Stayful Wants to Be a Boutique Hotel’s Alternative to Daily Deals and Flash-Sales

Published on July 17, 2013
by Jason Del Rey

In a past life, Cheryl Rosner was the CEO of BuyWithMe, a daily deals site that faltered after her departure and was eventually acquired by Gilt City. One of the persistent knocks on daily deal companies from the early days is that they will do whatever they can to get the best deal for the consumer, whether it makes sense for the participating business or not.

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Now, with the beta launch of Stayful, Rosner is trying to give businesses — specifically boutique and indepedent hotels — an alternative — and more balanced — way to unload unsold inventory without ceding all power to deal-hunting consumers.

“With a lot of [daily deal sites], everything is focused on getting the consumer a better deal,” she said in an interview. “We’re focused on bringing the buyer and seller closer together so that there’s a fair transaction that creates a relationship that’s ongoing.”

Here’s how Stayful will work. Consumers browse hotel availability by market for the coming 30 days. Stayful displays the best price for that hotel found elsewhere on the Web, as well as a suggested “bid” for the Stayful visitor to make. The bid will often be lower than the best listed price, Rosner said. Stayful visitors can then make their own bid, and hotels have the opportunity to accept the bid or make a counter bid.

For hotels that Stayful has a partnership with — denoted as “instant” hotels — consumers will get feedback immediately on whether their bid was accepted or rejected. For the rest of the hotels — which comprise 80 to 90 percent of Stayful hotel listings right now — the company will manually take the bid to the hotel and ask them if they will accept it. Stayful asks its users for 24 hours to give feedback on the bid in those instances.

The hotels with which Stayful is directly partnering provide the startup with a percentage range for discounts that they are willing to accept from bidders. This range is based on factors such as the day of the week of the proposed booking and the length of stay.

When a hotel accepts a bid, Stayful takes 10 percent of the price off the top and sends along the remaining 90 percent to the hotel. Hotel stays booked through the bidding process are non-refundable.

“It’s hard to find these little gems,” Rosner said of the category, which accounts for about a third of all hotel rooms in the U.S. “Our focus is on aggregating this category of hotel rooms and bring them together in a way that’s very searchable.”

The site is launching with two markets — New York City and San Francisco — and will stay in private beta for two more months. When it opens up to the public, it’ll be in seven cities, and 12 by year’s end.

Search is still a huge driver of hotel bookings, so Stayful will have its work cut out to outmaneuver the Hotels.coms and Expedias of the world for top billing on Google search pages.

Stayful recently received $2.4 million in funding in a round led by Canaan Partners.

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