Richie Karaburun is the managing director for Roomer, a market place for connecting travelers to other travelers who are stuck with nonrefundable hotel rooms. Richie works closely with hotel and travel companies all over the world to help solve critical customer problems.

Key Takeaways:
4:00 – 81 million hotel rooms in a year have been canceled and have also already been paid for.
6:10 – There are some hotels that won’t refund you if you cancel within 21 days of arrival.
8:45 – Jason talks about how much he likes HotWire, but even he has trouble finding a room he wants.
11:10 – The hotels even use Roomer’s services as well.
14:25 – Like Roomer on Facebook to get promotions and if you refer your friends, you get a $25 dollar credit.
15:30 – Roomer is working towards making this available for cruises as well.

Tweetables:
Based on our research, these’s about 81 million rooms are canceled and paid for.

With services like Kayak, people book and cancel any time.

They can see many deals in some hot destinations anywhere from 20% all the way up to 80% discounts.

Mentioned In This Episode:
RoomerTravel.com

Transcript:

Jason Hartman:
It’s my pleasure to welcome Richie Karaburun to the show. He is the managing director of Roomer and an experienced travel industry executive and destination marketing expert. This is a unique business model and I think you’re going to like it. IT may save you some money in more ways than one. Richie, welcome, how are you?

Richie Kaaburun:
Hi. Thanks Jason, thank you very much to be here.

Jason:
It’s good to have you on. So, tell us a little bit about Roomer and what makes it unique. It really is a unique idea.

Richie:
Ya, definitely. Roomer travel, we’re a market place. We’re not like an online agency. We’re a market where people who are stuck with the nonrefundable hotel rooms, they can actually sell their rooms at their price that they agree to and our sellers can actually come in and find good deals. We’re are actually facilitating both sellers and buyers meeting and, in this case, we’re say we’re all about good karma, because everyday tens of thousands of people cancel their hotel room reservations and they got stuck training their role-age to pay for an empty room somewhere across the world.

Jason:
That’s one of the things I immediately question when I heard about this business model. How big is the market place for this? I just can’t imagine it is very big. I don’t know if I had ever canceled a hotel room that I had to pay for. I have canceled rooms, but one way or another, I got out of it, they left me off the hook.

Richie:
That’s good. You’re one of the lucky ones, because many of the hotels now, 30% overall reservation in many cases are nonrefundable. It’s a new concept where hotels are actually ordeal-ing with. In order to deal with last minute cancellations, they offer customers two different types for one same room. One is the nonrefundable advanced purchase rate, which is generally 15-20% than the flexible rates when you can actually cancel up to the last moment. Based on our research, these’s about 81 million rooms are canceled and paid for.

Jason:
That is a huge market, but I just would like to get a comparison, what is the total number of room nights that are booked. If there’s 81 million canceled and paid for, how many are there?

Richie:
That comes up to about 5% of total room nights.

Jason:
That’s a pretty big market. This is what I love, Richie, about these new internet business models. You know, they’re really taking all of this dormant supply of so many things in our world and putting it to good constructive use. Roomer does that, Uber does that, Lift does that, AirBnB does that. You know, there are just so many ways that bright people have figured out a way to use all of this dormant supply of everything in the world. It’s wonderful. It really is.

Richie:
You’re right, Jason. All the names you mentioned, it’s all about market places and peer to peer market places. It’s all about collaborative consumption, especially with the new generation, the millennial generations, millennials. It’s all about good karma and sharing economy and in this case it’s just really call or go to big online companies, online travel companies, make your booking, but in this case, when I first joined this company the first question I have was, what problem are we solving?

Because, you’re right, in order to make a difference, we have to solve a problem and the biggest problem here for people who are stuck with the reservations that you can’t actually..make it. That’s why our goal is to make travel trader-able, exchangeable, just like you would sell something you don’t need on eBay and that’s what we call it.

