Ten years ago SiteMinder co-founders Mike Ford and Mike Rogers saw a problem – and an opportunity. Product distribution was a nightmare at a Sydney hostel Mike Ford part-owned. Managing online travel agent bookings was slow, clumsy, labour-intensive, time-consuming.
There had to be a better way…
And there was.
But no-one had any inkling that would be the first step in a business journey that has so far led to creation of a global hotel technology company with 23,000 customers, 45 million annual transactions and 540 staff.
Certainly not Mike and Mike, who recently celebrated the 10th anniversary of SiteMinder, which now has offices through Australia, Asia, Europe and North America.
This year the company will process transactions worth more than $25 billion.
“I don’t think were looking that far forward to be honest,” says Mike Ford, the public face of SiteMinder while Mike Rogers quietly and efficiently leads technology development, bedrock of the company’s success.
The inspiration came from the sub-par performance of the archaic product distribution systems that dominated in the mid-2000s.
They were grass-growing slow and the process completely manual – when a room sold inventory across all OTAs had to be updated by hand.
“It was crazy and meant we could only manage a maximum of three sales channels.”
So the solution was to build an automated two-way system where inventory could be automatically be updated across multiple channels including OTAs and Global Distribution Systems.
The partners also saw a pricing opportunity by charging a flat monthly fee rather than one based on turnover, then the industry standard.
Success was virtually immediate.
“Our first customer was the YHA in Collaroy, the second was the Observatory Port Macquarie” and it took off from there, says Mike.
Those first two clients are typical of SiteMinder’s customer base, which is 75% independent operators, although it has also signed up numerous major brands including Accor, Quest, Mantra, Toga, Staywell, Minor, Pan Pacific, Hyatt and Rydges.
Growth has been rapid throughout and completely organic, no acquisitions.
Key to SiteMinder’s success has been management’s strategic choice of investors which US-based Technology Crossover Ventures and Bailador Technology Investments in Sydney.
This has delivered an astute and extremely well connected board that includes former Expedia CEO Erik Blatchford and ex-CEO of Fairfax Media David Kirk among others.
Ten years in, Mike says growth remain very strong with Europe – a fragmented market dominated by independent hotels – perfect for the SiteMinder model.
“The bulk of our revenue is now coming from outside the Pacific.
“Europe is the biggest for sure and is still growing the fastest.”
It’s for this reason SiteMinder has opened a new European headquarters in Galway, Ireland, where it’s in the process of adding up to 100 new staff.
Meanwhile, North America is starting to kick after an extended period of brand building.
“We’ve got traction now and are starting to land some good properties.”
Asia is as you would expect powering ahead with Thailand and Indonesia doing particularly well.
Mike sees enormous scope for growth which in terms of customer acquisition is running 40% ahead of last year.
Clearly there is tremendous demand and much untapped potential for SiteMinder’s products, which have a clear focus.
There are no plans to move beyond its product strengths and expand into other related areas such as property management systems.
“Our positioning is quite clear. We are a guest acquisition platform and we want to focus on that,” Mike says.
“We don’t want to have anything to do with the operational side of things and will leave the full stack stuff to the Sabre’s of the world.”
Immediate goals are to keep the momentum rolling. If you do that, as experience shows, everything else will follow. And Mike isn’t much good at predictions anyway.