OTA Insight Secures $80M Funding for Hospitality Intelligence
Recovery in Travel & Tourism Fuels OTA Insight's Funding
The travel and tourism sectors, significantly impacted by the COVID-19 pandemic, are demonstrating initial indications of a rebound. OTA Insight, a provider of business intelligence solutions for the hotel industry, is capitalizing on this upturn with a new funding announcement.
Securing $80 Million in Series B Funding
The company has successfully secured $80 million in a Series B funding round, spearheaded by Spectrum Equity. Existing investors, including Eight Roads, F-Prime Capital, and Highgate Technology Ventures, also participated in this investment.
While OTA Insight has not disclosed the specific valuation resulting from this round, it currently serves approximately 55,000 hotel properties and has maintained profitability even throughout the challenges of the pandemic. Prior to this, the company, established in 2015, had raised a total of $20 million.
Expansion into an Untapped Market
CEO Sean Fitzpatrick stated that the newly acquired funds will be strategically deployed to expand the company’s reach within a largely underserved market.
“A distinguishing characteristic of the hotel and hospitality sector is that technology vendors often concentrate their efforts on larger hotel chains, believing they represent the greatest opportunity,” Fitzpatrick explained. “However, considering the total addressable market, there are over one million hotel properties, compared to roughly 70,000 chain properties. We maintain a strong presence across a diverse range of businesses, from independently owned establishments to global chains.”
The Rise of Vertical-Specific Analytics Tools
As big data analytics continues to evolve and industries become increasingly reliant on digital solutions, a growing number of startups are emerging with specialized tools tailored to specific sectors, company sizes, and applications. For example, Pigment recently raised $73 million to provide enhanced forecasting capabilities for finance teams traditionally using spreadsheets.
Addressing the Needs of a Changing Industry
OTA Insight’s opportunity lies in serving hoteliers who are facing new business pressures and are increasingly willing to invest in digital tools to navigate these challenges effectively.
Fitzpatrick noted, “Despite current headlines regarding travel, we are optimistic about a strong rebound in the travel industry over the next three to five years, driven by people’s desire for experiences. We are witnessing significant interest in investment within hospitality technology, and hotels are actively re-evaluating their technology infrastructure to identify opportunities for improvement. The industry has undergone substantial changes, creating a considerable opportunity for growth.”
Bridging the Gap Between Hotels and Guests
The disparity between how hotels interact with guests and their understanding of guest intentions remains substantial. Hotels provide accommodation and services, but often lack insight into guest preferences or online search behavior, impacting booking outcomes.
This realization was a key factor in the founding of the company. Founders Gino Engels and his colleagues experienced firsthand the difficulty of finding affordable hotel rooms in London during the 2012 Olympics, despite observing available rooms and price reductions upon arrival. This highlighted the need for improved management practices.
Providing Comprehensive Business Intelligence
OTA Insight currently offers a suite of business analytics and BI tools – including Market Insight, Rate Insight, Revenue Insight, and Parity Insight – to assist hotel operators in optimizing pricing and room availability. These tools support both direct sales efforts and management of sales through third-party channels.
Currently, the company does not resell its technology through platforms like Booking.com or Airbnb, although future expansion through these channels remains a possibility as they seek to enhance their services for hotel customers.
Investing in Technology and Expansion
A portion of the Series B funding will be allocated to further investment in OTA Insight’s technology platform.
Gino Engels, co-founder and CCO of OTA Insight, expressed excitement about customer response to recent product innovations. “This investment will accelerate our expansion across all regions in 2022, with a particular focus on the Americas, where we have observed a remarkable recovery,” he stated.
Spectrum Equity's Investment Rationale
Steve LeSieur, a managing director at Spectrum Equity who will be joining the board, emphasized the significant market potential as a key driver for the firm’s investment.
“OTA Insight is leading the way in delivering real-time insights and comprehensive commercial support to an industry rapidly embracing dynamic intelligence to maintain competitiveness and optimize performance,” LeSieur commented. “We have been impressed by OTA’s growth, including its performance during the pandemic, resulting in a strategic customer base within the global hotel market. We believe the business is exceptionally well-positioned for continued success.”