We are kind of an ebay for travel. Why not sell something that you’re not going to use and have someone else actually take advantage of the low rate so you recoup some of your money, not all of your money, the buyer gets actually the best deal, which otherwise he or she won’t find it.

Jason:
Yeah, absolutely. So, tell us how it works and how much one might save and how much save both on sides of equation. Save by getting rid of a room you can’t use. I mean, you know, most hotels, I don’t know, it seems like their cancellation policies usually the same day you can cancel before about 5-6pm, but some of them I noticed in booking myself, they have this four day cancellation. It’s not like an airline. You can still, you know, even four days isn’t that terrible, but first of all, what kind of policies you’re seeing from hotels out there and then what do I do when I have a room that I wanna sell, I guess, or exchange.

Richie:
Sure, normal cancellation policy, as you just said, either 6pm or 24 hours prior to arrival date, but more and more hotels based on their occupancy rate, based on the, you know, the travel trends, you can see the cancellations from 3 days and 5 days and 10 days. In fact, it happened to me in the last year when I booked a resort destination in the Caribbean, I didn’t realize that after I booked and I’ve seen the little note saying this room becomes nonrefundable within 21 days of arrival.

So, it’s both resort destinations had even stricter cancellations with 7 days – 10 days, so it is getting more and more popular. Now with the meta-search companies like Kayak and Hipmunk and people are actually able to search. It’s a lot more transparent, so people book and cancel any time, so this cancellation really bothers to the hotels hence they are often more stricter cancellation because they’re giving them lower rates versus the flexible rates.

So, we tell people if you can make it you can always Roomer it. So, they don’t have to, if they called the hotel and the hotel doesn’t actually refund the money, they can always post it, it’s free to use Roomer. What we do is we actually charge 15% to the seller once we sell the room. So, once the person who is actually stuck with the hotel reservation, we call them our sellers, they can post their rooms free of charge, they can name their own price, once they validate it, we actually open this for sale.

Once we sold it, our buyers are actually Roomer and Roomer then pays our seller minus 15%. So, everything is seamless and in this case it’s good karma, because the buyer can get up to 47% off and that’s our average based on the current market rate. Your audience can actually go to RoomerTravel.com. They can see many deals in some hot destinations anywhere from 20% all the way up to 80%. It’s all up to how motivated the seller is to sell the rooms.

Jason:
But what about selection? Again, this is only 5% of the market. Sometimes I really like HotWire pretty well. I’ve used it quite a bit and they gave me a VIP membership, which is nice because they’ll give you some privileges there, you don’t have to be totally stuck to their exact rules sometimes, which is nice. You know, sometimes even on HotWire I can’t even find a room I want.

Richie:
If you book HotWire rooms, many of the rooms are nonrefundable once you book to HotWire and it’s nonrefundable. Once you pay HotWire, you can’t actually cancel it.

Jason:
So, with Roomer you do know the hotel, right?

Richie:
Yeah, exactly. You do know the hotel, but you actually look at RoomerTravel.com you can sort out based on the destination or we actually in order to make it easy, we have kind of a general hot spot in additional last minute deals or amazing deals and we have the discovery cities like New York, Paris, Las Vegas, San Francisco, those are obviously our top destinations based on our Roomer travels and we have over hundreds of thousands of hotels. This is a global marketplace.

So, not only can you actually post a room anywhere in the United States, you can actually see Roomers all over the place including Thailand, Philippines, and Turkey, and Greece, and Italy. Definitely we encourage everyone to actually go, sign up with room, like us on Facebook, and in fact, we have our ongoing promotion is a $25 credit if you refer to someone and if they book, you get $25 dollar and they get $25 dollars in order to increase the loyalty.

Jason:
Okay, okay. So, how many rooms would I find, say, in San Francisco or Las Vegas if I wanna stay there this weekend?

Richie:
You can actually book, you can do hundreds of hotels because we have different inventory sources and not only to peer to peer entry, we also work with some of our meeting planners and event organizations whenever they have some distressed inventory, they use Roomer platform, we call it Roomer Partner Net whenever the meetings are canceled and they got stuck with a lot of the group rooms, they can actually use Roomer as kind of the distribution channels as well.

