Supply Chain - Heather Leisman, HotelTonight

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Heather Leisman is a woman on a mission. Newly installed in her London home, she is tasked with replicating HotelTonight's US success in Europe.

HotelTonight is a mobile phone app that essentially "does what it says on the tin" - users can book a hotel room through their phone at significantly discounted rates (up to 70 per cent) for the day the deal is on offer. Users can book with just a few taps on their screen, they transact with Hotel Tonight directly, who then pays the hotel within seconds, minus commission.

When we meet in London's Hoxton Hotel, Leisman describes HotelTonight as "essentially a marketplace", and when asked about her goals for the company the first phrase she utters is "global domination", and although delivered with a smile, I don't think she's joking.

Leisman has been in the travel industry for about 17 years. She started her career in economic consulting but "quickly learned that it wasn't for me!" Her first job in travel was for a tour operator in Boston, Massachusetts: "I did it because it sounded cool, they had great travel benefits and I love to travel. From there I was very much bitten by the travel bug and I've been in the industry ever since," she says.

"In some ways it has been an unconventional career because I've worked in every single sector - b2b, retail, wholesale, white labelling, online marketing, merchandising and so on. It's been a great background because I learnt about 'the plumbing' - the connectivity, both on the airline side and the hotel side. It was the most valuable experience, learning the nuts and bolts of how the industry works."

Her career has included stints at,  where she "learned a lot about site optimisation and how to make an e-commerce business successful" and She says: "Jetsetter was a pioneer in the flash sale business focusing on luxury and boutique hotels, so it was combining a lot of the things I am passionate about - I love boutique hotels, I love luxury products, I love that entire segment of the market.  It was a start-up environment, I think we were a team of eight when I started, within a larger organisation that was very well-funded. The job had a lot of very appealing aspects to it. I joined in September of 2009, moved to New York, and grew it into a business of 80 people. There was a lot of interviewing and recruiting. It was a fantastic experience for me because I was doing a lot of the day to day organisation of the business, everything from partnership development and contract negotiation to customer service."

She left Jetsetter in January for personal reasons - "the business had started to do a lot of different things that were away from its core of luxury flash sales for boutique hotels, so I took about five months off. I went to live in France for a while and did a lot of travelling. I reconnected with why I love this industry," says Leisman.

"Spending some time in France and connecting with a new culture really got me re-energised and got me thinking about what I wanted to do next. Hotel Tonight has been  a business that I have watched since the beginning - Jared Simon (one of the co-founders) and I worked together at Orbitz many years ago on the same team. We always stayed in touch, and when they were starting the business, I helped them in an unofficial capacity, making introductions. I found  myself pitching the business a lot, alongside Jetsetters. It's what I call a 'disruptive' business, which I like, and I also have tremendous respect for Sam Shank, the other co-founder. He's a visionary and inspirational person but he's also the most down to earth guy you will ever meet."

"We'd talked about working together, but when they were solely in the US, my skills were duplicated by Sam and Jared. But when they closed their C-round of funding, which was US$23 million, with the intent to expand globally, I came on board."

Leisman is confident about the opportunities for Hotel Tonight in Europe, because of both the nature of the company and the huge potential of the region.

"What makes us different from everybody else in this space is that we are unbelievably, maniacally laser-focused on what we do. We do one thing, we sell your hotel rooms - tonight. With a business like ours there are two ways you can scale it - one is diversification of product lines, and the other is to stick with what you know, stick with the focus, stick with the vision, stick with the dream, and build out in to other places where you think it will work."

"I feel very bullish about Europe - this business model is great in the US, but it's going to be 10 times bigger in Europe, it just makes so much sense here. The people here are much more spontaneous, they are much more willing to go on a two-week holiday and only have a hotel room booked for the first two nights. Thy don't want to be tied down and they want to make discoveries. A model like Hotel Tonight is absolutely perfect for this audience, especially when you consider the proximity of places - you can literally pick up your phone in London at noon and see that there is a deal in Amsterdam, hop on a train and get there that night. It makes it really easy to take advantage of our offers."

