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Ask HN: Need help monetizing our site - suggestions (pivot or otherwise) welcome

7 points by dajo ↗ HN
Dingadeal.com lets groups get hotel deals. Groups (> 8 people) enter their accommodation requirements, and let hotels bid for their custom. Hotels are notified and have 24 hours to reply via the website with their best offer.

The group views & chooses the best hotel deal. They can accept the offer on the website, at which point the hotel is notified & supplied with the group's contact details. The hotel contacts the group to finalize the arrangements.

Our revenue model is commission-based. We don't accept payments on the site, so we invoice the hotel for a certain % after the group has stayed. Two main problems we're facing:

1. Invoicing hotels after the group has stayed. Due to the nature of group bookings, requirements can change between when they book on the site and when they stay in the hotel. For example, the number of people in the group can fluctuate. We rely on the group for feedback on how many ended up staying, what was the final price etc. It's messy to work out the commission we should charge the hotel.

2. Conversions rates on the site are extremely low. Conversion rates for a big online group booking competitor are around the 1% mark. That gives you an idea of where we're at. It's easy for the group to look at all the offers and then continue with their booking offline. There is no major incentive to complete the booking via our website. We do offer features such as group invoicing, but group organisers are rarely getting that far in the booking process.

So, based on those two issues, we're looking for alternative means of generating revenue. Some things in our favour:

- We generate a decent amount of targeted traffic via our blog, so we can get the right people to our site

- Group bookings is a lucrative area for hotels, so they do tend to make offers, even when the conversion rates are so low

Any suggestions are welcome, thanks.

18 comments

[ 2.8 ms ] story [ 42.4 ms ] thread
tstegart
What about integrating group organizer tools to keep organizers hanging around and using you. Like itenerary tools, ability to send out emails to the group about changes, tools for splitting up costs evenly, that sort of thing. If they use you to organize, they might use you to book.

Also, question: you say it's difficult keeping track of commissions; if you did keep track of them well would that be enough money, or are you looking for an alternative revenue stream?

dajo
I'm not sure if you have seen our video on our website but we have certain features (e.g. - invoicing functionality and rooming list feature) in the group organiser's dashboard already. There are lots of features which we could potentially add down the line to add value to their overall offering.

We are essentially looking for an alternative revenue stream, because we are not converting enough groups through our website. We don't want to arrive at a situation where hotels aren't winning any business through our website. So we are essentially hoping to move away from commission to something else.

zupreme
To increase your dollars per conversion: You need to add other travel related services that pay an affiliate commission. Some examples are:

Taxi/Limo services Concierge Services Meal vouchers/deals Airline tickets Tour packages etc.

To increase your conversion rate: Get a valid SSL certificate and redirect all visitors to SSL via .htaccess Remove or minimize everything on the homepage not related to conversion (with the exception of the G+ and FB buttons). Use Groupon as an an extreme example of this. Start a Adwords remarketing campaign to follow your unconverted visitors as thet browse other sites in the Google Content network.

Those are the things that immediately come to mind.

dajo
Thanks for you feedback. An affiliate partnership would certainly be interesting. How would you go about setting this up? Would you use something like Commission Junction?

One area we are exploring is in relation to partnering with other travel-related services. A selling point for us is that regardless of whether a group accepts a hotel's deal or not, we know that this group will more than likely be in a certain town on a certain date.

So, when a group registers on the site, we can have an opt-in email option. Travel-related services in the locality then have a chance to advertise to this group via an email sent to the group prior to arrival. "10% discount on golf for your group this weekend in X Golf Club". Things like that.

We're trying to tease out a few different revenue models, so thanks for your suggestions.

verganileonardo
Some ideas:

1. Charge the hotel for each lead generated After the initial search, ask for the user email and phone number. Sell this number to the hotels. But probably your users will not like that...

