Smaller companies and startups often lack their own travel agency, so managers and founders have to rely on human assistants or time-consuming and cumbersome travel apps.
Michael Gulmann, former senior vice president of consumer products at Expedia, is banking on artificial intelligence to fill that gap. His company, Otto, emerged from obscurity on Thursday and plans to release an alpha version of the platform for select U.S. participants in September. The service is designed to enable quick flight and hotel bookings using natural language queries.
Otto has raised $6 million in a seed funding round led by Madrona Ventures with participation from Direct Travel. Angel investors in the round include former C-suite executives from services such as Expedia, Ortbiz, Uber and Farecast.
The startup will use the $6 million it raised to develop products and hire engineering talent, which should give Otto a two-year term.
Gulmann told TechCrunch that companies like TravelPerk and Concur focus on large enterprises, but Otto wants to specifically serve customers who don’t have access to those services.
“Think of Otto as a high-end travel agent or executive assistant who remembers your preferences, such as your hotel and flight choices. It also remembers other nuances, such as whether you prefer to stay within 10 minutes of your meeting point,” Gulmann said.
He noted that this means users don’t have to re-enter their preferences every time they use the service, nor do they have to switch back and forth between travel websites and services like Google Maps.
Gulmann added that Otto automatically checks for changes in bookings and dates. For example, if your preferred hotel is fully booked, it offers you the option to select another hotel nearby.
In cases where the bot is unable to complete the booking for any reason, it hands the process over to a human employee at Direct Travel, who picks up where they left off. Gulmann explained that these cases are likely to be rare, although it is difficult to estimate the frequency without further real-world testing.
Steve Singh, Madrona’s managing director and interim CEO of travel technology company Spotnana, led Otto’s seed round. The executive, who also founded Concur, acquired Direct Travel (one of the investors in the round) in April along with several other investors. Singh is executive chairman at Direct Travel and will take on a similar role on Otto’s board.
Speaking to TechCrunch, Singh said he believes Otto has a great opportunity to capture a share of the market in the travel sector.
“The reason a lot of business travel is unmanaged is because services like Concur or other travel management companies are too expensive for small businesses. Typically, small business owners enlist the help of executive assistants when it comes to travel. That’s the beauty of Otto: It acts as your own executive assistant or travel agent,” he said.
Otto uses its network of investors and advisors to obtain the best flight and travel data – and integrates this with services such as Direct Travel and Spotnana – to enable individual booking requests.
Gulmann said if you’re looking for a hotel with a rooftop bar, for example, you won’t find that as a filter on Expedia or Booking.com. He said Otto uses different hotel data providers and flight schedule databases to provide users with better customization.
The company is currently working on fine-tuning off-the-shelf AI models using its own data. Gulmann noted that the cost of using these models will be far less than the revenue the company will earn per booking from affiliate revenue.
Otto plans to have the bot book transactions, anonymize travel IDs, and analyze data to check for hallucinations or errors. Otto stressed that the number of hallucinations should be low because different agents and models are used for different tasks.
Gulmann said the company plans to use the alpha version to refine its product and make it available to more people through a beta version by the end of the year. He plans to make Otto available to a wider public in early 2025.
Singh adds that in the future, Otto will be able to offer a highly personalized service. Users could then say something like “Book me a ride for my meeting next week” and the tool would plan a ride based on historical data and preferences.
