Booking hotel accommodations can become a nightmare in cities hosting in-demand events like Art Basel, SXSW, Coachella, and Sundance, resulting in exorbitant rates that put off travelers. Hotels have rates that do not allow them to have maximum occupancy, creating a huge inefficiency between demand and rate optimization. Hoken is a primary and secondary marketplace for prepaid hotel reservations centered around on-demand events that seeks to solve this problem. Consumers can buy reservations well in advance of events and if they are not able to use the reservation, they can sell it through Hoken. Hotels are able to optimize their revenue collection by selling more rooms at the optimum price with real-time visibility into pricing insights. Hotels are not charged fees, commissions or distribution costs for working with Hoken and providers are able to share in any revenue earned from secondary transactions, which represents incremental revenue. Retail consumers and sellers are charged a nominal fee for any secondary sales on the platform. Currently, only reservations secured on the platform are eligible for secondary sales. Since launching earlier this month, Hoeken has established a number of partnerships with independent and leading housing groups.
AlleyWatch caught up with Hoken CEO and co-founder Tarek Douk to learn more about the business, the company’s strategic plans, the latest round of funding, and more…
Who were your investors and how much money did you raise?
Seed, $9M, by Streamlined Leadership, Venture Partners, and Individual Investors.
Tell us about the product or service that Hoken provides.
Hoken provides the ability to buy and sell prepaid hotel reservations during in-demand events and high-compression periods.
What inspired the start of Hoken?
The pandemic made it clear that hotel bookers need more flexibility while hoteliers need non-cancelable revenue guarantees to meet their obligations. Hoken solves both friction points while eliminating hefty delivery fees.
How is Hawken different?
Hoken allows for trading and speculation in hotel bookings, creating a new asset class and bringing optionality and liquidity to the market; Hoken is also a zero-commission distribution platform for hotels and allows hotels to forward-sell/monetize on prepaid hotel bookings issued by them.
Which market does Hoken target and how big is it?
Hoken targets attendees of major events across the US, such as Art Basel, Coachella, SXSW; Hospitality is a $550B global market and growing.
What is your business model?
We charge a transaction fee to the buyer and seller when a room is resold/traded.
How are you preparing for a possible economic downturn?
We have raised significant capital and are focused on tightly controlling our burn rate to provide a long runway. The economic downturn will also provide opportunities to attract the highest caliber talent to the market.
How was the funding process?
We raised venture capital in Q1’22 before the market dislocation and then debt capital in Q3’22 to navigate volatile markets and ensure adequate liquidity for product market fit.
What were the biggest challenges you faced while raising capital?
Hoeken was oversubscribed by a significant margin. Our biggest challenge was reducing capital or filling tickets at lower allocations to make room for value-added investors.
What factors about your business prompted your investors to write you checks?
They all engage with our concept because they understand that compression events often cause availability constraints in markets and that today’s distribution solutions are expensive, inflexible and inefficient. Most have been around for 25 years and have focused on commoditizing the hotel experience.
What achievements are you planning to achieve in the next six months?
We aim to drive product-market fit, significantly expand our assortment of events, sign additional meaningful hotel partnership deals and accept off-platform bookings for resale.
What advice can you give to companies in New York that don’t have a fresh injection of capital in the bank?
Keep hustling There is still plenty of private capital available for good concepts, especially with public market dislocations and liquidity premiums turning into discounts. Don’t be afraid to branch out and surround yourself with great mentors who can guide you on your journey.
Where do you see the company going in the near term?
We are working on validating our concept and are looking at Series A funding in the next 6 to 12 months to help us scale.
Which is your favorite outdoor dining restaurant in NYC?
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