Pace raises £2.5m seed to automate hotel pricing in line with real-time demand
Founded in 2016, the machine learning start-up is used by the likes of Teleport Hotel, Star Lodge Hotel and The Emblem Hotel to maximise occupancy
Pace, a London-based start-up that helps major hotels maximise revenues and occupancy via use of machine learning, has raised £2.5m of seed captial.
Primarily backed by InterGlobe, the funding round also included participation from Seedcamp, Speedinvest and Amadeus Capital Partners.
Founded in London in 2016 by Jens Munch, John-Paul Clarke and Jason Pinto, Pace helps hotels to fully automate their price lists, so they can respond to demand and price sensitivity and attempt to sell every room at the optimum price.
Describing existing revenue management systems as “costly” with large amounts of historic booking data and a long set-up time, Pace says that many independent chains still rely on manual pricing, which is a “slow, complicated, and ineffective process.”
In response to this challenge, Pace's machine learning tech fully automates pricing decisions within 24 hours of integrating with a hotel’s property management system – a process it says helps hotels increase revenues by over 10% on average.
Currently targeting boutique and independent hotels, the company is working in closed beta with 20 properties across five markets, including innovative brands such as Prague’s Emblem Hotel and the Teleport Hotels in Amsterdam and Hague.
A long-running challenge for the hotel industry, its suggested that during ‘low season' average occupancy can fall as low as 62% in many markets, while at other times, demand can far exceed hotel capacity.
This imbalance in supply and demand costs the industry up to $100bn every year, as inventory is wasted and hotels fail to get the best price for their rooms.
Jens Munch, CEO and co-founder of Pace, said:
“Static and inefficient pricing has held hotels back for too long.
“Drawing on research from finance and aerospace, we want to raise the bar for revenue management and help hotels sell every room at the optimum price.
“We’re excited to announce this investment, which lets us expand our science and engineering team and give hotels the solution they deserve.”
Carlos Espinal, managing partner of Seedcamp, said:
“Waste in any industry is a bad thing, particularly in the travel industry where it involves many services that are interdependent and where customers end up footing the bill for poorly optimized travel and hospitality options.
“By backing Pace, we hope that the industry will have a new tool to take a step in the right direction and reduce the friction of over/underbooking and the negative impact it has to us all.”