The future of travel is low-cost, we all know that. But for one Israeli startup, the future of travel is lower-cost.
Pruvo, set up 1.5 years ago, is a low-cost hotel booking company using an algorithm that claims to guarantee cheaper outcomes than such major market players as Trivago, Booking and Travelocity. The key to Pruvo’s success, the founders say, is a unique algorithm that identifies price drops, one they someday intend to take beyond the travel market.
Pruvo’s birth was almost accidental. Current CEO Itai Marcipar was booking hotels for a family trip. Returning to a previous booking to upgrade, he realized the price had dropped significantly, and that rebooking in that moment would save him big money. This discovery led to the birth of Pruvo, said VP of Business Development Doron Nadivi.
Marcipar contacted engineer Regev Brody, his friend and fellow Technion alumnus, and commissioned him to develop software capable of replicating his experience on a larger scale. Brody is currently Pruvo’s chief technological officer.
“Pruvo only enters the game after you’ve made a reservation,” said Nadivi in a phone interview, speaking from Costa Rica, where he is based. Nadivi worked as a travel budget expert and author before joining Pruvo. He explained that statistics show that 40 percent of hotel reservations experience price drops — including drops of up to 67% — after the reservations are made.
Pruvo makes sure that the customer knows when the price drop occurs. There are two basic ways in which customers use the service, which is free. First of all, reservations must always be made with the free cancellation option. If the customer is browsing with Chrome, Pruvo offers an extension which automatically detects when a reservation is made; if not they can forward the confirmation email to email@example.com. From that point on, the reservation is monitored automatically — across “hundreds of different sites and suppliers” according to Pruvo’s website — and the customer is informed when there is a price drop, allowing them to rebook and save money.
Launched in May 2016 with an initial focus on the Israeli travel market, Pruvo is now expanding internationally, focusing largely on Latin America. In its first year, it claimed to have saved its customers $117,000 , and currently claims to have saved customers more than $209,000 to date, with an average growth rate of users and orders of 34% per month. On September 11, 2017, Pruvo launched a campaign on Israeli crowdfunding platform Exit Valley, reaching its minimum funding goal of $100,000 in nine days.
“We expected to grow; we just didn’t expect to grow this fast,” said Nadivi.
The rapid growth and international expansion of Pruvo is due to the “wow effect,” said Nadivi, referring to the moment when customers realize how simple it is to save on booking.
“Our product is very, very viral,” he said. “All the [online] reviews are 5 out of 5.”
While Pruvo’s birth may almost seem like a fluke, Nadivi said that stories like this are typical of Israel’s startup scene, where everyday problems are translated into innovative business ideas.
“Most startups are born out of a problem,” he said.
Nadivi said that Pruvo is looking to expand in two main ways. First by moving into new markets geographically, trying to “capture the market around the world and then focus on the US.” There is also interest in adapting Pruvo’s algorithm and basic concept to other markets that experience price fluctuation, like car rentals and concert tickets.
“We want to do to these industries what low-cost airlines have done to flying,” he said.