Lighthouse

Lighthouse has hit the headlines in recent months through a growth investment round of $370 million announced in November 2024 as well as a number of acquisitions including HQ revenue and Stardekk. 

Sean Fitzpatrick became CEO of Lighthouse (formerly OTA Insight) in mid-2018. Prior to that he was chief operating officer and oversaw product strategy at HotSchedules.

Lighthouse has grown and evolved since its launch in 2012 as OTA Insight. 

The company provides market intelligence data to hotels to help them get a better view of the dynamics of their own individual markets and ultimately, boost revenue. Milestones in the past year include Series C funding of $370 million as well as the acquisitions of HQ revenue and Stardekk.

CEO Sean Fitzpatrick, who took up the role in 2018, spoke to PhocusWire about the recent funding, the potential for further acquisitions and the wider opportunity for growth.

The interview has been edited for clarity and brevity.

What was the environment like for your recent funding round?

Back in ’21 we had early stage venture capitalists on our board, then we brought Spectrum on board and they brought a different level of expertise. Role the clock forward three years and we felt it was time to strengthen the investor board again. From beginning to end it took six to seven months in terms of preparation. We were targeting those later stage private equity firms that fit with the culture of Lighthouse and work well with the investors we have currently. We were not just looking for a check, you have to be quite targeted in terms of the investors that you’re speaking to.

Back in ’21 we probably had a short list of six or seven funds that were very interested. This time, probably had 15 to 20 funds, which was a little bit surprising because you never fully know until you bring your story to the to the market and present the opportunity. It’s incredibly flattering in terms of what having that level of interest indicates and our mission and what we’re trying to do.

More generally, for hospitality technology, it’s positive because as a vertical, we really do need investment. Investors at the early stage can see exit opportunities with the next stage investors etc. So, the lifecycle of investing is important. I wouldn’t quite say we were treading brand new territory, but certainly for us, it was a new experience.

Why do you think that was? 

I think we may have presented a unique opportunity to scale. When you’re well north of $100 million in revenue, you’re in a slightly different category to some of the earlier stage startups and scale ups. And so if you think about the different stages and sort of the investor lifecycle, you have angel and seed, then you have early stage venture capital, then you have growth venture capital, then growth private equity and then private equity. Now, as you move through one of those phases, you have to have proof points as a business and so being at a certain scale, being profitable and having a really solid plan is all fundamental to being able to attract what I would consider to be marquee investors.

If you just look at the maturity of the whole industry in the past 10 years or so, there’s just been an acceleration in terms of the adoption of technology. Then, if you look more broadly, obviously, you’ve got tailwinds like AI that are further accelerating adoption in technology. When you put it all together, the total addressable market and the sheer global scale and impact of travel and hospitality generally, means investors are very bullish about the potential and opportunity in the space.

There’s obviously, a number of platforms that are attracting significant investment, in particular property management systems, whereas with Lighthouse, we’re very much focused on complementing the property management system but targeting our efforts at solving the problem of how hotels and hospitality businesses generate more revenue. I know that’s a commonly used phrase and I know it’s a big problem statement.

Generally, hospitality is kind of unique in that the systems that are making the decisions around pricing, how and where to promote product and distribute your product, are all very separate, distinct and siloed. In most other industries, there is one platform that is making those recommendations, those decisions and then you’re optimizing your ability to convert demand. Our mission has been to bring all of the data together to ultimately underpin those decisions and then be able to make those recommendations and ultimately affect those recommendations through a single platform.

So, we felt that is maybe what attracted the investors. It is not another property management system. This is actually a platform that complements the PMS and something that is a fundamental for hospitality businesses, which is generating revenue. OTAs obviously have been doing that for a long time, but they are in themselves big tech platforms that have their own business models, whereas Lighthouse is very much about working on behalf of the hotelier to optimize for their business and their direct channels. 

Hotels have never had this amount of information at their fingertips if they can just make sense of it.

That’s the really big thing, because more data in of itself isn’t really a solution to the problem. I think the game changer in recent years has been the use of machine learning and AI. I know these are buzzwords, but it would be impossible for a human being to process the sheer volumes of information that are swirling around a hotel. So, step one is to get your data in order so that you actually choose which data is most relevant to you. Step two is having a system that can process all of that data and make recommendations that you can trust. That’s really the game changer, first of all, the ability to consolidate data into really clear, simple and actionable forms.

The second part is how you layer in machine learning and AI to ultimately affect decisions that benefit the business. And that’s why this particular phase in hospitality technology is going to be truly transformational, because you’ve got a lot of different trends coming together at a time when, candidly, coming out of COVID, most hotel groups just stopped investing in technology, particularly in 2020. There was a slow build back from ’21 into ’22, but it’s only really in the last year or two that hotels have started to invest again. So, there is a lot of pent up demand in the industry and it just so happens to coincide with these next generation platforms like Lighthouse.

When the funding was announced you said you wanted to look at product innovation. Can you just share your thinking?

