Guide for launching a hospitality startup

What is a hospitality startup?

A hospitality startup is an innovative new business venture that seeks to revolutionise the hospitality industry through fresh ideas and cutting-edge technology. These startups aim to address the evolving needs of both businesses and customers by offering solutions such as advanced booking and reservation systems, efficient property management software, personalised guest experience tools, and sustainable operation practices. 

There’s a broad range of different types of hospitality startups, but the one thing they all have in common is that they have incredibly high pressure to succeed, and to do that, they must be both efficient and innovative in equal parts.

Every day new business ideas are formulated, new companies are created, new businesses established. Many of them, regardless of industry, are looking to disrupt and change the environment they exist in. The only way for them to get ahead is to offer something consumers haven’t seen before, or offer value no competitor can match.

In this blog we’ll explore the ins and outs of hospitality startups, including some tips on how you can make sure yours succeeds.

Challenges hospitality startups face and how to overcome them

Launching a hospitality startup presents some hurdles, from securing initial capital to building a trusted brand and maintaining operational efficiency. Overcoming these challenges relies on recognising and addressing them early, and adopting effective strategies can significantly improve your startup’s chances of long-term success.

1. Funding and financial management

Securing adequate funding and managing finances is often the first major hurdle for hospitality startups. Initial investments can be substantial, covering property, technology, staffing, and marketing. Poor financial planning can quickly derail promising ventures.

• Explore diverse funding sources: Consider angel investors, venture capital, crowdfunding, government grants, or small business loans to diversify your financial base.
• Scale responsibly: Launch with a minimum viable product (MVP), validate your business model, then scale operations incrementally to manage risk.
• Optimise cash flow: Invest in reliable accounting software, apply dynamic pricing to maximise revenue, and regularly review expenses to eliminate unnecessary costs.

2. Brand recognition and differentiation

Standing out in the highly competitive hospitality landscape is critical yet challenging. New startups often struggle to differentiate themselves from established brands, making it tough to attract customers and build trust.

• Invest in a compelling brand identity: Craft a unique and consistent brand identity, featuring a user-friendly website, striking visuals, and a clear unique value proposition (UVP).
• Focus on storytelling and social proof: Highlight customer success stories, leverage influencer partnerships, and maintain an active social media presence to build credibility and awareness.
• Clearly define your niche: Specialising in eco-friendly travel, hourly bookings, digital convenience, or wellness tourism can help you connect directly with your target market.

3. Customer acquisition and retention

Hospitality startups must continuously attract new customers and foster loyalty, but reliance on OTAs (Online Travel Agencies) can increase acquisition costs and limit direct engagement.

• Prioritise direct bookings: Build an intuitive, well-designed website equipped with direct booking technology and implement targeted digital marketing campaigns.
• Personalise guest experiences: Use data analytics to understand your guests’ preferences and offer tailored recommendations, loyalty rewards, and exclusive offers.
• Proactive reputation management: Respond promptly and professionally to reviews, swiftly address negative feedback, and continuously refine your guest experience.

4. Scaling and operational efficiency

Scaling your hospitality startup involves managing complex operations across multiple properties while maintaining quality, consistency, and efficiency.

• Standardise operations: Develop clear Standard Operating Procedures (SOPs) for tasks such as check-ins, housekeeping, and customer service.
• Automate with technology: Integrate solutions like AI-powered chatbots, automated revenue management systems, and smart locks to streamline guest interactions and operations.
• Optimise management systems: Adopt cloud-based hotel management systems to centralise processes, making it easier to monitor performance and quickly respond to challenges.

5. Workforce management and retention

Employee turnover in hospitality is notoriously high, impacting service quality, increasing recruitment costs, and making talent retention a continuous challenge.

• Invest in your people: Provide competitive wages, ongoing training, and clear career progression pathways to foster loyalty.
• Enhance staff engagement: Recognise achievements, offer growth opportunities, and foster a positive, inclusive workplace culture.
• Utilise workforce technology: Implement staff scheduling and management software to reduce workload stress, streamline communication, and improve overall staff satisfaction.

Give your hospitality startup a competitive edge with SiteMinder

Leverage SiteMinder’s smart platform to maximise your bookings, streamline operations, and enhance your guest experiences.

Learn more

Why is innovation in travel startups important in the hospitality industry?

Differentiation is crucial for success in hospitality, and providing unique and personalised guest experiences is paramount. The tourism sector, a major economic driver, constantly evolves to meet customer needs, with technological innovation playing a key role. 

Adopting both new technology and innovative practices is essential for enhancing guest satisfaction, streamlining operations, and staying competitive. Here are a few of the reasons why:

To improve guest experience

Using advanced technology helps hotels offer more personalised and memorable stays. Real-time solutions and customisation enhance guest satisfaction and encourage repeat visits.

Enhance hotel operation efficiency

Automating tasks like check-in/check-out, room service, and energy management saves time and cuts costs. Streamlined operations make everything run smoother and more cost-effective.

Stay competitive 

In a constantly evolving industry, hotels need to adopt new tech to stay ahead. Smart rooms, virtual reality tours, and AI-driven recommendations give guests a unique experience that rivals can’t match. By continuously innovating, hotels can attract more guests and keep them coming back.

Meet changing industry and guest needs

As technology improves, so do guest expectations. Guests now look for instant booking confirmations, voice-activated room controls, and personalised recommendations. Leading in innovation ensures hotels can meet and exceed these rising expectations, offering a top-notch experience.

