Small businesses and startups often don't have a dedicated travel desk, forcing owners and founders to rely on human assistants or cumbersome, time-consuming travel apps.
Michael Gurman, a former senior vice president of consumer products at Expedia, is betting on AI to fill that gap. His company, Otto, came out of stealth on Thursday and plans to release an alpha version of its platform to select participants in the U.S. in September. The service is designed to speed up flight and hotel bookings through natural-language queries.
Otto raised $6 million in a seed round led by Madrona Ventures with participation from Direct Travel. Angel investors in the round include former C-level executives from service companies such as Expedia, Ortbiz, Uber and Farecast.
The startup plans to use the $6 million in funding to develop the product and hire engineers, which should keep Otto afloat for about two years.
Gurman told TechCrunch that while companies like TravelPerk and Concur focus on large enterprises, Otto is looking to serve customers who don't have access to services.
“Think of Otto as a luxury travel agent or executive assistant that remembers your preferences, like hotel and flight choices, as well as other small details, like whether you want to stay within 10 minutes of your meeting point,” Gulman said.
This means users won't have to re-enter their settings every time they use the service, he noted, nor will they have to switch between a travel site and a service like Google Maps.
Gulman added that Otto will automatically look for changes to reservations or schedules, for example presenting alternative hotel options nearby if your preferred hotel is fully booked.
If for any reason the bot can't complete the booking, it hands over to a human Direct Travel agent and picks up where it left off, Gallman said, though this is likely rare, and it's hard to gauge how often it happens without more real-world testing.
Otto's seed round was led by Steve Shin, a managing director at Madrona and interim CEO at travel technology company Spot Nana. The Concur founder also bought Direct Travel (another investor in the round) in April with other investors. Shin is chairman of Direct Travel's board and will hold a similar role on Otto's board.
In an interview with TechCrunch, Singh said he believes Otto has a huge opportunity to capture the travel market.
“The reason a lot of business travel goes unmanaged is because services like Concur and other travel management companies are too expensive for small businesses. Typically, small business owners hire an executive assistant to help them with business travel. That's where Otto excels. Otto acts as your own personal executive assistant or travel agent,” he said.
Otto leverages its network of investors and advisors and integrates with services like Direct Travel and Spotnana to source optimal flight and trip data and facilitate customized booking queries.
Gurman said that if you want a hotel with a rooftop bar, for example, you won't find that as a filter on Expedia or Booking.com. He said Otto leverages a variety of hotel data providers and airline schedules databases to give users even greater customization.
The company is currently using its own data to fine-tune its off-the-shelf AI models, and Gurman noted that the cost of using these models will be much lower than what the company makes in affiliate revenue per booking.
Otto plans to have the bot record transactions, anonymize travel IDs, and analyze data to check for illusions and errors, and he stressed that the number of illusions should be low because the company will use different agents and models for each task.
Gurman said the alpha release will allow the company to hone its product, with the goal of releasing a beta version by the end of the year to open it up to a wider audience. He plans to make Otto more widely available in early 2025.
Singh added that in the future, Otto will be able to offer a highly personalized service: Users could say, “Book travel for a meeting next week,” and the tool would plan the trip based on their past data and preferences.