeds
The funds will be canalized to finalize the beta-version and get the first 10 paying customers. We will pay for our Development Team and Sales & Customer Experience team and make Climber eligible for a further round of investment.
Our target market is 3- and 4-star independent hotels with more than 50 rooms.
The majority of independent hotels operate below their revenue-generating potential: they are rarely booked at full capacity, and they almost never sell rooms at an optimal price. This is because only large hotel chains can afford sophisticated revenue management tools, leaving independent hotels without basic analytic software to help them better charge the right price for the right sales channel at the right time.
Because Revenue Management Solutions (RMS) available in the market are either too expensive or complex, we estimate that only 4% of the hotel market uses RMS. Additionally, the vast majority of the current RMS target multinational hotel chains or large 5-star hotels. There is an estimated untapped market (3 and 4-star hotels) of approximately £1.3 billion/year that we aim to tackle.
Characteristics of target market
We estimate that independent hotels lose £5.77 billion in potential revenue each year in Europe alone. For the average independent operator, this amounts to approximately £202k per year, or 6% of their annual revenue.
There are about 200,000 hotels globally. Out of those, approximately 50% are 3- and 4-star hotels with more than 50 rooms, representing what we believe to be total addressable market of £1.3 billion, the current expenditure with revenue management software (RMS).
Our market research of 900+ hotels shows that 34% of the hotels enquired clearly expressed that they want to buy a revenue management solution in the near future, 85% of those consider easiness of use the most important feature on an RMS and 56% of those consider existing revenue management solutions expensive.
We have signed a distribution partnership agreement with an established hotel software vendor spread across the globe (eRevMax – 7,000 hotels) and we have ongoing talks with others 3 major players. Our strategy is to integrate with major hotel Property Management Software (PMS) across the globe in order to tap into the markets we want to expand next, such as Germany – June'16, France – Jan’16 and USA – Jan’18.
We have signed letter of agreements from 3 established hotel brands and we have 160 hotels already signed-up to run a pilot test. To start and launch into the market, we selected 10 hotels who already use HostPMS and we will start running the beta-tests in the January 2016.
Climber is a fully automated hotel revenue management tool for independent hotels.
• IDeaS - we feel that this is too complex to use, expensive and focused on luxury hotels and larger hotel chains. 7000 clients globally. Do not have automatic price distribution.
• Duetto Research - USA startup. £45,379M in funding. Focus is on large hotel chains. Expensive. We understand that they do not have automatic price distribution.
• PriceMatch - French startup acquired by Booking.com.Focus on independent hotels. We understand that they do not have automatic price distribution. We believe that they no longer have unbiased-autonomy since being acquired by Booking.com.
• Small players with some local relevance include: i-Rates, BeonPrice (ES), MaximRMS (USA), RainMaker (USA) and Xotels (ES).
We expect that independent hotel operators will prefer our solution because it’s simpler to use, intuitive, and more affordable than existing dynamic pricing tools, and it's more accurate and easier than using spreadsheets. In other words, we consider that Climber is more user friendly than the existing solutions.
Climber also includes automatic price distribution to different reservation channels, which is a feature even the more costly competitors do not offer.
In short, we expect our key differentiators to be:
• Full automation (from optimal price suggestion to online distribution).
• Real-Time market Data
• Pricing based on micro-segmentation.
• Easy to use interface.
• Low CAC (customer acquisition cost).
• Strong customer service (focused on providing a better service).
• Fast plug-and-play lead-time.