By helping independent hotels get noticed, Loreca successfully set foot in the hospitality industry
By Jim James, Host of The UnNoticed Entrepreneur.
Bart-Jan Leyts is a young entrepreneur and at 23, he has a company in the hotel and hospitality industry called Loreca.
In the new episode of The UnNoticed Entrepreneur, he talked about how he’s been overcoming the challenges of being a young entrepreneur and how he’s managed to get some 296 hotels to sign up for his AI-based hospitality revenue enhancement platform. He discussed how he was able to introduce new technology to a traditional industry and overcome a number of barriers in terms of not being noticed and not having a network.
Image from Loreca
Getting More Seen on Online Travel Platforms
Loreca is a company specialising in the hospitality industry. They built an algorithm that enhances or enforces the position of a business on an online travel agency such as Booking.com, Airbnb, Expedia, and Trip.com. They put a hotel, a bed and breakfast, and any other client higher in the ranking. They call it booking engine optimisation, like search engine optimisation (SEO) for Google.
They started it with the perspective that if a client is being found, seen, and getting booked, then it changes the whole dynamic of how revenue management for that client is done. They can ask for more money if the demand for their hotel is higher because they’re more seen, and the chances of selling a room increase. But it's a mathematical equation between all the platforms that determine it. For example, Expedia has an impact on Booking.com and Booking.com on Airbnb.
This is what their algorithm does, and it’s based on data and expected traffic. If they expect that on a Thursday night in the beautiful city of Bruges, many people will search on Booking.com to book a room for the next day, then they will maximise their position on Booking.com. It’s all automated.
At the moment, their core clients are independent hotels. And they are active in six countries; most of the roots of their clients are in Belgium, France, Germany, The Netherlands, Montenegro, and Albania.
Image from Unsplash
How Loreca Got Started
Bart-Jan started the company in 2021 between his third and last year in university and starting his Master’s studies.
His parents have a bed and breakfast in Bruges. During COVID, they were really struggling, and they weren’t having a lot of guests. That’s when he started tinkering: He was majoring in data and finance. What can he do to improve the revenue?
He was making progress, and he thought he already had something for his parents’ bed and breakfast. Then, the summer came. He wanted to earn money and go with his friends on a holiday outside Bruges.
Even though he had a very basic version of the product — it was still a lot of manual work and was nothing compared to what it is right now — he drafted an email. He found email addresses online of hotels in his neighbourhood and sent an email stating what he could do and that he was 20 (at that time) and working for $15 per hour. Then, he asked if they wanted to work with him.
Suddenly, his inbox started exploding. All these people were saying that they had problems with their digital stories and setup; for hotels, these are hyper-important.
And so, he did some extra services to raise cash flow to fund the algorithm's further development. He was just bold enough to send an email and to sometimes contact local newspapers where he could get little ads, all for free. It’s all about taking the step — not just dreaming of taking the step.
The Challenges of Being in a Traditional Industry
Based on his experience, Bart-Jan learned that the industry isn’t quite a traditional industry in how it operates. And it was a big hurdle for him and his company.
There’s this aspect of ageism where the average age of a hospitality owner is twice his age. So, from their point of view, they were young guys telling them what they needed to change or what was wrong. And it wasn’t always a fun conversation to be harsh and tell them that the way they’re working is not optimal. For instance, looking at the numbers of their then prospects and now clients, they have a loan of $25,000, but they’re only doing $20,000 in revenue.
Sometimes, it will be a tense discussion in the beginning, but as he learned, they just have to prove themselves. They just have to prove that they can do it, make it easier for them, and enhance their processes.
Whenever they see a new client, they’ll first check their technical setup (a hotel works with a backend). If it’s not working optimally, they can't motivate them to bring about 20% more people into the hotel because the operational systems will fail.
In his industry, it’s all about proving themselves and making the things that they talked about come true.
Getting Loreca Noticed
Screengrab from Loreca
The thing about the hotel and hospitality industry is it’s a lot of word of mouth: Hotels are very familiar with each other.
Regarding brand building, Loreca had a lot of articles, speaking gigs, and podcasts. Bart-Jan loves to speak in front of crowds. Also, because they are, in a way, disrupting the way revenue management is done for hotels for years, it’s their stage to prove how they can improve that traditional way. And that is where they got a lot of brand awareness.
Collaborations are also important for them. They have many collaborations with many partners — from local governments to other service providers. And they are growing on each other's backs. If one grows, the other grows with them.
