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Sharing hotel rooms- Please provide your opinion


roughlyright
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I am a regular visitor to Omaha for the annual meeting on the first Saturday of May. So many times, I booked the La Quinta inn, sometimes for $200 per night. I know most value investors, including myself are cheap  :)  I was thinking that most hotel rooms have 2 queen beds. It should be easy for me to share my hotel room because we both will have separate beds. But that kept me thinking more and I thought of building a website, which facilitates people’s sharing of their hotel rooms. I am in the process of building the code for those site, as I am a programmer.

 

The way site works is as follows:  Somebody who already has a room is called a host and the one looking for a shared room is called the guest. A person can come to the site, search for all rooms. It shows 2 types of rooms.

1.The site lists all the shared rooms that are listed in Omaha with the hotel details  with pictures and on a map etc with the prices. These prices will be half price of the regular hotel rooms at the same hotel.

2. It also shows you rooms that are exclusive to you ( I pull this from expedia and booking.com). When you try to book the room,  it gives you two choices. A. Either you know who you want to share with and their email address or b. you don’t know who you want to share with.

 

In case of A,  it will take half payment from you and ask your roomie’s email address so that the site, sends an email to them.  Once it collects the payment from you and your roomie, your room is booked. It sends confirmation email to both you and your friend.

 

In case of B, you have to pay the full payment, and the site sends a confirmation to your email. It posts room as available for sharing. You can then promote it via whatsapp or facebook and ask your friends if they want to share the room and save. You room is shown along with other listings.

As time goes on your hotel room and your first name and Last initial is shown to the new users. If a new user wants to book your room, the site sends a text message to you. You either have to approve or decline that person via text message or by email. If you approve, we collect payment from the guest and send confirmation emails to both you, guest and the hotel. It informs the hotel via fax that the new guest is added to the reservation.

 

Once the guest completes the reservation,  site sends a 6 digit code. When he checks in to the hotel and meets you , he can give you this 6 digit code. You go to the site, enter the 6 digit code against his reservation and the system transfers the money collected from the guest to your account. The money remains in the account, till you transfer it via check or paypal to your personal account. Site gives you a option to review your guest and vice versa.

 

I am seeking your opinion, especially the critical, about why this will not work. If this has to work, I like to know from you, how should the user experience should be so that you would use such a free service. Feel free to ask me any questions, please.

 

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Sounds kind of like AirBnB for hotel rooms. I don't know how the hotels would feel about it or what their policy, if any, is on re-selling a portion of your room. Sharing a hotel room with someone you just met might be a little scary the first couple times. Perhaps if you go through with building the website enable users to add a bio about themselves and receive feedback from other users. I can see it now -

 

Jack Smith (3/5 stars) - Cleanly, smells ok, snores loudly.

 

You might consider approaching hotel's with your program and allowing users to book directly through them at the half-room rate knowing they will be paired with another guest. Who knows you could throw in a matching algorithm based on their bio and have a networking/dating app.

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I think it's a cool idea and the target market is probably not people on CoBF.  I've stayed in an AirBnB where the host was there.  It was weird.  My friend and I stayed there because it was the only sub $300 option in Indianapolis for the Final Four.  Otherwise, I can't think of a time when I'd stay with a random person to save $30 (maybe the Berkshire meeting if I didn't have friends in town that we stay with).

 

That said, the typical hostel user/traveler might use this.  And, i can't see how the hotels can stop you in real life.  If two strangers want to share a hotel room, that seems permissible to me.  The 'host' is on the hook for damage/noise fees because (s)he booked the room.

 

My guess is that the market for this is much, much smaller than AirBnb.  For example, you can stay in a private room for $89 in NYC.  That's pretty cheap.  I'd rather do that than split a $150 hotel room with somebody for $75. 

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It is an interesting idea, but my opinion is that it wouldn't work. I don't think people mind loosening their wallets when on vacation. The idea of splitting a room with a stranger to just save a few hundred when you're supposed to be out indulging on a vacation isn't too appealing. Furthermore, most people travel in groups most of the time.

 

Of course, then there are cheap value investors who flock to Omaha without any friends. Though that's a small target market. I don't know anything about programming or the amount of time/money investment you'd need to put into this. So maybe if it's relatively little effort and money, it may still be worth it. Are there other Omaha like events that you know of: people traveling alone with short supply of hotel space? Maybe if you find a handful of those then it would work.

 

Take it with a grain of salt, just my humble opinion. Best of luck!

 

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I don't know if I personally would use a service like this, I tend to like having my own room. That said, I do think there is a market for it. Especially for people travelling when hotel space is short due to something like a major sporting event, concert, Mardi Gras etc. If you're in town that weekend and have a hotel room to yourself the price of the other half of your room will go up as it gets closer to the event, people booking at the last minute and realizing there is nothing left available. Maybe your half would sell for more than you originally paid to book the entire room to someone who really needed it.

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Like people above said, there is some market for this mostly around events and less affluent people attending such events. I know that students post about sharing hotel rooms when they go to scientific/research conferences. Participants usually prefer to stay in the conference hotel for networking and convenience, but rooms there are usually expensive. So sharing works. OTOH, conferences usually get hotel discount, so it's not clear how 3rd party site could facilitate sharing and still get the conference discount.

