In early September, Indian hospitality startup OYO made an almost implausible claim. The Gurugram-headquartered startup said its machine learning-based algorithm analyses 144,000 data points every hour and makes 60 million price changes every day to the prices of its 35,000 hotel rooms globally. The Indian hospitality startup said the algorithm works with 97% accuracy.
Take that as you may (after all, just five months prior, OYO CEO Ritesh Agarwal said the company made over 150 million price changes per day), but what’s undeniable is that dynamic pricing intelligence is the backbone of the hospitality and travel industry.
From hoteliers like OYO to ride-hailing firms like Uber; from airlines like Lufthansa to cruise liners like Carnival Corp—the ability to alter pricing and make those prices available across online travel aggregators (OTAs) is crucial. This, after all, is a market expected to be worth $1,091 billion by 2022. According to research firm Allied Market Research, the market has had a compound annual growth rate (CAGR) of 11% since 2016.
And no matter how much technology they have in-house, hospitality and travel companies invariably turn to someone else in their quest to make available this “best price”. In June, OYO did just that. To ensure more OTAs carried its listings, it teamed up with RateGain.
Started by Bhanu Chopra 15 years ago, RateGain has amassed an enviable list of customers. It says its price comparison and channel management services are used by every Fortune 500 travel & hospitality company in the world, including 25 out of the top 30 OTAs, 23 of the top 30 hotel chains, and seven of the top 10 car rental firms. As Chopra says, RateGain’s tentacles are inextricably intertwined in the global travel ecosystem.
No surprise then that the Noida-headquartered company has clocked over 100% revenue growth in the last one year, while its profit stood at Rs 20.9 crore ($2.92 million) for the year ended March 2019. Now, Chopra says RateGain is targeting $100 million in annual recurring revenue (ARR) by March. That would make it India’s first vertically-focused software-as-a-service (SaaS) company to touch the magical $100 million mark. Chopra also dangles the possibility of an IPO in 2021.
RateGain’s bold ambitions, however, are a break with tradition. After years of steady, organic growth, RateGain made two acquisitions in quick succession. In August 2018, it acquired Dallas-based DHISCO, which lists hotel rooms across various platforms.