Homestay’s Tom Kennedy: Feeling Charitable

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The Big Read, powered by Vodafone: Tom Kennedy is one of those very Irish success stories whose track record may appear incredibly intimidating on paper but who, in conversation, is down-to-earth and unfailing friendly.

He and business partner Ray Nolan made news when they sold Hostelworld for $340 million in 2009, with Kennedy returning to the online travel industry in 2013 with a new venture, Homestay, an online platform which matches users with rooms in local homes for a more authentic and customised take on tourism and student homestays.

Alongside his work giving the travel industry a long-overdue update, Kennedy has done extensive work for charity. Starting out by convincing Croke Park to sell its empty boxes to corporates and donate the proceeds to Temple Street Hospital, the children’s hospital in Dublin which sees a shortfall of €9 million every year, he progressed to founding the Paris2Nice Charity Cycle, now in its fourth year, where cyclists cover over 700 km in six days. Paris2Nice raised €607,000 last year and this year looks to exceed it.

Kennedy recently announced another new project: Techies4TempleStreet, a charity fundraising event this October which will see Dublin tech workers take to the streets on a treasure hunt, culminating in a barbecue, networking and drinks (it’s not too late to sign your company up!).

We spoke to Kennedy about his remarkable career so far, and the future of TravelTech.

First things first: can you tell us the story behind Homestay?
Around three years ago Debbie Flynn from Irish Education Partners contacted me to discuss an idea she had. Debbie has been involved with the education business in Ireland for over twenty years. She explained how she had seen the internet affect the travel agent business, and the hostel and hotel business, but she was still placing foreign language students into houses the same way people had done for the last twenty years–by phone!

Debbie was wondering if we could create a booking engine so that she could book students into houses online. Around 90,000 foreign language students arrive in Ireland every year, staying on average three weeks. We felt that we could provide a much better experience by matching students with host families online. We could match similar interests, vegetarians could stay with vegetarians… and we could show pictures of the house, and add reviews and tips from previous guests. None of this could happen in the offline world.

So HostelWorld, your first online business, grew out of running a hostel called Avalon House on Dublin’s Aungier Street. What prompted its development?
In Avalon when we first opened, all our business came through the phone (except for travel agents, who would normally send a thermal fax!). Guests would buy books like Lonely Planet or Lets Go Europe and would phone with inquiries, and if they wanted to book we would get them to send us a postal order covering the cost of the first night. Every morning the postman would arrive with hundreds of letters containing postal orders. It was a very labour-intensive business just to make a booking.

Then when we initially got our website up and running we were inundated with emails. The website was able to answer many questions, but the one question it could not answer was around availability. Back then backpackers didn’t have smartphones or easy access to email, so there’d always be several days between replies, you had to go to the college library or internet cafe to check your mail. The booking system had to be automated but we couldn’t access a Global Distribution System like hotels use. The cost per transaction was prohibitive, and we were selling beds back then for IR £7. So it was natural for us to go online instead.

Irish TravelTech is booming at the moment. Is there some quality to the people or the ecosystem here that makes us good at it?
The ones I know well like Hostelworld, Homestay and CarTrawler all evolved from pre-existing, offline businesses. They were established before they were brought online, and subsequently grew rapidly. I think Irish people are generally very entrepreneurial, and when we see a gap in a market we go for it.

What were the biggest lessons you took from Hostelworld? Were there any major problems you had to overcome starting out?
We were lucky with Hostelworld, in that in the beginning we had no real competition. Hotels.com and Expedia concentrated on selling three-star and above hotels, as there was much higher commission to be earned. In the beginning we were the only online outlet for hostels to sell their beds. We had first mover advantage, but we had to move fast to make the most of it, which we did. One of the initial problems we had was convincing some hostel owners that it was okay to take online bookings. A lot of hostel owners liked to talk to potential guests before committing to taking them! I remember we had one guy in Tokyo who feared that English soccer hooligans would arrive at his hostel…

I think Irish people are generally very entrepreneurial, and when we see a gap in a market we go for it.

The travel industry has changed radically over the last decade, with Hostelworld and now Homestay very much part of it. Where do you see it going next?
I think there is generally just an in-built human desire to travel and explore, so I see the travel industry just going from strength to strength. I think there is going to be huge growth in the sharing economy in relation to travel. Companies that allow you to meet locals, like Homestay, Vayable, Cookening and Relayrides. You can lose half your day traveling on budget buses and staying in formulaic modular budget hotels. But those services really enrich the travel experience.

I also think travel apps are going to see continued growth. Instant booking allows for more spontaneous travel experience. For example, my best meal this year (and there have been many) was in Rome: around 15 of us were on a cycling trip. We arrived in Rome, checked into the hotel and using TripAdvisor’s Near Me Now function I found a local restaurant with great reviews. There was a grandmother and mother in the kitchen and two daughters working the floor–we had an amazing meal.

Are there overlaps between running a company and running a charity event?
Running either, one thing is for sure: you can’t do it alone. Diane Hodnett, Holly McQuillan and Robyn Esmonde make up the Techies4TempleStreet team. All the participants will enjoy it, it’s going to be a technically challenging treasure hunt, and I think the sense of competition between the various teams will be huge. And then there’s the barbecue and a few beers and the social side of things. It’ll be great to have a singular event that will bring the multinationals, the indigenous tech companies and the startups together and hopefully raise lots of money for Temple Street.

Techies4TempleStreet will take place on October 2nd. Follow them @Techies4TS.

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