 

Anyway, good luck. :)

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BTShine,

 

  Thanks for your feedback. I was thinking that the potential customers are not actually, people who travel once every year to Omaha. I was thinking of those millions of consultants, who pass their hotel bills to the client, and they don't get anything out of it. If they choose to share their expensive rooms, they get 50% of the money for themselves.

 

It just my thinking, obviously. But reality could turn out to be different.

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Jurgis,

 

Thank you for your feedback  :) You bring up a good point. My idea, does not prevent people from getting the conference discount. So, people pay to the Hotel, any travel website (expedia, travelocity etc) for a exclusive access to the room. This is part everyone does today. It will continue as normal. Once they book it, they come to site, to list their specific room for sharing.

 

For putting up with the discomfort of sharing the room with someone, they get to keep 50% of what they paid for the room or in some cases can even be 100% of what they paid. What I mean is, if they had a corporate discount of some type which gives them the room for $75/per night for a very expensive Mariott. They can turn around and list it for $75 on the site, and share with someone and get all of their money back. For the guest, who is sharing, it is great because in the absence of a corporate discount he had to pay $150 for the same room.  It is good value proposition for both the host and guest. Is it not?

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While many people going to the Berkshire meeting are value investors (and cheap I guess? Not convinced these things are correlated), I'm sure the average income of attendees is significantly above the national average so $100-200 is relatively meaningless. Many people (like myself) think the cost of a personal hotel room is well worth the privacy/alone time/etc.

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Roughlyright,

 

Good points.

 

The corporate angle is interesting.  It made me think of a scenario my Dad encountered years ago with his business.  He had many employees that travelled often working for him.  In one case there was a guy and girl that both travelled a lot on projects together.  The company paid for separate rooms since they weren't dating or married.  Years later, after one of them left the company everyone learned that they had been dating without telling anyone.  So the joke was that the company spenttens of thousands of dollars over the years on empty hotel rooms.  If they had this website, they could've rented out a full unoccupied hotel room to a 3rd party and kept the cash.  My Dad's company still would've paid for the unused rooms, but these employees could've made some money either way.

 

I'm sure this situation exists in the management consulting world, among others, and people would be interested in subletting out empty hotel rooms.

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BTShine,

 

  Thanks for your feedback. I was thinking that the potential customers are not actually, people who travel once every year to Omaha. I was thinking of those millions of consultants, who pass their hotel bills to the client, and they don't get anything out of it. If they choose to share their expensive rooms, they get 50% of the money for themselves.

 

It just my thinking, obviously. But reality could turn out to be different.

 

In the case where you’re passing on the cost to a client, reselling part of it as you’re describing here sounds like fraud.

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I'd personally want to pay more to have my own room, but I think think there may be a market for this. Sites like Couchsurfing.com seem to do well, so there are a lot of people out there that don't mind staying with people they don't know. This will work well for other events like concerts, where hotels fill up quickly.

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BTShine,

 

  Thanks for your feedback. I was thinking that the potential customers are not actually, people who travel once every year to Omaha. I was thinking of those millions of consultants, who pass their hotel bills to the client, and they don't get anything out of it. If they choose to share their expensive rooms, they get 50% of the money for themselves.

 

It just my thinking, obviously. But reality could turn out to be different.

 

In the case where you’re passing on the cost to a client, reselling part of it as you’re describing here sounds like fraud.

Yeah, I'm not advocating this and it could be fraudulent if your employer or client asked you not to resell any unused space.  I'm  not sure if it's moral, fair, etc but I do think the opportunity exists on a small scale for this business.  Regarding fraud  Uber didn't obey the laws and many could say they're they're providing illegal taxis that are ruining the lives of taxi drivers that have taken the exams, passed the tests, etc.  but the reality is there's a business there and it's profitable so we are here to discuss at CoBF.  It's morally more palatable than marketing cigarettes to young people.  I'm just here to discuss ideas.

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You can point to the occasional example like Uber where they successfully operate in a legal grey area. But I think 99% of the time not following the letter of the law is a bad business decision. And 99.99% of the time bad ethical decisions are bad business decisions.

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You can point to the occasional example like Uber where they successfully operate in a legal grey area. But I think 99% of the time not following the letter of the law is a bad business decision. And 99.99% of the time bad ethical decisions are bad business decisions.

 

Yeah, I'm not advocating this and it could be fraudulent if your employer or client asked you not to resell any unused space.  I'm  not sure if it's moral, fair, etc but I do think the opportunity exists on a small scale for this business.  Regarding fraud  Uber didn't obey the laws and many could say they're they're providing illegal taxis that are ruining the lives of taxi drivers that have taken the exams, passed the tests, etc.  but the reality is there's a business there and it's profitable so we are here to discuss at CoBF.  It's morally more palatable than marketing cigarettes to young people.  I'm just here to discuss ideas.

 

Though I don't consider Uber as unethical. Not sure if it's illegal or not. Subletting a room that belongs to your employer on the other hand, I feel is unethical.

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