HotelTonight, a mobile booking application that helps travelers reserve hotel rooms at the last moment, is coming to Russia, the US company announced via Twitter earlier this month.
“We invest in markets where people are ready for spontaneous travel and adapt well to new technologies,” said HotelTonight CEO Jared Simon. “Russia was ideal. Russians don’t plan one year ahead like in many other countries.”
The US company was also attracted by the fast-growing smartphone penetration in Russia, which reached 66% in 2014, up from 47% in 2013, according to Deloitte estimates cited by RBC.
HotelTonight’s Russian version
HotelTonight claims to have already signed contracts with 40 hotels in Moscow and St. Petersburg, Russian business publication RBC reported.
For the May holidays and the summer vacation period the company intends to include hotels from classic Russian destinations such as Sochi, Kazan, and the medieval Golden Ring towns northeast of Moscow, as well as Kaliningrad. “We are counting on domestic tourism, which is now experiencing a boom,” said Alexei Lankin, HotelTonight’s regional director in Russia.
The investments in the localization of the application, including hotel descriptions, photographs, advertising, PR, etc. amount to roughly $1 million, according to Lankin.
The service earns money from the fixed 15% commission made on each booking.
Among HotelTonight’s main competitors are the last-minute booking services are also offered by OneTwoTrip, Anywayanyday and Ostrovok, three major Russian online travel startups. HotelTonight also competes with the Booking Now mobile application, which Booking.com launched in Russia in March 2015.
HotelTonight was launched in 2010 in San Francisco. Currently, the service operates in 500 cities in 28 countries around the world. Its database contains 15,000 hotels, while the number of user downloads throughout the world is over 12 million. In Russia, the application had been downloaded almost 70,000 times before the launch of the Russian version, according to Simon.
According to Rostourism, domestic tourism grew by 40% in 2014 and is expected to rise by up to 50% this year. Data from Businesstat shows that the volume of the Russian hotel services market grew by 7.6% in 2014 to 174.7 billion rubles (approximately $4.5 billion at the average exchange rate of last year), with average hotel occupancy at 50-60% in the regions and 70% in Moscow.