2. How much do you make on commissions (on %)? Lets say a hotel room would cost $1000 and you make 10% on commissions. Then, instead of quoting the price as $1000, you show the price as $990. You book the room for $900 (1000 minus your commission) and make $90 on commissions (instead of $100) On your site you can charge for accommodations only and all other expenses (drinks, food, etc) would be paid on the hotel.

dajo
Thanks for the suggestions, I like the idea of a perceived discount offer, that's something we'll look into implementing.
staunch
Maybe charge a flat rate for ranges of people. That way you don't need to be exact. Charge the hotel $100 if 5-10 people booked and $250 if 11-20 booked, or whatever. Just make the math work out to be roughly what you'd make if things were exact. Maybe you can earn even more like this.
dajo
That's not a bad suggestion. However, it still doesn't overly help with conversions. If groups are coming onto our site for quotes and then going off directly to finalize the booking. We need to start increasing our conversion rate and thus increase the revenue we do generate through the site. However, a flat fee is not a bad idea as it does remove the issue of fluctuating numbers.
staunch
Yeah, my guess is your only focus should be on driving up demand. If you had thousands of people booking rooms it wouldn't be hard to make money off them. With small numbers it will probably never work that well.

Maybe you can come up with some new approach by just focusing purely on what it takes to get more people booking rooms. Maybe by offering deals (not just bidding), doing deals with conference organizers, etc.

shyn3
"Partner" with the hotels to offer them a higher ranking in terms of where they are displayed and the font size of their data.
dajo
Offering a priority listing is definitely something we have being considering. Thanks for the suggestion.
tstegart
Go with sponsored search, its way more above board, people recognize it from Google and its easy to integrate into the search results (usually). That way you get commissions from people who book, you get money from people bidding on ads, and hopefully you can get commissions as a travel agent when people click through an ad.
joeytom
Are there any reasons why your conversion rates are low. Are there ways you could optimize your site to increase conversions.

Maybe you are heading in the wrong direction with advertising?It might be better to stay on the path you were going and focus on increasing conversions??Look at how booking.com and how they convert, might give you some ideas.

athgeo
Just an idea, but you could look at catering to the non-English speaking crowd. Specifically, the Chinese love to travel in big groups and they will usually skimp as much as they can on accommodation, in order to splurge on gifts and souvenirs. A cursory search turned up only very few sites that offer international hotels group buying options, even though group buying is extremely popular in China. Obviously, it would take you some time to understand the Chinese and their needs, but I'm pretty sure it'd pay off in the long run.
Meltdown
Are you targeting the SME market?

1. Lots of companies bring their sales staff away on motivational trips. Phone them up, get all the details (you do all the leg work for them!.. take the pain out of organising/booking something like that).

2. You're in Ireland...target the London market.

koopajah
What about the model used by flightfox where the customer pay a fee upfront to find the best deal available? It would change a bit from what you are currently proposing but it could be a lead.

I know it can seem strange/hardcore at first but if you guarantee the best deal they can get, in the end you might make it work.

You could maybe offer this option at first and see how many people are willing to pay to ensure a good offer by hotel for a large group of people.

gyozaking
Show the offers to users for free, but obfuscate the hotel names until the users pay a fee.
SHOwnsYou
I think a major factor in conversions isn't that people are seeing offers and booking it themselves. The problem is that people sign up and fill out a form (and register) expecting to see prices right then, and instead have to wait at least an hour to see prices.

It may be better UX to show some hotels immediately via a hotel booking API and have very prominent messaging that they will receive lower offers within 24 hours. I'm already assuming you're emailing them with new offers (with tracking pixels) to determine if they're even opening, if they click through, and then what they do.

You should accept payments on your site... for several reasons.

1: Increase conversions - Not only because it's a quick and logical flow through the site, but also because you may be deal with people that don't want to talk to hotel agents on the phone and would rather get everything done online.

2: Know exactly how your business is doing - If you're just relying on the hotel to pay you the correct amount, you're leaving so much information about your business on the table. You can gather some, but informally. It'd be useful to know at what step people aren't converting, what is triggering changes, etc.

3: Shift responsibilities - Make the hotels invoice you.

4: Influx of capital. Paying hotels every month still makes it look like you have a lot of activity on the books. I dont know what your goal with the site is, but activity like this would be good to show to investors, interested buyers, etc.