Hourly hotel startup: How this travel startup idea works

Innovation in hospitality startups means thinking outside of the box—or, in the case of Brevistay, thinking outside of typical reservation times.

Brevistay, launched in 2016 in Noida, India, offers a unique hotel booking model where guests can book rooms by the hour. This service caters to travellers needing short stays, with options for 3, 6, or 12 hours and flexible check-in times. It provides an affordable and convenient solution for layovers, business trips, or day-use. 

Short term hotel room rentals is not necessarily a new idea. Brevistay’s innovation comes in the form of how that need is met. Rather than providing the rooms directly, Brevistay partners with over 3,000 hotels in 70+ cities, operating on a commission-based model. By filling otherwise vacant rooms, this startup helps hotels increase occupancy and revenue.

This is just one example of what innovation can look like in the hospitality industry. You don’t need to reinvent the wheel; simply improving on an existing solution – or in Brevistay’s case, applying new technology to it – can make all the difference in the world.

“We were aided by SiteMinder because they truly brought about a ‘revolution’ for our property. All tasks are integrated between our website, booking page, and property management system - effective handling of booking channels, thereby increasing revenue, and most importantly, improving our customer experience.”

Viki Edy Priyatna,

E-Business & Reservations Manager

Qunci Villas

Read more

Recent & successful hotel startups

In a highly variable and constantly shifting industry like hospitality, it pays to keep your eye out for new players that are making it work. Here are our top 3 movers and shakers of recent times.

Nuitée

Nuitée offers infrastructure APIs to hotels and travel businesses, enabling developers to seamlessly embed hotel booking features. The company operates in Ireland, Spain, London, Morocco, and the US, and is currently profitable. In December 2024, Nuitée announced a €44.3 million Series A funding round led by Accel; until then, it had been bootstrapped.

Tebi

Tebi, co-founded by Arnout Schuijff, former co-founder and CTO of Dutch fintech giant Adyen, aims to simplify finance for restaurants, bars, and cafes via a streamlined Point of Sale (PoS) and operations platform. Tebi distinguishes itself from competitors by offering free services to businesses below a certain revenue threshold.​ In October 2024, Tebi raised a €20 million Series A round led by Index Ventures.

Katanox

Katanox is a platform that unifies direct distribution and financial infrastructure for the hospitality industry. The company has consistently grown its employee count since its launch. In 2022, Katanox secured €5.2 million in early venture capital funding.

5 top hospitality tech startups 

A select few manage to forge a successful niche, or in some cases a global presence, striking at the right time, in the right place, to the right people. Here are 5 startups providing a unique and useful service in the travel industry…

1. Airportr

Based in London since 2014, Airportr picks up luggage anywhere inside the M25, and drops it off at either Gatwick or Heathrow airports. Collaborating with British Airways, it also offers the additional service of checking in bags remotely. The company also plans to expand by adding more airlines, before branching out geographically.

What makes Airportr special?

Given international arrivals are set to increase from 1.3 billion in 2017 to 2.3 billion by 2030 and increasingly strict regulations around baggage, a company that takes away the hassle will be popular.

2. Flyto

Launched two years ago, Flyto builds software that integrates with a travel provider’s website and offers customers a way to pay for their travel in instalments, while Flyto pays the travel provider upfront. Flyto is already backed by Mastercard and Telefonica and is being advised by executives from Sabre and British Airways.

What makes Flyto special?

It’s a system that presents a very lucrative offer to travellers, who may use it to travel more regularly. It gives them more freedom and flexibility to visit the places they love.

3. Hotel Tonight

This app lets users find cheap hotel rooms at the last minute and is now available at 250 destinations in 17 countries, expanding further into Europe with the additions of Germany and Switzerland last year. The company also added a couple of innovative features: users can now ‘gift’ a room to someone else, and ‘Snap Your Stay’ encourages users to snap, edit, and upload shots of their hotel rooms to receive credits ranging from $5 to $10. 

This means instead of hiring professional photographers to generate a visual presence, it crowdsources photos from its social media base of customers.

What makes Hotel Tonight special?

For hotels in busy destinations, it’s a perfect partner to achieve late increases in occupancy and drive more revenue. You can read more about how we work with Hotel Tonight here.

4. Net Solutions

Artificial Intelligence (AI) has come a long way. Its ability to understand human behaviour, particularly in terms of natural language understanding (NLU) and natural language processing (NLP) is now advanced. Chatbots allow travellers to directly interact with travel agents in a trusted manner, before and during travel.

Net Solutions leverages chatbots to provide a personalised travel experience. The startup’s chatbots can be launched on Messenger, Telegram, and Slack and other services, providing full analytics to better understand customer behaviour. The service includes features such as customer support, tracking orders, and distributing content.

What makes Net Solutions special?

As hotels move deeper into improving customer service, systems like these could help make the job much simpler, paving the way for more fluid conversations between businesses and guests.

5. Alice

Alice was created four years ago to make life easier for hotels to manage their operations. With Expedia as an investor, Alice provides a single system for guests, front-of-house workers, and back-of-house staff to communicate and track requests. The unified system means that a guest request sent via text message for perhaps more pillows or mini-bar snacks is conveyed to the right member of staff at the hotel.

What makes Alice special?

It presents an attractive offer for hoteliers who are often very busy and short on time. Being able to get everything right and respond quickly is vital for giving guests a good experience.