Hotel Marketing Tech Consolidation Being Orchestrated by Austin Private Equity Firm – Skift
[ad_1]
Two travel technology companies that provide hoteliers and vacation rental managers with tools for engaging with customers, promoting direct bookings, and collecting and analyzing guest feedback have joined Serent Capital, a $ 2 billion private equity firm based in Austin. Dollars invested capital, orchestrated deal partnered.
Revinate, a San Francisco-based maker of guest data management and business intelligence software, announced Tuesday that it had acquired Navis, which provides direct booking services. The combined company under the Revinate brand will serve more than 300,000 hotels.
“The merger gives hotels a technology ecosystem in which they can engage with customers, convert customers through their direct booking channels, and merge guest profiles across data sources,” said Abhishek Anjanappa, Revinate’s chief marketing officer.
The companies have not disclosed any terms and conditions or transaction values. VRMintel first reported on the merger. Kyle Buehner, CEO of Navis, will step down after 17 years at the helm. Most of the Navis staff will stay, a Revinate spokesman said.
Serent Capital conducted a Series D round in Revinate in May 2020, during the depths of the pandemic. The round was roughly $ 8 million and $ 10 million, according to a funding proposal.
Separately, Serent provided the capital to acquire Navis and merge with Revinate.
Serent did not take over a majority stake in Revinate. The startup had raised around $ 45 million in equity prior to the pandemic. During the early stages of the pandemic, Revinate borrowed $ 4 million from Horizon Tech Finance in exchange for 615,475 preferred stock warrants. The startup also received a $ 1.8 million paycheck loan from the federal government, according to ProPublica.
“We have taken steps to consolidate our position,” said Anjanappa. “But we definitely did a lot better and are better than we thought we would need.”
Serents interested in software for hoteliers
In a separate step a year ago, Serent invested in SHR (Scepter Hospitality Resources), which provides hotels with its central reservation system called Windsurfer, a guest management system called Maverick, and a revenue management system called Wave. The company is a co-investor with Rod Jimenez, co-founder and CEO of SHR.
Are there synergies between the three travel tech companies and is a merger likely?
“No, they are two separate shareholder bases,” said Lance Fenton, a partner at Serent who leads technology transactions in the hospitality industry. “We are not taking the path to bring these assets together.”
“The Revinate deal is not a hospitality rollup,” said Fenton. “This is a compelling opportunity to continue the work of Revinate and Navis. Our strategy is to select the best players in their class and help them grow, not just aggregate assets. Without this deal, Navis would spend on building its own marketing tool. It makes more sense that they invest in the revenue platform under the Revinate umbrella. “
Revinate repeated the comments.
“No, there are no plans,” said Anjanappa. “From our point of view, we want to maximize Revinate’s potential. We’d love to play wherever it suits us. But nothing will necessarily fit into the Revinate thesis and development. “
One of Serent’s co-founders is Kevin Frick, who while at McKinsey & Company worked on the first private equity acquisition of TravelClick, a hospitality technology roll-up that was eventually acquired by Amadeus for $ 1.5 billion became.
So the Serent team has a long history of pursuing investments in hospitality technologies. In 2012, the company made its first investment in the industry by acquiring a stake in Knowland, a Washington, DC-based company that provides technology, data, and analytics for the hospitality industry, and most importantly, its cloud-based sales and catering is known. Solution and event intelligence tools for selling meeting and conference rooms. Serent has since helped Knowland grow through three mergers and acquisitions.
The company began taking a closer look at Revinate in late 2018.
“Our survey work showed that the leading CRM [customer relationship management software] in the hospitality market, Revinate is based on customer data, ”said Fenton.
Serent started the first discussions with Navis back in 2010. As Navis moved from renting vacation homes to maintaining hotel space and upgrading its technology, the company became more attractive, Fenton said.
Revinate bets on the unification of hotel data about guests
Hotels have primarily used Revinate for their cloud-based email marketing and customer relationship management software.
“Revinate offers customer-centric marketing products and helps hospitality companies generate business intelligence from their data,” said Anjanappa. “Navis has a reservation suite that converts customers efficiently and with a high conversion rate on direct hotel channels.”
It could get interesting if it can build a “data lake” that enables hoteliers to create a “golden data set” with a single view for each guest by integrating data from multiple sources. That year the company announced a product called Advanced Profile Synthesis that tries to do just that.
However, accurate data integration is a tough nut to crack.
