PicoBlog

At the time of publication: Series B | Total funding raised: 37.7mn USD

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Resorts and Hotels are a multi-hundred billion dollar industry in the United States. For resorts, leisure visits will be a sizable portion of the business. Resorts attract customers with their sprawling, well-maintained locations and on-site amenities and they typically cost millions of dollars to build and hence will cost customers a pretty penny. 

As we know, resorts typically are a ‘bundle’. The price includes room lodging, breakfast and other dining and amenities like pool, fitness centers, spa etc. 

What if customers want to pay only for certain parts of the bundle and not the entire bundle? For example, what if I want to use only the pool and spa without wanting to stay at the resort overnight?

ResortPass is a startup that unbundles the resort experience and provides access to certain experiences in a resort hence making the experience more affordable compared to paying for the full package. 

For example, take a resort in Miami - the Savoy Hotel and Beach Club resort. The minimum price for an overnight stay at the resort comes to 278$ (inclusive of taxes) on booking.com. 

The resort lists its amenities as follows:

ResortPass meanwhile unbundles this and offers different rate cards for different experiences. 

A Beach Pass for two adults cost $116 inclusive of fees and taxes - a much more affordable proposition than booking the entire resort. 

The customer ‘use case’ here is ‘daycations’ - spending a single day out with your friends or family - maybe during weekends or occasions. When spending only a single day at the resort, you will prioritize access to certain experiences over the full bundled experience. 

While regular stays at these resorts have a typical check-in time around noon time, bookings via ResortPass gives you access from 9am onwards until 6pm to 8pm in the evening. A family can typically start their drive early in the morning from a nearby city and spend the whole day at the resort and then drive back home afterwards - i.e. a typical ‘daycation’. ResortPass typically allows cancellations till the night before the experience. 

The customer value proposition is clear - access attractive resorts and amenities at an attractive price. What about the value proposition for resorts? The key business insight is these amenities are underutilized. ResortPass is attractive for resorts because it unlocks access to ‘underutilized assets’ - resort amenities are capex heavy and this is an opportunity to generate incremental revenue from these assets. Any incremental revenue on these underutilized amenities comes with a very good margin. 

Till November of last year, ResortPass claims to have handled about 1.6mn guests in its lifetime. ResortPass seems to have resort and hotel partners across most states in the US and also seems to be expanding in international locations like Bahamas, Mexico, Canada and Hong Kong. 

Online Travel bookings are generally a competitive space because of the commodity nature of the product - customers generally would compare the price and book. ResortPass ‘escapes’ this competition by unlocking ‘unique’ selection - these types of unbundled resort bookings would not be accessible on any other platform. I imagine one of the OTA giants - booking.com or Expedia may in the future want to buy out ResortPass at an attractive price. 

The revenue model seems to be charging customers a ‘platform fee’ while it is free for resorts to join. Resorts and Hotels meanwhile can choose to buy booking software from ResortPass that helps their own guests to book unbundled amenities. 

‘Daycations’ will be far more frequent than elaborate vacations and hence the purchase frequency per customer on ResortPass can be high. The company can  potentially have a loyalty or membership program that can increase booking frequency for customers. 

ResortPass has very good potential - it has unlocked additional high-margin revenue opportunities for resorts and hotels; it has unlocked access to customers at a much more affordable price and it has escaped competing on price with the OTA giants by offering ‘unique selection’ of experiences.

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