Tim Hentschel is the CEO of HotelPlanner.com, probably the most important traveling booking platform you haven’t heard of.
Tim’s platform handles billions in transactions a year, powering all the booking sites you know.
Altogether, HotelPlanner provides group travel technology expertise to over 4.2M group event planners while servicing $7B in group hotel booking requests in 2017.
(They expect $10B in 2018.)
Since launching in 2003—bootstrapped (the way we like it, WealthGANG)—Tim has raised money, paid back investors, scaled the platform to billions in transactional value.
And as of this year, he’s also won Cornell University’s award as Hospitality Innovator of the year, taking the prize from Lyft CEO, John Zimmer.
This is his story.
HotelPlanner.com was an idea birthed from frustration with inefficiency.
“There was a huge pain point in rate procurement process for groups,” he says. “It would take days, sometimes weeks, to get an answer.”
“A sales manager would ask you where your place of work is, all of the details about your contact information. They will come back and continue to keep asking and asking until they give you a rate,” Hentschel explains.
Like a true entrepreneur, Hentschel was able to simplify the group booking process. “We just ask where you are going, what your budget is, the dates and the number of rooms.”
And boom, the business was born.
Next thing you know, Hentschel and co-founder John Prince scored a bevy of Q-rated clients like Best Western, AT&T, and Walmart.
Flipping the model
Despite the simplicity of the process, the business model is quite unique. Hentschel says the site launched on the back of an uncommon financial engineering decision.
What it effectively does is enable a reverse auction process—permitting hotels to bid on travel groups.
Whatever the occasion, the users can submit their requirements like the number of rooms needed (with a minimum of 9+ rooms per night) and the dates, and companies will compete to get the business.
Thus ensuring the best rate for the group.
Better yet, the brand has partnered with lots of affiliates like Orbitz, Kayak, Travelocity, Hotwire, Priceline, helping them tap into an expansive user base.
The process is extremely simple, and leaves no room for extra hassles.
Instead of screening for excess info, HotePlanner.com scratched out all of these requirements.
In addition to the current client list, the travel platform is betting big on expansion through acquisitions.
After its launch, the company’s acquired TravelTicker, Hotel Hotline, and very recently folded accommodation auction site BackBid into HotelPlanner’s suite of services.
It’s a disciplined approach, he tells us.
“Our initial valuation was based on the cash we needed to reach profitability in relation to the equity we were willing to give up. Our 60 pages of market research helped investors believe that we could hit our targets with a very small initial raise by today’s standards,” Hentschel says.
“Our research was correct, and we hit profitability in our second year, and we never had to raise money again,” he adds.
In recent years, sectors like hospitality—and especially real estate—have seen a massive influx of capital inflows. One fund’s committed $93 billion to tech investments alone.
Despite all the VC dry powder looking for opportunity, Tim advises startups to stay as far away from funding for as long as they can.
“Think about it,” he says. “That big seven-figure, eight-figure check doesn’t go to you. It goes to the company, and you effectively lose control of your company. It’s business and the VCs can be ruthless.”
Instead, he recommends moving the focus to actually building the business.
“Focus on your core value. We filed a patent for our online group hotel booking technology 15 years ago, and we have been working everyday since to make that technology better for customers and suppliers,” he tells us.
What’s next on the cards?
While his company is busy garnering robust sales, Hentschel’s naturally bullish on the travel industry’s future.
The travel space is wedged into a transitional phase. Baby boomers who are spending their retirement traveling. Then we’ve got millennials prioritizing “experiences” over “stuff.”
“We have been through market bubbles and bursts over the history of our company and the highs and lows can be challenging if your core product cannot adapt quickly to market conditions. We are going to continue to expand globally and follow up with group travel trends,” Hentschel says.
“We want to compile as much data and information about every destination, and push it out to visitors in an easy to digest format.”
And what’s next, Tim? IPO?
“Not yet,” he says, laughing. “Our books are healthy, we’re growing. Maybe at some point in the future.”
This Entrepreneur’s Led An IPO, ICO, And Actually Did What The McMahons Couldn’t. (Penetrate China.) Here’s How He Did It
In the world of startups and entrepreneurships, you have a lot of talk, a lot of dreams, a lot of hype and — ultimately — a lot of disappointments.
But that’s life. It’s a small world. And it doesn’t take long to get found out if you’re not the real deal.
In this Q&A, however, we brought the heat.
David Chen is a Millennial entrepreneur with the experience of a Wall Street retiree.
Billion-dollar merger? Check.
Multiple startup exits? Check.
Successful ICO? Check that, too.
And perhaps, most impressively, Dave’s managed to do something even the McMahons of the WWE couldn’t — penetrate the Chinese market successfully.
In this Q&A, we ask him why entrepreneurs fail to raise money, even if they have a good idea (hint: ideas ain’t shit), the first thing you need to do, and, finally, what the best industries were.
Let’s get right to it. What’s the main thing stopping entrepreneurs from raising money?
Knowing their audience. You can’t assume that you know something and that it works at one region, but not the rest. It’s a relationship—and most of the times there aren’t relationships out there.
Secondly, you don’t approach someone in esports like you would in commercial. So my FaZe Clan pitch is different from my commloan pitch.
When is the right time to raise money — and what’s the first thing an entrepreneur needs to do?
There is never a right time, there’s only a right project. Know all your answers, make it simple. If a 10-year-old doesn’t understand it, redo the pitch.
You’re on a number of boards of startups. What’s one you’re bullish on at the moment?
I love them all. Sharebert was named Forbes’ top 23 in tech innovation. Commloan has done over a billion in funding—and I’m a customer.
FaZe Clan is the largest esports team with 300M subscribers and 10B views last year. And Micamp 20/20 does the best credit card processing.
What’s the best startup play — or sector — right now?
Sharebert is a great startup play because the tech is there. The management team is there. The need is there. It’s just there.
FaZe Clan is great because they have the global market, viewership—and they’re different.
What’s the next frontier for start up world.
I see China as the next market.
Why do you say that?
I say that because they have 44% of the world’s population. And if you don’t work with them it, they’ll just do it themselves.
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