Small businesses and startups often don’t have their own travel desks, which means that their executives and founders usually have to rely on human assistants or inefficient travel applications.
Michael Gulmann, Expedia’s former SVP of consumer product, is turning to AI to solve this issue. His company, Otto, was announced on Thursday, revealing plans to release an alpha version of the platform to a select group of U.S. users in September. The platform aims to simplify the process of booking flights and hotels using natural language.
Otto has secured $6 million in seed funding led by Madrona Ventures, with contributions from Direct Travel. The round also saw investment from angel investors who are former C-suite executives at companies such as Expedia, Ortbiz, Uber, and Farecast.
The startup plans to use the $6 million for product development and to bring on more engineering talent, providing Otto with a financial runway of two years.
Gulmann shared insights with TechCrunch, explaining that while major services such as TravelPerk and Concur target large corporations, Otto aims to cater to clients who otherwise have limited access to these types of services.
“Imagine Otto as a sophisticated travel consultant or personal assistant who remembers your travel preferences, including your favored hotels and airline options. It even remembers detailed preferences like if you prefer staying close to your meeting locations,” said Gulmann.
He highlighted that this functionality eliminates the need for users to repeatedly input their preferences each time they access the service. Furthermore, there’s no need to switch between different travel platforms and tools like Google Maps.
Additionally, Gulmann mentioned that Otto proactively monitors for any changes in travel plans or availabilities. For example, if your chosen hotel is unavailable, Otto will suggest an alternative nearby option.
If the automated system encounters any issues during the booking process, it delegates the task to a human agent from Direct Travel, who then continues from where the system left off. According to Gulmann, disruptions are expected to be infrequent, although it is challenging to predict their occurrence without further practical application.
Steve Singh, Managing Director at Madrona and interim CEO at travel tech firm Spotnana, spearheaded the seed financing for Otto. Previously, he founded Concur and facilitated the acquisition of Direct Travel along with several other investors in April. Singh holds the position of Executive Chairman at Direct Travel and is set to hold a parallel role at Otto’s board.
In a discussion with TechCrunch, Singh expressed his optimism about Otto’s potential in the travel industry.
“A significant portion of business travel remains unmanaged because solutions like Concur can be too costly for smaller companies. Often, small business owners rely on their executive assistants for organizing travel. This is where Otto shines, serving as a personal executive assistant or travel agent,” he commented.
Otto is leveraging its extensive network of investors and advisors to access superior flight and travel data by partnering with companies like Direct Travel and Spotnana. This collaboration is aimed at supporting tailored booking requests.
Gulmann explained that Otto is uniquely addressing user needs, such as finding hotels with specific amenities like a rooftop bar, which aren’t typically searchable options on mainstream platforms like Expedia or Booking.com. This is made possible by Otto’s utilization of diverse hotel data sources and comprehensive airline schedule databases to enhance user customization.
The firm is currently refining generic AI models with proprietary data, anticipating that the eventual earnings from affiliate booking revenue will significantly surpass the operational costs of these technologies.
Moreover, Otto is setting up systems to enable its bot to handle bookings, anonymize travel IDs, and scrutinize the data to identify and correct any discrepancies or inaccuracies, ensuring reliability. By using distinct agents and models for various tasks, Otto expects to minimize occurrences of data errors.
Gulmann stated that the alpha release would allow the company to refine their product, with a target to extend access through a beta release by year-end. He aims for a broader launch of Otto in early 2025.
Singh mentioned that Otto would eventually offer a more tailored service. For instance, a user could simply request, “Book me a trip for my next week’s meeting,” and Otto would organize the trip using past data and preferences.