He also noticed that whenever a local government endorsed them, they were able to build the trust they needed in the early phases. Even if a business has one to three clients, but the city has endorsed it, people will think it’s not just snake oil.
To get noticed by the government when he’s a young entrepreneur and has just come out of university, he simply emailed asking if he could meet with them. In the beginning, he had to wait a long time for those meetings. Then, when everything started going, the meetings were coming more frequently.
Some of them also wanted a test case. For instance, a government will give them one hotel, and if it works, they will endorse them. In that case, everyone puts 100% of their effort into that one hotel. Fortunately, it has worked for them.
Making Loreca’s Clients Relevant via Booking Engine Optimisation
Whenever someone wants to book on Booking.com or Expedia, the way they see the results are, of course, not random. A lot of parameters influence them, and these parameters differ from region to region and city to city.
And this is what Loreca’s algorithm does: Their algorithm automatically searches for relevant parameters and applies them with respect to its strategy of putting a certain hotel on the top.
Some parameters are customer-based (e.g., having a nice location or a 9+ review). These are things that Loreca can’t influence. If a hotel is in the middle of nowhere, they can’t put it on top of Bruges. It’s technically impossible.
However, what they can do is, based on the data, they can see how people searching for Bruges, for example, are people who prefer sustainable properties. Then their algorithm will try to enhance the performance-and-sustainable search fuse. They also highlight the parameter of a property’s distance from the centre (e.g., if it's three or five kilometres from the centre). It's all about being seen and booked.
In some situations, some hotels need people to stay for a minimum of two nights; otherwise, their cleaning team won’t cope with it on an operational level. In this case, they will have to really play with visibility, which is about being seen in two-night markets and even in one-night markets because everything is connected.
Screengrab from Loreca
Loreca is not a drag-and-drop kind of tool. They’re an algorithm. Meaning, they are customised for each of their hotel clients. They firmly believe that every hotel and every bed and breakfast is unique. They have different strengths, weaknesses, operational hurdles, and opportunities.
This is why they take them case by case. Their sales team has a really personal approach with all of them because they need to understand their business 100% before they do something. If they only understand it 50% and try to put it at maximum occupancy, it won't benefit the bottom line. It's all about getting the whole process done.
Loreca is exclusively working on a geographical basis because they can’t put everyone on top of Booking.com or Airbnb. And so, they limit their customers based on geography. They need to scale based on a geographical level.
On Being a Young Entrepreneur
As a young entrepreneur, Bart-Jan is always searching for different groups and communities where he can just put his ears down or let someone hear his voice. Though he actively does that, he still considers young entrepreneurship a bit of a disadvantage because their peer group is way different from entrepreneurs who are a bit older.
In their peer group, they’re still studying or starting their first job. They're in a different phase of their lives.
Hence, finding people who relate to young entrepreneurs’ struggles is very hard. This is why he always encourages other people who are in similar positions to actively search these groups and forums where they can find some peers they can connect to — because these are the people who are struggling with the same decisions.
Image from Loreca
In terms of getting their brand out there, Loreca is getting into the media and the press. Right now, they’re still not yet using new tools like TikTok. They have a new marketing person on their team, and they are planning to do it, but they are still checking because their ideal customer is not someone who is waking up and checking TikTok. It's the person who wakes up and checks their hotel.
Just Be Bold
To get noticed, what always helped Bart-Jan was taking a day in two or three weeks to be bold. He advises entrepreneurs just to write an email to a local press agency. Write an email to start endorsements. Write an email to be referred on someone's LinkedIn.
Just write it and try. If they don't answer, it doesn’t matter because it just costs five minutes of an entrepreneur’s life. And they didn't even lose an opportunity. They can get a “no,” but a “yes” is something they can also get.
He also learned that people could be very welcoming of young entrepreneurs because they see themselves in them in their early days. They see some of the struggles they’ve been; therefore, they will always want to help, mentor, and endorse.
To find out more about Loreca, a tool that’s an amazingly powerful addition to any hotel's revenue generation, visit www.loreca.be. Bart-Jan and his company are also on LinkedIn.
The UnNoticed Entrepreneur podcast is sponsored by Prowly, the all-in-one software for leveraging PR activities. Boost the media relations game for your business - get more coverage while saving time and money on everyday tasks.
This article is based on a transcript from my podcast The UnNoticed Entrepreneur, you can listen here.