“The big hotel groups have been trying for years – decades? – Get CRM / CDP, RMS and CRS to work together to create personalized offers on an individual basis, ”said George Roukas, partner at Hudson Crossing consultancy. “But for one reason or another they don’t seem to be getting it to work.”
“If Revinate and Navis start pooling resources to try it out, great!” Said Roukas. “I suspect Serent has more plans on the horizon to bring in the remaining pieces of the puzzle.”
Serent believes the stars have finally aligned themselves for customer relationship management software and customer data platforms to stand out.
“Yes, people have been trying to solve this problem for a long time, and it has been a big problem, especially in the hospitality industry,” said Fenton. “But a lot has happened in recent years.”
The wider chance could be substantial as the pandemic is slowly being tamed.
“In Europe, and particularly in Greece, I would say that a lot of hoteliers talk about using digital marketing, but few actually do it,” said Minas Liapakis, founder of Eyewide, a digital hotel marketing agency based in Crete, Greece. “That seems to be changing. Obviously, due to the turbulence caused by the pandemic, many hotels are investing in internal teams or hiring external partners with key competencies. “
Revinate will spend the next few quarters gradually integrating its systems with Navis, and the company expects many cross-selling opportunities between the two companies’ customer lists.
“Our goal is to accompany the traveler throughout the journey, from research to booking to the stay itself and after booking, so that a hotel can continue to contact a guest and address him again to help him to win back a future, ”said Anjanappa.
“We also want to shift the balance of power from online travel agencies back to hoteliers so that hoteliers can make better use of their own data and make bookings on their more cost-effective direct channels,” he said.
First party dates are a hot topic
The background to Revinate’s work is a bigger trend as Google and other companies work with Apple to restrict advertisers and other third parties’ access to customer data collected through their products.
“In a world where you can no longer use third-party data, as a hotelier all you have to do is use your own data to figure out your customer journey and profile,” said Fenton.
Revinate, hoteliers, and other travel companies are increasingly having to rely on first-party data, or information that consumers have voluntarily shared with companies, for good digital marketing.
“We’re moving towards a first-party data world,” said Roukas. “We’d better think about how we can use it.”
Do hotels need this software?
In most cases, is digital hotel marketing necessary that targets individual guests?
Tech vendors often use the example of getting travel agency online bookers to book directly or getting former guests to book again and directly. But many individual properties have many guests who only come to visit once over the course of, say, a decade. So is it worth re-marketing these guests?
Anjanappa argued that it is worthwhile for hoteliers to understand who their guests are, because even if individual guests do not become returning visitors, they are likely to represent the interests and preferences of similar visitors.
“Imagine a hotel in a particular metropolitan area,” said Anjanappa. “Why do people come to the hotel? If the hotel company analyzes the data of its guests, it can make its marketing more efficient in order to attract new guests with a similar profile. ”
“You can identify attitudes, behaviors and interests,” he said. “You can then use this information to run more effective marketing campaigns to target a larger audience of new guests.”
Private equity stake in Hotel Tech
Further private equity investments in the travel sector are expected.
Earlier this year, Accel-KKR, a Silicon Valley-based private equity firm, supported Cendyn’s merger with arch-rival NextGuest. Cendyn’s offerings overlap with many of Revinate and SHR.
While several travel startups are currently experiencing pricing difficulties, hospitality tech companies may need to return to post-pandemic hotel revenue to achieve stable growth rates and tremendous cash generation that stimulates the interest of high-profile software -Buyout specialists like Thoma. Bravo and Vista Equity Partners will awaken.
When they come to shop, they have many options.
Competition space
On the fronts where Revinate and Navis compete as a combined company, they face varying degrees of competition from other technology companies that focus on hospitality marketing, guest engagement and direct booking conversion, such as Cendyn, TrustYou, GuestRevu, Avvio, RateGain’s BCV Social , SynXis Enterprise Platform from Saber, SiteMinder and TravelClick from Amadeus.
In addition, other software vendors are competing with more general offerings for overlapping aspects of the hotel software business, such as: B. Zendesk, NetSuite, HubSpot, Medallia, Silverpop from IBM, Guestware and Salesforce.
“Generic providers will not deliver the specialized, bespoke solutions hoteliers need for their distinctive products and services,” said Anjanappa.
Show full article
Photo credit: L’Auberge Del Mar of Del Mar, California is part of the Noble House Hotels group that uses Revinate’s technology. Revinate, a San Francisco-based manufacturer of a guest platform for the hospitality industry, said Tuesday it had acquired Navis, a travel technology company. Noble House Hotels
[ad_2]
