STARTUP STAGE: HostAI creates AI-powered direct marketing for independent travel brands

HostAI

HostAI uses artificial intelligence to develop marketing strategies to drive direct revenue growth for hospitality brands.

The startup has received early developer access to OpenAI's ChatGPT plugins and is working on integrating the technology to boost direct distribution for vacation rental managers and soon boutique hotels.

What is your 30-second pitch to investors? 

We’re an artificial intelligence-first “Shopify for Travel.” We empower independent brands to go to market like tech giants, starting with vacation rental managers (VRMs).

Describe both the business and technology aspects of your startup.

HostAI is an AI-native software built to empower independent travel brands by offering an autonomous one-stop shop for direct distribution.

From a technology standpoint, we've developed an AI that autonomously generates and executes marketing strategies, including creating targeted landing pages and ads without any user input required. 

We want to make direct distribution as simple as distributing your inventory through online travel agencies. For our core product, we charge a small success fee on the bookings we generate for our clients. 

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.

Strengths:

• Unique AI-first approach to direct distribution
• Experienced founding team
• Ability to offer lower take rates compared to competitors

Weaknesses:

• Limited brand recognition as a new player in the market

Opportunities:

• The fast-changing landscape of online travel distribution with the advent of AI
• A vast addressable market of independent travel accommodation brands 
• Expansion into other travel verticals outside vacation rental managers and boutique hotels
• Further technological advancements in AI

Threats:

• Intense competition from established OTAs and other travel tech startups

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

For guests, we aim to facilitate a more efficient and cost-effective booking experience by connecting them directly with accommodation suppliers.

From an industry perspective, we help independent travel brands get their brand and inventory out there in front of their ideal guests by offering them an AI-powered one-stop shop for direct distribution.  

So you've got the product, now how will you get lots of customers?

First and foremost, our focus is on building the most effective direct distribution solution out there and letting the outcomes we deliver for our clients fuel our growth engine. The most important part of our growth strategy is high retention.  

We're also excited to explore mutually accretive partnership opportunities with other industry participants such as property management systems, revenue managers, channel managers and content creators. We have been fortunate to have the support of some of the leading industry players from the early days of our journey. And look forward to partnering with more.  

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

Direct distribution has long been a challenge for independent brands since the dawn of the internet era. Our holistic and contextual approach to addressing this problem has resonated strongly with our clients, so much so that we've had the privilege of working with leading independent brands from the very first days of our journey. Their ongoing support and guidance have been invaluable in refining our product to better serve their needs.

How and when will you make money?

Our revenue model is directly tied to the success of our clients. As they generate more direct revenue through our platform, our earnings increase proportionally. This mutually beneficial approach ensures that we are incentivized to continuously improve our product and help our clients maximize their direct bookings and revenue.

What are the backgrounds and previous achievements of the founding team?

Amirali Mohajer brings extensive experience in the online travel industry, having scaled an online travel agency from 50 to 10,000 bookings in just two years as a managing director. He also worked with the incredible team at Agoda as head of product for supply monetization. Heeyoung Lee and DK Choe completed their Ph.D.s in natural language processing at Stanford and Brown, respectively. They have strong backgrounds in building language-based products, with contributions to major projects such as Google Assistant, Search on Google Drive, and Gmail's Smart Compose. This unique blend of industry knowledge and technical expertise positions our founding team to drive significant innovation in the travel distribution space.

How have you addressed diversity and inclusion within your business?

The three of us are first-generation immigrants to the United States, coming from Iran and South Korea. So diversity is baked into our DNA, and we are very much committed to continue fostering a diverse and inclusive work environment.

What's been the most difficult part of founding the business so far?

Making the most important thing the most important thing. We have a very lean team and too many ideas for our product. Ruthless prioritization is both incredibly important and challenging.

And of course, developing a highly complex AI technology and a multi-faceted product while simultaneously building the business infrastructure and most importantly delivering value to our clients is always challenging.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

We know we’re working on a problem that our clients deeply care about: growing direct revenue. And we firmly believe that we're entering a new era of AI that will fundamentally transform the way travelers discover and book accommodations. 

And this new AI-powered discovery paradigm presents significant opportunities for direct distribution. Our industry experience, deep understanding of cutting-edge LLM technology and wide network of supporters enable us to move quickly to adapt to the changing landscape. By leveraging the power of Large Language Models, we're uniquely positioned to deliver substantial value to our clients in highly tangible and scalable ways. 

A year from now, what state do you think your startup will be in?

Our goal for the next year is to help the selective clients we partner with to increase their direct revenue by at least another 10 percentage points. 

What is your end-game (going public, acquisition, growing and staying private, etc.)?

Our end-game is to transform entrepreneurship in the hospitality sector by making it incredibly easy and cost-efficient for operators to find their ideal guests and nurture relationships with them. This will enable operators to focus on what matters most: delivering amazing experiences for their guests. We will pursue the path that best supports the realization of this vision. Knowing well that our ability to help our clients succeed will directly drive the value we generate for our investors and our team.