Booking hotel rooms by the hour, or even minute, has a seedy, salacious connotation associated with it. Just the type of thing Silcon Valley is into.
Enter Recharge, an app that allows users to book a hotel room and pay by the minute. (It’s osensibly for a quick shower or something akin.)
Currently only available in San Francisco, the start-up app,available on iTunes, enables users to book a stay in a hotel for as low as 67 cents a minute, or $40 an hour.
And it’s gaining steam. The 10-month-old company is attracting investors, already secured $650,000 in seed money from early Google engineer Harry Cheung. Other investors include Scott and Cyan Banister, notable angel investors with ties to PayPal and Postmates.It’s so cool that it already has its own reddit-type thread.
It’s so cool that it already has its own reddit-type thread.
1) Tap a button and instantly reserve the nearest Recharge
2) Visit the front desk to check in and pick up your room key
3) Tap check out in the app to end your stay
It’s catching on. Some hotels are already attached to the service, including Hyatt and Starwood properties in San Francisco. My take: It’s one way for hotels to fill empty rooms, which are a perishable commodity.
The CEO of Recharge, Emmanuel Bamfo, spilled the beans to Tech Crunch.
Here’s the transcript:
TC: Okay, so tell us about this seemingly crazy idea that just might work. Who is your target audience?
EB: Somebody who came up to San Francisco from L.A. for a day trip booked a Recharge earlier today. We see folks who just want to change a diaper or nurse their baby. We get people who live in Menlo Park but work in San Francisco and who want to shower and take a little time for themselves before they head to an evening engagement.
It’s a real need that we’re solving. [Customers] are getting privacy in the city to nap or shower or prepare for something. You can’t do that at Starbuck’s.
TC: This concept is very much like that of Breather, which provides on-demand rooms in cities so that visitors can pop in to relax with friends or maybe make some quiet calls. We should also note that Breather has raised nearly $28 million from investors. Why is this better?
EB: It’s similar to Breather, but a Breather is in an office space. You can’t use it on the weekend. It’s a 9 to 6 o’clock kind of thing. We’re offering users a bed, a shower, a bathroom. That’s not currently on the market elsewhere, which is why we think we’re seeing people from Salesforce use it, people from the venture community, from law firms. We’ve had guests stay 12 minutes; we’ve had someone stay 25 hours.
TC: Twenty-five hours sounds like lousy planning, but you’re saying there’s no minimum stay?
EB: There isn’t. We have a relationship with Hyatt and Starwood Properties in San Francisco, and every time someone books a Recharge, that person can stay as long as he or she likes and the hotel will clean the room afterward. Someone might stay 20 minutes one day at one property, then stay again at a different property for two hours before an evening event. It’s worth it to the hotel.
TC: And you split the revenue?
EB: We share revenue with the property that [ranges] depending on the day and time and the time of the month.
TC: Are you on the hook for a certain amount of inventory?
EB: No. We aren’t buying these rooms and reselling them. If people come, we make money and so does the hotel. If not, we don’t. But we have inventory every single day, and we’ve brought evidence that the hotels can make money from [us]. We’re creating a new source of revenue for hotels in bringing them local customers; we’re also creating a new source of productivity for customers. People don’t have to drive back to Palo Alto to prepare for an evening thing.
TC: You said your revenue split changes depending on the day and time. Do users pay surge pricing, too, or else do you offer discounts to people who want to stay, say, eight hours instead of 12 minutes?
EB: We don’t have surge pricing, and right now, when a customer wants to come for eight hours, they pay by the minute. We do plan to include a day rate but we don’t have that right now.
TC: You quietly launched last summer in a handful of hotels in the Bay Area. Can you say how many people have used a Recharge so far?
EB: We’re not talking publicly about our numbers, but we’ve grown 104 percent month over month, and 25 percent of stays are coming from repeat customers.
We’re operating just in the Bay Area right now, though we’re opening up coverage, starting with the [San Francisco] airport and we plan to go to L.A., New York, and London next.
TC: A lot of people are going to see Recharge as a place for hanky panky, because, well, humans. Is this something you or your hotel partners are concerned about?
EB: We haven’t seen the rock-and-roll customers. We’re in prime-time San Francisco. These are business hotels. And you can be rated by the hotel, so there’s a certain expectation. There’s ample evidence that people want to use these as a short-term living space beyond thinking about
This article originally appears on Hotelmanagement