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BW Businessworld

Log In To Stay, On A Budget

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The online travel industry has seen steady growth in the past decade but few online travel agencies (OTA) have been keen to list budget hotels. This is because of the costs involved in bringing budget hotels on board, explains Prashant Chauhan, COO, MyGuestHouse (MGH) Accommodations. Since travel firms run on a commission basis, budget hotels were not worth the effort and, consequently, the segment was neglected. But Jitender Arora, founder and CEO of MyGuestHouse, felt this was an opportunity to be tapped.

MGH, born in 2010, provides support to over 5,000 budget hotels through a free and easy-to-use software that allows managers to control inventory, pricing, distribution, manage accounts, create bills, maintain records, and also reach out to other OTAs such as MakeMyTrip.com, Agoda.com, Desiya.com and, of course, MyGuestHouse.com. Using the software, travel agents can create a website with an online payment gateway, and access live inventory of other hotels available with MGH. The company has recently launched a mobile application.

MGH deals with over 10,000 online and offline travel agents and corporate customers, who can access inventory from over 320 cities. The OTAs pay MGH a commission on every booking. Besides the B2B platform, it also has a B2C platform.
 
WINNER’S RANK: 3
CATEGORY: B
MYGUESTHOUSE ACCOMMODATION
Sector: Travel/Hospitality
Founder: Jitender Arora
Year Of Inception: 2010
Base: Noida
Capital Invested: Rs 6 crore (approx)
Investors: MakeMyTrip
Employees: 120
Key Customers: MakeMyTrip.com, Desiya.com, Agoda.com
Key Competitors: Intech Hotels, Magic Rooms and Travel Guru
Arora, a B.Tech graduate, was running a software firm in 2009 when he received an order from a UK client to build a property management system for budget accommodation. Arora realised the value of such a software. When the client went bankrupt, Arora acquired it. He started by reaching out to travel agents, and soon realised that the business was in the B2B segment. MGHworld.net, one segment of the company, focuses on hotel managers and travel agents. 

“Our prime focus is on Tier-2 and -3 cities, since these are largely not covered by OTAs,” says Chauhan. 

A Singapore-based angel investor pumped in the first round of funding into MGH. MakeMyTrip acquired a share in 2011 and invested about Rs 5.5 crore over two years. In view of this, MakeMyTrip founder and CEO Deep Kalra abstained from voting on MyguestHouse.

“Our unique proposition is that we are an integrated system. While there may be competitors in one or the other segment, we have not identified any competitors with an integrated product,” says Arora.

“Initially, we faced a lot of trouble,” says chief business officer Sadiya Naseem. “When someone came to a hotel that had already booked rooms through us and offered a higher price, the hotel would give the rooms. But hoteliers realised, in the long run, they need our software to survive.”

The other challenge is to keep updating room inventory. Every hotel has to update its inventory at least once every 24 hours. If a hotel fails to do so, two reminders are sent and, finally, it is blocked. But once it updates its inventory, it is brought back immediately. Says Chauhan, “No other player in this segment has live inventory.”
 
JURYSPEAK
“They have tried to solve an interesting and real problem. They have made commendable progress”
But many hotels were unable to update inventory because of poor connectivity. So, now MGH allows hotels to do this via SMS.

Does MGH plan to go global? “Definitely,” says Arora. “The interest is there, and the software is there. It’s only a matter of time now.”

(This story was published in BW | Businessworld Issue Dated 22-04-2013)