Hotel Review Site Oyster.com Gets a Boost from Travel Channel Deal

5/5/11Follow @arleneweintraub

When New York startup Oyster.com sealed a $7.5 million deal with the Travel Channel on April 25, the New York press focused almost exclusively on what the deal would mean for the TV channel, which is owned by media giant Scripps. No doubt Oyster—which posts in-depth reviews of boutique hotels and offers online booking services—will give Travel Channel a much bigger presence on the Web than it currently has.

But what will the deal mean for Oyster?

The site’s co-founder and CEO, Elie Seidman was moving his company’s offices in the days following the funding announcement, but he was none too happy to take a break to answer that question. Oyster, after all, is only two years old and barely known in the crowded space of online travel sites. Thus the Travel Channel deal, he says, marks a huge milestone. “We share a vision of what should happen online in travel,” Seidman says. “This deal will allow us to do more of the innovative things we want to do.”

The Scripps investment was part of a $10 million Series B funding for Oyster, which included a contribution from flagship investor Bain Capital Ventures. Seidman says the company is using the funding to develop a whole new set of travel tools—the first of which should be rolled out by the end of May. The first collaboration with the Travel Channel will debut “in the June/July timeframe,” he says.

Not bad for a site that’s so young it has yet to establish a profit model. Oyster.com takes in some revenues from advertising, hotel bookings, and click-throughs from its site to other travel sites, Seidman says, though the company doesn’t disclose specifics. He believes the fresh round of funding will give him more leeway to work out the best business model for the company going forward. “We can defer the focus on how to monetize the site and instead figure out how to attract more users to it,” he says.

Seidman, a career entrepreneur, conceived the idea for Oyster while trying to find a nice hotel in Hong Kong. “The process of figuring out where to stay is complicated,” he says. Picking a high-end hotel from afar is particularly risky, he points out, because unlike other pricey items like jewelry or cars, you can’t easily cancel your purchase if you don’t like it. And most online hotel reviews are written by everyday travelers rather than professional reviewers, so you don’t necessarily get the whole story, Seidman says.

So Seidman teamed up with his brother, Eytan, and fellow entrepreneur Ariel Charytan to start a site dedicated to reviewing boutique hotels. In the early days, they hired mostly freelance reporters and paid them to go undercover as hotel guests. The writers produced detailed reviews, which were posted on Oyster.com along with photos the reviewers took. The site expanded and is now covering hotels in 10 American cities, as well as Aruba, Costa Rica, the Bahamas, and the Dominican Republic.

Oyster plans to add to its stable of destinations, Seidman says. “The number-one thing we hear from customers is ‘Why don’t you have Cabo?’ or ‘Why don’t you have Destination X?’” he says. In order to increase the number of hotels reviewed on the site, Oyster has become more efficient. Its reviewers no longer stay overnight and undercover at every hotel; instead they visit several hotels on one outing and hang out for a few hours at each one, mostly while being completely up-front with hotel management about who they are and what they’re there to do.

Oyster.com editor Kelsey Blodget says the evolution of the editorial model was necessary. “We found when we went undercover that we couldn’t get as many photos as we wanted, and we could only photograph one room type,” she says. Plus it was often … Next Page »

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