Hotel prices tend to fluctuate, will you save money on hotel bookings if you book ahead or is it better to book last minute?
I wasn’t sure until I met the founder of Pruvo, Itai Marcipar at the Future of Travel Tech Summit in Miami, he developed a technology that allows you to save money on hotels even after you booked and paid for it. I chatted with him briefly and asked him if he would give us an interview so we can learn more about how Pruvo benefits travelers and also get a little behind the scenes of how he created this company, thankfully he agreed, so here is the story.
What exactly is Pruvo?
We figured out from the accommodation market that more than 40% of hotel reservations experience fluctuations between making the reservation and the check-in date, making it almost impossible to guarantee that you got the best deal.
Pruvo offers our customers the ability to make a reservation using any platform, whether it’s Booking.com, Expedia, or a travel agency.
Your reservation is then saved and Pruvo.com will begin searching your reservation prices for the same check-in date through a number of sources and we’ll then notify you if there is a better price, so you can make a new reservation for the lower price. So that you can cancel the old reservation. You can actually save a lot of money through Pruvo. On average, it’s about 12% of the total reservation price. We also have a free cancellation policy.
How did you come up with this idea?
About four years ago when I was booking my honeymoon trip, I wanted to upgrade one of the rooms that we booked, and I noticed that the same exact room that I booked previously was about 30% off the price that I paid.
So, I tried checking all the other reservations that I had for the same trip and I noticed the same thing happened with most of our bookings. It was at that moment that we started investigating the market and we figured out that we can save about 30% off the total reservation nowadays.
What made you think this can actually be something you can turn into a business?
Once we started investigating the accommodation market and noticed there was a lot of deception because there were only two companies that dominated the market. Priceline and Expedia owned more than 90% of the total accommodation market.
So we wanted to create fair competition between those booking sites and saw a huge void in the market for us to create something. We decided to proceed and created a unique business model that makes our service free to the customer. We try to find you a better rate and once we’ve managed to do so, we redirect you to make your reservation using an external booking site, like Expedia and others. This allows us to earn our commission from the booking site. By doing so, we don’t have to charge our customers anything for the service, so it’s totally free.
How much time is a customer able to cancel their existing hotel reservation without paying a cancelation fee?
It really depends. In some cases, it can be up until your check-in day, but on average it’s about 24 hours before arriving to the hotel. Of course, we track the cancelation policy as well, so in the event you send us a reservation that doesn’t have the free cancelation policy, we will let you know that it’s not possible at the moment.
How long ago did you start the company?
We launched Pruvo about two and a half years ago. We worked in the garage at first. It took us some time to develop everything and then we launched. We only raised a small amount of money and are a team of only 4 people that are doing such an amazing job on this without spending money on salaries, marketing budgets and development.
The thing is, when you are small and not spending much money, it’s much easier to grow when you do receive an investment of capital.
What kind of marketing have you done to acquire users?
Actually, it’s a mix of a lot of things. In the last year, we put a strong focus on getting as many media mentions as possible. In 2018 alone we received more than 250 media mentions, including CNN, Fox, MSN, NBC, and many more media outlets and blogs.
More than that, we try to focus on the viral part of our service. If you go to Pruvo’s Facebook page, which has 73,000 members, you will see we have very high engagement from our customers. Why? Because we’re creating something that is quite unique. After a customer benefits from Pruvo they tend to share about the service.
In addition to that, we are doing paid campaigns, but we focus on campaigns that drive more viral marketing. We are trying to acquire customers that will bring all their friends to Pruvo.
We also created a referral marketplace on our website, so as a customer you can invite your friends to use Pruvo, and by doing so, you earn Pruvo points. You can use those points to buy activities, such as tickets to a Barcelona game or any other activities for the adventure you are going on. We are adding as many activities as possible.
Do you handle the PR in-house or do you work with an agency?
Everything is in-house. We do everything from digital marketing to the PR and anything that you can imagine. even the tech development is 100% in-house.
Have you collaborated with social media influencers?
We like to work with organic influencers that actually use our services and enjoy it, who then spread the word because they really believe that there is a good value there. I don’t believe in just paying someone to say that they use the service without actually using it. I believe it needs to be reviewed, explored, and totally organic. However, we do work with some bloggers. Travel bloggers use our services, and then they write an article about us.
