There may no longer be an excuse for stiffing hotel staff who ferry bags to guest rooms.
TipYo, an Alexandria, Va.-based payments startup, wants to simplify the tipping process through a method that’s as simple as using Venmo to pay a friend. Customers download an app to pay staff members, including housekeepers, bellhops, valets and concierges.
TipYo founder Brian Walsh said he set up the company 18 months after he noticed that methods of tipping hotel staff hadn’t evolved in generations.
“I was traveling quite a bit and became increasingly frustrated by people not having cash to tip hospitality workers,” Walsh said. “That’s really where it started.”
The company is entirely self-funded, and TipYo is currently live at two locations that are part of the Provenance Hotels chain: Hotel Murano in Tacoma, Wash., and Hotel deLuxe in Portland, Ore. Walsh said the remaining 12 hotels in the network will offer TipYo later this year.
For now, TipYo is available through a stand-alone app, but Walsh said the technology can be embedded within hotel apps. While it may be as easy as using Venmo to tip a staff member, unlike that popular peer-to-peer payments service, TipYo has designed the tool to make transactions — as well as the names of recipient employees — private.
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“We’ve gone to great lengths to keep it anonymous,” Walsh said. “We are not Venmo and by design don’t want to be, because of privacy issues and how the money flow has to work.”
He explained that when a customer sends a tip through the TipYo app, it automatically connects to the hotel back-end software, which tags the correct employee with the room number and the guest in question. The tips then show up on employee paychecks because the platform is synced with payroll.
TipYo monetizes the product through subscription fees hotels pay to offer it to customers; he didn’t say how much. Since the service rolled out at Hotel Murano in November, around 100 guests have tipped using the platform. Walsh is betting that ease of use will result in higher-value tips; he said the average tip size of customers using the platform is $6, and some customers are using it multiple times per day.
While TipYo may represent a new phase of consumer payment behavior, like other digital payment methods, it’s safe to say adoption may take time. While Walsh acknowledges that having TipYo in most U.S. hotels is “pie in the sky,” he said there’s a huge addressable market, which extends not only to hotels, but other areas, such as country clubs and valet services.
“We certainly see other opportunities, and the primary hospitality space other than hotel that we expect to have an impact on is in the valet parking space,” noted Walsh. “We’re really coming into play where there’s not a point-of-sale opportunity, and that’s pretty considerable.”
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