Interview with Michael Stacy, CEO of Groople

Our interview this morning is with Michael Stacy, CEO of Groople, a Centennial, Colorado-based firm that is developing a new concept in the online travel reservations market. We caught up with Michael last week to understand more about Groople, how it fits into the market, itís value proposition, and whereís itís heading.

Techrockies: Explain to me how Groople fits into the travel reservations market?

MS: Groople is the group travel space. What that means is any reservation online of 5 or more people. The reason why we are going after this market is because there isnít an automated way to do that today, online or in the offline world. For example, existing travel reservation systems such as Galileo, Worldspan, and SABRE are built in a way that can only handle four people at a time.

Techrockies: How do you get around that limitation?

MS: We have our own inventory management solution for groups. Right now, our focus has been on hotels. In those hotels, we have a specific agreement with those hotels to load group rate and availability information into our inventory management solution, with no numeric constraints.

Techrockies: So you have your own inventory of rooms?

MS: These could be elsewhere, but not in an automated fashion. Right now, with group reservations a travel agent still has to call the hotel. Everything for us is done online.

Techrockies: So how are you finding traction with hotels?

MS: Fantastic. We have several thousand contracts with hotels, but anytime that we walk into a particular property or at the chain level we have very good receptivity, with them willing to do business with us. Itís been fantastic.

Techrockies: Do you also do reservations for other areas?

MS: The next area we went into was cruises, which we launched in August. The next area after that, in the latter part of this year, will be group air.

Techrockies: So it sounds like the major competition for you right now is travel agents?

MS: Itís really the consumer who is picking up the phone and calling a trav el agent. Our job is to bring this online. We are really solving two types of problems Ė the consumer problem, where they donít have access or insight into available inventory--you can come on to our site where we have 60,000 hotel properties, pricing and availability. If they call a travel agent, they are not going to have access to all of that information from a group perspective. They donít have the right automated toolsets. They have to have to call the physical properties.

Techrockies: Are your listings primarily in the US, or globally?

MS: Weíre primarily in the U.S., and by the latter part of the second quarter weíll have substantial inventory in Europe. We also have listings in Mexico and the Carribean.

Techrockies: I know you were most recently at CheapTickets Ė why did you decide to join Groople?

MS: Yes, I was president of CheapTickets. The reason I joined is that the market opportunity is just tremendous. Just look at size of our market. The overall travel market is $518 billion between us and Europe, not even taking into account China or other parts of world. $121 Billion of that is going to be online. Because there hasnít been any formal studies on the group market, we donít have the market size, but talking to several hundred suppliers, they tell us over 30% of their business is group business (defined as 5 or more reservations). We think thereís a $40 billion market not online yet. When you look at the size of the market the opportunity is tremendous.

What I really like to do is join startups, or turning something around. CheapTickets was a turnaround. In 2003 they lost 60 million dollars. I arrived in November of 2003, and by 2004 we were profitable. I left in June of 2005 when our parent Cendant purchased Orbitz, and they moved the operations from Denver to Chicago. That was a move that my wife and I were not willing to take on, because we love Denver. Itís very hard to leave.

Techrockies: How is Groople backed Ė I see you received VC rounds in 2003 and 2004?

MS: Yes, that funding was raised prior to my arrival. Our investors are Flywheel, Vista Ventures and Fatty Tuna Ė which is an investment vehicle for one of our board members. We are out now raising a Series C.

Techrockies: Do you have specific plans for that Series C?

MS: We plan to make investments in technology, and in hiring in some of our key areas.

Techrockies: Thanks for the interview!


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