How The Hotels Network Landed 3k Customers and Hit $4M in ARR

Third party deals sites like Orbitz and Expedia have been huge for helping hotels grow their footprint and bring in more customers over the years. But, while the commissions and deals drive more sales, they ultimately cut into their gross margin. Nothing beats booking a new customer organically on your site.

The Hotels Network was developed to help hotels improve conversions on their native websites. Their state-of-the-art software and marketing platform gives hotels the tools they need to increase direct bookings through personalization, predictive analytics, reporting, and retargeting.

How much is The Hotels Network doing in ARR?

The Hotels Network is a pure-play SaaS product that charges its customers on a monthly basis. Hotels pay the company up to $300 each month for their premium offering with the average property generating between $150 and $200 in revenue each month.

According to CEO Juanjo Rodriguez, The Hotels Network serves 3k paying hotels today and is doing between $4M and $5M in ARR right now. The company is currently growing between 100% and 150% year over year and was doing less than $1.9M in ARR 12 months ago.

What is The Hotels Network’s churn?

In terms of net revenue churn per month, The Hotels Network is currently below 1% at this point in time. Rodriguez noted that the company hits net negative revenue churn some months by driving expansion revenue via upsells to new product lines.

The Hotels Network pays between $600 and $800 to acquire a new customer, Rodriguez explained. The company is driving acquisition through a team of 15 salespeople focused on specific geographical territories. Overall, they receive payback within 6 to 9 months.

How much has The Hotels Network raised?

In February, The Hotels Network raised $3.7M to drive growth within the business, after achieving profitability. This Series A round came from European investors and a 6-8x ARR valuation.

Going forward, their team of 39 employees in Spain is looking to grow as they use their newly raised venture capital to fuel product development and sales efforts this year. Be sure to keep an eye on The Hotels Network as they ambitiously look to cross $6.5M by the end of 2018.