Jason:
Good, good. So, the hotels use it too then, ah.

Richie:
Some of the hotels are actually using us when they have actually cancellation, definitely, and they actually use that. We’re basically a platform whenever they want to actually use us anywhere. They are generally the general hot spots and you can definitely see hotels. I’ve just checked while I’m talking to you in Las Vegas what we have online this weekend. We have rooms anywhere from $87 dollars for four star hotels to $109 to 5 star hotels and this is just this weekend. You can go and search and find the best hotel for your budget.

Jason:
That’s fantastic. So, good, good, because I know that room would probably either of those rooms that you gave an example of them in Las Vegas this weekend would probably easily be doubled the price.

Richie:
Oh definitely. In exchange, you can see certain rates, what we call market rates across that range just to get some comparisons to our users. They can see what’ the going market place is versus the Roomer price basically. We have the trip adviser ratings as well, so if they’re not familiar with the hotel, they can actually read so they don’t have to log in to different sites. It’s all in one simple booking process.

Jason:
Fantastic. When did Roomer start? How old is the company and who is behind it? Is it just a startup or does it have a big company behind it?

Richie:
Oh yeah, we actually started 2 and a half years ago. The company is based in Telavi and we opened a New York office a year ago. It started with two very intelligent co-founders and then we got the venture capital backed company and one of our board member is the owner of Waze. Your listeners would know Waze. It’s a good application, kind of a social GPS, Google bought Waze $1billion dollar, so the owner of Waze is in our board as well as some well known both hotel investors as well as some private equity firms overall. So, we’re heavily founded company. It’s about 3 years old.

Jason:
Fantastic. Well, good stuff. Anything else you’d like us to know about Roomer or?

Richie:
We would like your listeners to go, whenever they want to travel, check with Roomer Travel first. RoomerTravel.com. General hot spots like New York, Las Vegas,Paris, we kind of guarantee that they actually will find great, great rates in addition to some other resort destinations as well and as we say, we’re all about good karma.

We’re not all about transactional travel. You’ll see our users, you’ll Roomer users, and when they read our testimonials how we actually help and the problems we are solving to our users. Definitely like us on Facebook to get the specials and in my friend’s promotions, it’s there where they can actually get $25 Roomer credit and their friends can get $25 dollars as well for the first booking.

Jason:
I so wished you could do this with the airlines. Just out of curiosity, I’m sure that thought has occurred to you and with cruise ships too, do you do it with cruise ships?

Richie:
It’s funny you should mention, I didn’t want to mention that, but it’s our phase 2, we’re looking at the cruises. There is a name change-ie for cruises anywhere from $150 dollars to $250 dollars. However, when you book $2,000 and if you didn’t buy any insurance, which to my surprise, many people who buy cruises, they don’t buy insurances, so definitely we are looking into the cruise industry as well as phase 2 because our vision is we wanna be the biggest market place for travel or we wanna be the eBay for travel. So where people can find cruises and ski packages and hotels. Yes, I wish too that we could do this for the airline, but I’m hoping one day that will happen as well.

Jason:
So, what is it with the airlines? Is that just seemingly like a insurmountable problem with airlines that..

Richie:
I think it changed. Airlines were a lot more flexible. I think they were even doing the name change fees before September 11th. I think September 11th changed some airlines went above and beyond and in terms of security and they just do not allow the name change for airline ticket and I’m hearing that they are some airlines that are thinking of that as long as you can keep the original fare and there’s always change fee and fare differences as well.

So, airlines are a little more complicated just like they’ve always been. So, it is it is a complicated. I know some consumer groups are working, lobbying, in DC for that to happen so this could be as easy as the hotels and you can, you know, add a name, change a name, and everything as well. So, we’ll see.

Jason:
Well, hey, thank you so much for joining us. I appreciate it.

Richie:
Thank you very much. Take care. Thank you for having me.