A new service makes it possible for consumers to “flip” hotel rooms. Wait, what?
Hoken Says You Can Flip Hotel Rooms
A new startup extolls the opportunity to flip hotel rooms like one might flip sought after sneakers. Hoken claims users of the service buy hotel rooms around concert dates and venues in advance and then sell those reservations for a higher cost later. Hoken makes a small fee on the transaction.
The brand markets hotels around the events and offers a limited number of participating venues. In interviews I was able to surface, it suggests Hoken is partnering with specific properties for these offerings rather than offering all properties in a market. In some cases (as seen below) Hoken offers hotel rooms where the property is otherwise listed as sold out. In other cases, it appeared as though the site might already have better prices than available elsewhere.
I intended to go through the process and make a reservation to further explore the process but for once I read the terms and conditions which gave me pause. I intended to share my experience, good or bad, with our readers as I would for any other travel purchase but I came across the following two lines in Hoken’s terms:
“iii) you will not use the Site or any third party media sites including but not limited to social media sites and apps, search engine sites and apps, and review sites and apps to disparage us, any hotel, or any other guest or user of our services; (iv) you understand that the Site will suffer down times in which you may not be able to buy, sell, or trade hotel rooms or even access your Roomfolio”
I certainly couldn’t blindly support the site or agree to not say anything but positive things about the service for our readership merely by registering. Rather, I did not proceed at that point and cannot, as such comment positively or negatively about the actual experience of buying or reselling.
What I can say, is that the market appears to be very narrow, that some of the hotel prices matched competitors or the brand’s own pricing, and that I’d like to understand more about the payout procedure and timeline. However, with onerous and broad terms, and no response from the brand, I’m left wondering.
Hype or Substance?
The brand is targeting young traders rather than travelers.
@gohoken Hustle smarter with Hoken – the world’s first hotel marketplace! #trading #sidehustle #invest #hotelroom #events ♬ original sound – Hoken
The company is listed as a financial services business on LinkedIn. According to its press releases, Hoken raised $9MM in venture-backed and individual investor capital. In an interview with AlleyWatch, the CEO, Tarek Daouk, said they could have raised more:
“Hoken was oversubscribed by a significant margin. Our biggest challenge was turning away capital or filling tickets at a lower allocation to make room for value-add investors.” – AlleyWatch
The company focuses on flashy, neon-lit social media posts for marketing that appeals to younger buyers. It invokes Mr. Beast, the billion-dollar YouTuber though I couldn’t find any evidence that Mr. Beast is an investor nor that he endorses the brand.
It lists purchasers on the website, “John just reserved [X property] but it has few followers on social media. I wonder how many sales it is actually making.
On July 22nd, I reached out to the brand and asked the following:
- Does Hoken make the bookings through their own IATA?
- How are names changed on the reservations once sold?
- Does Hoken primarily anticipate revenue through the reselling, or initial commission of the room sale?
- Are all hotels available through the platform, if not, why not?
- How many members have signed up?
- Hoken lists 95% and separately elsewhere 98% of hotels are covered in the guaranteed buyback program. Which one is correct, and which hotels are not covered?
- Why aren’t all hotels covered?
- One of the promoted tours was Madonna though at the time I saw the ad it was after she had cancelled her tour. Were/are these rooms covered?
Though someone that works for Hoken viewed my LinkedIn profile, I never received a response. Those questions remain unanswered.
I’ve been inundated with targeting for social media ads by Hoken and while the concept is interesting, I can’t determine whether or not it’s a great idea or a terrible one. I don’t entirely understand the business principle – are they selling the hotels initially and making a commission on the front of the transaction? What’s the process for changing the name on a reservation for the transaction? What are the specifics of the buyback program? Or is this just a hype machine looking for a tech valuation but without the ability to gain market position and substance that will make it a real force in the industry? It’s openly encouraging speculation, a bold position, with a promise to make it nearly risk-free (with the buyback guarantee) another bold claim, but without explaining how guaranteed that buyback really is. If there’s a lack of inventory, information, or communication, then perhaps it’s best avoided.
What do you think?