Leisman says the key to the success of HotelTonight is building strong relationships with their partner hotels and keeping the lines of communication open. "We develop long-term partnerships - our country managers are on the phone constantly with our partners, asking them what they need from us and helping them price their product effectively. We have a 24/7 multilingual customer support team - you can call them, or have an online chat - they'll take care of you. And we are incentivised by commission - people mistakenly think that we are trying to get the lowest price, but we actually want our hotels to get the best prices they can."

Back to the world domination theme, Leisman is not looking for growth just for the sake of it: "We have very aggressive growth plans in place, but with a strong sense of discipline. We are lucky in that most hotels are pretty open minded, they are looking for ways to attract new guests, they want to try new things and they will take a chance on you if it is right for their business. They will be patient with you for a while, but they won't continue with you if you are not producing room nights. We have to make sure that when we go in to a market we understand who the customer is and how to target them. We do have a lot of competition but it doesn't keep me up at night worrying about them - what keeps me up at night is satisfying our customers."

The user profile of HotelTonight customers is evolving almost as quickly as the business is growing. Leisman says: "Our typical user profile used to be the typical early tech adopters, 25 to 35 years old, people with Smart phones who were at the forefront of technology and innovation, and a predominantly urban audience. Today that has changed - these people have told their friends and family, their parents and grandparents, so the average age is getting broader and the audience is becoming more diverse. Half of our users are business travellers, the others are impulsive purchasers who will wake up one day and say 'let's go and stay in a fancy hotel'. Both type of travellers tend to spend more 'on property' than average guests - they are highly attractive customers."

"We are still a long way away from the scenario where people will just show up in a city and book something on the app - they are not the people who are using Hotel Tonight. There are times when your travel plans fail you, when your flight is cancelled, when your meeting goes on late and you miss your last train, so you need a place to stay. We can take the stress of that situation away," she adds. "Nearly every traveller needs our model at some point, but not every time they travel."

HotelTonight groups its hotel partners in five categories: : basic, solid, hip, luxe and charming. Leisman says: "The only common denominator in our hotel clients is that they have to be the best in their category They have to have phenomenal service - that doesn't mean they have to be a luxury hotel or a cool, hip hotel, but they have to deliver what they say they will. They have to be consistent and high quality. We try to find hotels that we think will resonate with our customers. Some of it is about discovery - finding boutique hotels for example that can offer better value than big boxes. We also work with all the big guys - Marriott, IHG, Starwood etc, as well as independent properties."

"We are in 60 locations in the US and are just launching in cities like Detroit, Cleveland, Cincinnati and Nashville; and we have five UK markets: London (divided into west and central & east), Glasgow, Edinburgh, Liverpool and Birmingham. We will add some of the coastal towns, Brighton in particular, in time for the summer. We have close to 100 hotels in Europe, including Amsterdam and Dublin - things change quickly! In a market like Glasgow, for example, we will look for around 12 partner hotels - we only promote three a day."

Looking at the hotel sector in general, Leisman says: "It's been a hard couple of years. The cost of acquiring customers has continued to go up, whether you are going through an OTA or direct. There is going to be big growth in OTAs, people love to hate them, but the fact of the matter is they get tremendous reach, they are a very effective marketing tool."

She is impressed with the European boutique hotel sector and thinks that the US market will learn from it: "The boutique market is much more advanced in Europe - Europeans are much more comfortable with boutique hotels, and there is a lot more product. The US is just so dominated by chains and I think there will be a shift away from that as consumers realise there is a lot of choice out there in the form of boutique properties. In the boutique sector we are seeing a lot more focus on design and architecture, there is an increasing use of branding."

Leisman is tactfully deflective when asked about her own favourite hotels: "What I look for when I go in to a hotel is, first and foremost, great staff. No hotel is perfect physically - things go wrong - but having a great service-minded team can overcome that."


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