What’s the average discount Pruvo customers are saving?
The average discount is about 10% – 30% of the total reservation price and about $50 per reservation. I can tell you that one of the biggest discounts we have seen was about 82%, and it happened more than one time. Even though those major discounts happen in our market, we don’t advertise that, since most people will think it’s a gimmick.
How early in advance do most customers book their hotels?
On average, Pruvo customers send us their reservation around 2-7 days before check-in. It really doesn’t matter though, since you can send us the reservation two weeks before arriving to the hotel and we’ll manage to find you a better rate 10 minutes afterward. It really depends on the market. Of course, the sooner you make a reservation and send it to Pruvo, the greater your chances of finding a better deal. There is no reason not to send it to us if you’ve already planned to make a reservation for the hotel. Just book your reservation and then send it to Pruvo.
What percentage of people are actually getting discounts from the amount that are submitting their reservations?
Between 37% – 40%. We are going to increase that quite significantly in the next year.
What do you consider your biggest strength as an entrepreneur?
Being an Israeli, we don’t see barriers. We believe that everything is possible, so we move forward. Even if we find some obstacles on the way, we find a solution when we reach that point.
What’s your biggest challenge?
Our biggest challenge is finding our customers a better price 100% of the time. Think about it: if only 30% of our customers are actually saving money from our service, we still have 70% who are not fully benefiting and that’s a big problem from my point of view. Therefore, we are trying to create unique collaborations with other service providers, so that 70-80% of Pruvo customers can benefit and save money.
What do you love the most about what you do?
The challenge. We are playing in a huge market that doesn’t allow any competition. There are two giant companies that kill almost every company that tries to enter into the hotel booking market, so there is a huge barrier there. One of the biggest challenges is on the marketing side, because we try to sell without spending tons of money. If you compare any other competitor or any other booking site – Expedia, Trivago, Booking.com – they spend hundreds of millions of euros and dollars on marketing campaigns. It’s something that a startup company cannot afford, so what we’ve been doing is getting these customers without spending large amounts of money. I believe this is one of the biggest challenges that I see.
What book are you currently reading?
Actually, I’m reading more articles at the moment, mostly on fundraising and managing a company. I’m trying to learn as much as possible, reading as many articles as I can about all different sectors that are quite different from each other. As a CEO, I need to understand marketing, development and managing a business.
What’s a personal habit that contributes to your success?
For the last three years it’s been the piano. A week after I completed my degree in Technion, I decided I needed to do something new, so I started taking piano lessons. It actually helped me very much with memory and seeing things from a bigger perspective. It also clears your mind.
We work about 24/7, so it’s very important to have one hour a week that I’m taking my piano class. It’s great.
What’s the biggest lesson you learned from a mistake?
That you need to choose the right partners for the journey because it’s a long one. You need to know who your partner is in the company. I can tell you that we had to split apart from two of the partners that we had, but it was a great decision. What we learned is that you need to choose who you collaborate with, but more importantly, you need to know when it’s time to split.
Do you plan on expanding into flights or other sectors within the travel industry?
At the moment, flights are much more complex because of the cancellation policy. It’s very strict and you don’t have the free cancellation option like with hotels. However, in the future we are going to expand into car rentals and other sectors. For now, we want to be the best in the hotel space, and then expand into another market. Otherwise, it doesn’t work. You should be great at what you do. After that you can do anything you want.
How do we submit a booking reservation to Pruvo?
You can just forward your reservation to Pruvo.com and don’t even need to register or anything; just forward your reservation to our email address and that’s all.
You can also login to the Pruvo website with your Google account and whenever you complete a reservation on any booking platform. We will automatically import the reservation into Pruvo and start monitoring the process without having to do anything on your side.
Another way is to install our chrome extension, and we will automatically import your reservations as soon as you book.
That’s the most important part. I tell my friends it’s like insurance that you don’t have to pay. You have nothing to lose. Make a reservation and just send it. Worst case scenario: we won’t find you a better rate.
You can also use Pruvo for room upgrades, it will notify you if a better room becomes available for a lower price.