Pruvo is an online tool which promise to deliver cheaper hotel rates than already booked by travellers (if any available of course). It is simple, they propose the same hotel, the same type of room at a cheaper price.
So, today I am taking my time to analyse what they do and share it. In fact, Pruvo is an start-up presenting a real innovation to the market.
It is in fact, different from other online booking platforms or price comparators for hotel reservations. I mean, pages like Trivago, Tripadvisors, Kayak, Booking and others.
Pruvo.net is positioned as a solution to the traveller, after booking a hotel room. Meaning, after you booked, they start searching for a better rate than yours. They affirm this is a real solution to a "hotel booking problem". Ups, ¿so do we have a hotel booking problem?.
The company was born in 2016. With Israeli-Argentine origins. This is why the launch took place at the Israeli market itself. And now they plan to expand their business to LATAM: Argentina, Chile, México, Brasil and Colombia to start with. The founder and Vice-president of business development is Doron, Navidi. And this is how his platform differs from the rest of the market services. Other platforms are offering the cheapest deal before confirming the hotel booking. Pruvo is searching prices if they get discounted and after being booked. This application is using sophisticated algorithms to track hundreds of hotel bookings web pages to find better deals than the one you booked. This is how they notify customer so he can change his current booking to the new one at a better rate than before.
Pruvo team declares that 40% of users booking hotel rooms via a reservation platform, ends to find out a better deal after booking. And this is always related to the same room type and same dates.
As you can guess, I have looked into how is this possible. It is simple, they offer this service only when the booking confirmed does not have cancellation booking fees. It seems that 95% of hotels in the word are offering free cancellation conditions up to 48 hours before the check-in.
My conclusions are:
1. This service is free of charge for users. Therefore the value proposition is to save time on searching deals and to save money on the booking itself.
2. Hotels will loose income as they are cancelling bookings already confirmed at higher rates to divert them to other channels at cheaper rates. So this solution is directly impacting the profit margin of the hotel room.
Therefore, what is exactly Pruvo's business model?. As they published in their web site, this is an affiliation business. Pruvo is associated to the booking platforms, therefore while diverting bookings, they are also taking commission on them. This is why they do not charge customers. Meaning, they work for the customer advantage and they get paid by supplier.
I believe that it is great for customers to get advantages and good services in order to better purchase their travel. And I also confirm myself here about the importance of a correct handling of our hotel reservation channels and the relevance of pricing management at hotels. Hoteliers do have now another good reason to improve their online direct sales and to depend less on intermediaries. Don't you think so?.
Currently hotels do have to manage channels and collaborate with OTAs which drives new business to us. On the top, here we have new players who seems to have an audit rol on the quality of our revenue management.
I was reading their statement on the newspaper La Nación de Paraguay, where they declared: "We consider ourselves as the Robin Hood of the hotel industry, because we avoid clients to pay more for the hotel booking. We return their money back once they have already reserved". So I leave it here for your thoughts...
All this is taking me to conclude that we have to do our homework at hotels. If done, Pruvo may not find better rates than the ones already booked by our customers. This must be our goal. The ball is in our court...