Smartpricing designed to bring the revolutionary impact of AI to the lodging industry
Please introduce yourself and the Startup Smartpricing to our readers!
Smartpricing is the first of a host of SaaS products designed to bring the revolutionary impact of AI to the lodging industry.
Smartpricing is a revenue management software which launched in 2020. We created it while being property managers ourselves, addressing the challenges we faced with pricing. Interestingly, our first clients turned out to be our first investors as well.
From a team of 3 founders, we have grown into a team of over 100 talents with international experience in tech, tourism and consulting working together at our headquarters in Italy and remotely.
Why did you decide to start a business?
My roots are in the hospitality industry. At the tender age of 14, I embarked in my career as a waiter, enduring a terrible experience with a hotel owner. But this challenging episode didn’t deter me; instead, I went on to establish a disco club while still underage – yes, you read that right, and I’m not entirely sure if it was legal.
Later, I managed properties in three different countries, and although some of these experiences were quite dreadful, we all have to start from somewhere. In 2018, I got in touch with two old friends, Eugenio Bancaro, a developer with experience in Silicon Valley, and Tommaso Centonze, at the time a consultant for Google, to start running vacation rentals on Lake Garda.
We wanted to optimize our operations, but could not find any software to handle dynamic pricing for our accommodations that satisfied us. We realized we would have to create our own solution, so we designed a prototype of the software and tested it on our properties and on a hotel, seeing promising results just shortly after.
At this point we knew we had come up with a possible game changer for many hospitality entrepreneurs and, consequently, decided to introduce Smartpricing to the market.
What is the vision behind Smartpricing?
We want to equip hoteliers and other hospitality business owners with the software tools they need to face the future of the industry. That’s why we focus on developing the most intelligent and user-friendly AI-based software possible.
The potential of leveraging AI and automation in this industry is huge: many small and independent businesses are still not on the cloud or not even using technology in their daily operations. That’s why we are working on designing the entire tech-stack for hotels and vacations rentals.
From the idea to the start, what have been the biggest challenges so far and how did you finance yourself?
We started a month before the pandemic, and obviously that was a big challenge for us. Given the total shutdown during the pandemic, many hoteliers remained reluctant to adopt new tools given the continuing uncertainty.
At the same time, Covid made it clear that they had to change course, innovate their work, and pursue other avenues to remain competitive in a new environment that had been created. Smartpricing supports that process, so the change of context dictated by the pandemic also helped us in some ways. Investors and lenders strongly believe in our project and, so far, have invested more than 7 million euros.
Who is the target group of Smartpricing?
We’re targeting independent hoteliers and managers of vacation rentals, hostels and other kinds of accommodation.In Italy, for example, there are over two-hundred thousand small and medium businesses and very few large companies.These businesses are excellent in creating a welcoming and intimate atmosphere that really taps into tourists’ demands.
But in many ways, they are also extremely vulnerable to being overpowered by big international chains, new trends and unexpected events.Still, many entrepreneurs in the lodging industry are very reluctant to change and many of them are still skeptical of digital tools.
We have seen that the hotels that are achieving results these days are the ones that are most receptive to change. We want to help hospitality companies recognize the benefits in such change but importantly, support them along their journey of transformation.
How does Smartpricing work? What are the advantages? What makes you different from other providers?
Smartpricing analyzes data from accommodations and their reference market, this means hundreds of thousands of data points, dozens of times per day. Based on this insight, the software is able to predict booking behavior and set the optimal rates for rooms or accommodations at every moment, maximizing profitability.
On average, our customers increase their turnover by 40% while also saving time, up to 500 hours a year. Other providers of revenue management software don’t rely on the latest AI-based technology and never reach this level of performance combined with the ease of use that our cloud interface offers.
We invest about 10 times more in research and development than our competitors in the domestic market to bring the benefits of AI and machine learning into all business areas of the hotel.
Smartpricing, where does the road go? Where do you see yourself in five years?
In 2023, we want to consolidate more and more in the Italian market while expanding our growth in other European markets. This year’s focus is on the DACH and UKI markets. We have many new features planned for release to make sure that all tools available to hosts will integrate more and more seamlessly with each other. On top of that, we want to leverage AI in a way where we can manage every aspect of the property in an increasingly intelligent and automated way.
Our second product, Smartpaying, simplifies the management of digital payments and the sale of ancillary products. From there, we will make the complete software setup of hosts more performant and smart, starting with the channel manager, property management system and booking engine to tools for marketing and disintermediation.
Presently, we have clients in 15 countries. As we look at the next five years, our goal is not only to expand into new markets and launch groundbreaking products, but to fundamentally change the lives of entrepreneurs. We are ambitious about our potential, foreseeing the possibility to reach over 100 million in Annual Recurring Revenue (ARR) within five years. Our long-term vision goes even further, with the potential to exceed 1 billion in ARR in the next decade.
At the end: Which 3 tips would you give to future founders?
- Hire people better than you
- Build something people love
- Be ready to work 100 hours a week, and you must love it
Statements of the author and the interviewee do not necessarily represent the editors and the publisher opinion again.