Hotel Engine Raises $65M at $1.3B Valuation - Corporate Travel Rebound

Corporate Travel's Revival Fuels Hotel Engine's $65 Million Funding

As the pandemic enters its third year, a noticeable resurgence in business travel is occurring worldwide. The increased occupancy rates observed on flights recently serve as a clear indication of this trend.

Further confirmation of travel’s recovery can be seen in hotel occupancy figures and the influx of capital into startups catering to both the travel sector and travelers themselves. Hotel Engine recently secured $65 million in a Series B funding round, achieving a valuation of $1.3 billion.

Significant Valuation Growth

Telescope Partners spearheaded the financing, with additional investment from Blackstone. This valuation represents a substantial increase – nearly nine times greater – compared to the $150 million valuation attained during its $16 million Series A round in 2019. Prior to this, the company operated through self-funding for four years.

Hotel Engine positions itself as a “Lodging Performance Network.” Essentially, the platform is a B2B, membership-based global booking service. It aims to provide corporations with access to more competitive lodging rates, alongside tools and data analytics to refine their travel management strategies. Founder and CEO Elia Wallen explains that the platform also benefits lodging providers by connecting them with a greater number of valuable business travelers.

From Side Project to Standalone Success

Wallen launched Hotel Engine in 2015 as a booking solution initially intended to support the lodging requirements of clients from his other venture, Travelers Haven. Travelers Haven specialized in short-term corporate housing.

For its first two years, Hotel Engine functioned largely as a secondary project for Wallen, receiving “limited investment or attention.” However, in 2018, he shifted focus, dedicating more resources to the company, which resulted in substantial growth within a single year.

“We have since experienced remarkable growth,” Wallen stated to TechCrunch. Importantly, Hotel Engine distinguishes itself from many startups by already being profitable.

Impressive Growth Metrics

Between the third quarter of 2020 and the third quarter of 2021, Hotel Engine saw a 201% increase in core bookings revenue. Its customer base expanded by 60% to exceed 40,000 companies.

Membership also grew significantly, adding 100,000 individuals to reach a total of over 550,000 members. The company’s workforce increased from 119 to 300 employees during the same period, with plans to add another 400 hires in 2022.

Wallen emphasizes that Hotel Engine’s unique approach lies in its use of technology to connect businesses and lodging providers on a global scale.

“Our platform enables customers to consolidate their lodging needs – from sourcing and negotiation to booking and reconciliation,” he explained. “Our technology delivers substantial cost savings and exceptional customer support without long-term contracts.”

Future Expansion Plans

The company is now focused on expanding its presence internationally.

Mickey Arabelovic, Managing Partner and Founder of Telescope, has joined Hotel Engine’s board of directors following the new funding round.

“Since our initial investment in late 2019, we have collaborated closely with Elia and the Hotel Engine team, consistently impressed by their dedication, resilience, and unwavering focus on business travel,” Arabelovic commented. “They offer an unparalleled, user-friendly solution for travelers and are only beginning to realize their potential.”