One flew over the Cuckoo's nest

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Laterooms

Manchester based design agency Cuckoo catches up with Steve Walsh, founder of the groundbreaking site LateRooms.com, to talk about transforming the travel industry as we know it.

LateRooms.com, was founded in 1998 by brothers Steve, Tony and Paul Walsh as a subsidiary brand of marketing agency Walsh Simmons, in the Old Bank Chapel Street, now known as Cuckoo.

With the recent larger-than-life arrival of Airbnb and the landslide of online tools and comparison website for the travel and hospitality industry, we felt it was high time to reflect on our journey, looking at where we started back in the 1990s…and speak to Steve Walsh, the man behind the big idea.

Tell us about how you came up with the idea?

SW: Prior to the arrival of the information superhighway in 1996, I ran a marketing company in Manchester called Walsh Simmons. We had a number of clients in the hotel sector including De Vere Hotels. Their constant lament was the difficulties in filling empty beds at late notice. Advertising, mailshots etc, all the conventional marketing tools couldn't be implemented quickly enough or cost effectively, for example, to fill 13 empty rooms available in the De Vere Blackpool for tomorrow night. As consumers, we also knew that if you could identify a hotel that had empty rooms you could call them and negotiate a late booking deal. The problem was finding the hotels. Laterooms.com simply put the two sides of the problem and the advent of the internet made it possible.

What challenges did you face when you were setting up and how did you overcome them?

SW: Recruiting hotels was the first problem. We built the web site and populated it with 250 totally fictitious hotels. This enabled us to demonstrate how the site worked and the benefits for hotelier and customer. Then, as a real hotel signed up for the service, we deleted one of the fake ones. We also built an email gathering robot that trawled the web sucking in hotel email addresses. We built a database of about 30,000 UK hotels and spammed them basically. Naughty I know, but in those days; there were no rules.

It was easy to encourage hotels to add their rooms to the site. We let the hotels use the service for free and they were soon convinced of the merits when empty rooms were being filled. I met a guy in a bar once who told me Laterooms.com had helped save his parents B&B in the Lakes. That was particularly nice.

How do you think digital has transformed the travel booking experience since laterooms.com was born?

SW: It has certainly made it easier. You can book a flight, a car rental and hotel in the space of 10 minutes from the comfort of your kitchen table. I think we sometimes take the power at our fingertips for granted.

What challenges do you think the travel industry faces right now?

SW: Every business faces challenges and always will. The internet is simply another route to market.

Another channel, that like all channels is ever evolving. I think the level of competition is now more intense because anyone can now generate business online.

Could you comment on the online travel agents vs third party intermediaries issue, and explain how you think it will pan out?

SW: Look at it from the other direction. Hoteliers, villa owners, flight operators, car hire etc, don't care where the booking comes from. So for them, there is no distinction between an online travel agent or a travel blog with links.

Sure, full service travel agents have suffered, because travellers now can build their trip piecemeal and book flights, hotels direct. But equally, there will always be travellers who prefer to use an agent - for reassurance and ease. I don’t see it as a question of agents versus DIY.

How important is data and personalisation for the travel industry?

SW: Data is information, and the more information you can give to a customer, the greater your chances of generating a booking. Particularly if that data is personalised and targeted accurately, whether via Google and Facebook search and viewing patterns, or location info or segmentation of customer databases.

How do you feel about integrating AI into the travel booking experience?

SW: Would I trust a robot to book me a holiday? I don't know. Would I like to have a virtual reality pre-view of a resort, hotel, private villa before I booked? Yes, and I think this is inevitable, particularly if you are looking for new sales tactics and propositions to enable your business to stand out from the competition. Marketing is all about ideas and always has been, only the way the ideas can be executed has changed and evolved via the internet.

What are your predictions for the future of marketing travel?

SW: I remember in 1996 saying to my brother Tony, one day it will be possible, via a phone, to sit on Bondi Beach and share the experience with your mum sitting at home in rainy Manchester. Well, it didn't take long to happen.

My son is currently working in New Zealand and I can see him and talk to him via Facetime, and that is amazing. Almost as good as being there. However, New Zealand is a grueling 27 hour flight away.

If someone can come up with a way to travel at the speed of light, or time travel, so I could go and visit New Zealand for 3 weeks and then zoom back to the UK on the same day I left, without taking time off work, that would be the future.

Laterooms was launched in October 1999. In December 2004 ECI Partners, a Manchester based investment company took a controlling interest in the company and Laterooms was subsequently sold to in late 2006 to Tui Travel for £100 million.

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