We are on this mission to build out this platform that essentially brings all of the data, the decision making and then the automation associated with the ability for hotels to price, promote and distribute their inventory. There’s different systems that do that today but they’re all kind of separate. We have, over the last four or five years. built a lot ourselves. We’ve also developed a lot of partnerships that have enabled us to get access to data that is very important to our mission. And then in recent years, we have earned the right to to acquire businesses. But when we look at M&A, it’s not a function of acquiring customers or even technology. Oftentimes, it’s the teams. What we’re really trying to do is bring together the very best innovators in this particular space to help us solve that problem. 

I think there are a number of opportunities for us over the next two to three years. One is the investment in AI. We have a huge amount of data and now the most important part of that is how we best identify opportunities, patterns within that data so that we can bring better AI solutions to the industry. That is important because we lost a lot of talent through COVID. A lot of that talent hasn’t come back to the industry so there’s a shortage of experience generally. AI automation can actually really benefit hotels and overcome some of that labor deficit. 

A lot of the technology and solutions that have been built for this vertical are very much focused on the chains, who are often quite sophisticated and have dedicated people to focus on specific problems or activities. In the independent space they wear many hats and are often time-starved, so that is an area for us. It’s the fastest growing part of our business and, somewhat remarkably, very underserved in terms of technology. The global market, if you look at Asia Pacific and Latin America, the vast majority, 80% plus of hotels, are independents so there is a big opportunity for us there and a big problem for us to solve.

Then there is M&A. We have been so impressed with the teams that have ultimately joined Lighthouse and how that’s helped us accelerate our own strategy. So, it will be much more about quality over quantity but, we do anticipate over the next year to continue to identify those businesses and those teams that really have that big picture thinking to help us truly transform the industry. That was the second area that we had in mind as we were doing our fundraise. 

Are you thinking about any gaps in particular as you look for acquisitions? 

We have a lot of underlying data and I probably can’t back this up with a fact but we would have the most comprehensive universe of data in the industry in terms of enabling hotels to make good commercial decisions. It’s not only first party data but third party data. So we have great insight products to help people make good decisions. We have released our own pricing engine to help hotels, in particular independent hotels, make pricing decisions. We acquired a channel manager last year which enables us to bring pricing and distribution together into a single platform.

Going public or floating is more a function of how you decide to capitalize the company. There are sometimes just as compelling opportunities on the private markets as there are in the public markets.

Sean Fitzpatrick

Now it’s really thinking about how you best promote your product. So, based on demand patterns, which channels? When? Why? So, ultimately you have a platform that complements the PMS. All of a sudden you have a full view of everything that’s happening in your market and it’s incredibly dynamic. It can also make recommendations as to how you consider pricing, promotion and distribution changes. And, if you are willing, it will run almost completely an autopilot on your behalf, creating huge time savings. That’s the vision. We feel really good about data, pricing and our ability to distribute. And so promoting your hotels and helping drive conversion is an area we’re really interested in.

Do you have a feeling at this stage for the end game? 

The opportunity is so significant for us that we don’t think about it in terms of an outcome or a destination. If you just look at another very successful business in our space, Amadeus Hospitality, they’re doing over a billion in revenue. They are still growing double digits, they’re profitable. That’s a fine example of the type of business that you can grow in this vertical while also really helping the industry. We have so much more growth opportunity ahead,

Going public or floating is more a function of how you decide to capitalize the company, how you decide to fundraise. There are sometimes just as compelling opportunities on the private markets as there are in the public markets. So, it wouldn’t necessarily be a means to an end and certainly from our perspective, it’s not the destination. It’s how can we build a very big and meaningful business that really does help the industry and help hoteliers. They’re tough businesses to run and that’s really our mission and we are only getting started.

What would you say are the main challenges for Lighthouse in 2025?

We have a very strong culture within Lighthouse, and as we have acquired and integrated other teams and businesses, we continue to expand that culture to reflect the values of everybody who’s working at Lighthouse. And so as you get bigger and as your teams become bigger, it becomes more challenging to maintain that culture driven mission. It’s not forgetting all of the hard work and energy that has gone into getting us to this point and ensuring that as we grow as a team and as a business, that we stay true to those values. If we do that well, I think everything else will take care of itself. 

What do you see as the challenges for the industry in 2025?

It’s more a case of recognizing that bigger picture. We had a couple of really strong years that were more of a bounce back or a boom, if you like, that resulted from dreadful years in 2021 when there were travel restrictions in place. Now, demand is going to level. Those year-over-year comparisons are not necessarily going to be as good as they were in prior years.

So, it’s generally adapting to the new normal and being very conscious of understanding what’s happening within their market, being able to ensure they’re set up to attract and convert demand from whatever this new normal looks like. Overall, the industry continues to have a fantastic opportunity. Travel remains at the very top of almost everybody’s discretionary spend list. So there’s a bright future ahead. So, I don’t necessarily see challenges, it’s just continuing to evolve and continuing to adopt technology, which may sound self-serving, but there are real benefits to that.

As you look at AI, do you see any uses maybe even in other industries that should be applied to travel?

If you just look at generally what’s happening in AI, there is a number of very large, extremely well-funded businesses that are leading the charge. They’re driving most of the innovation, in particular around large language models and generative AI. That’s obviously a catalyst for change. But as with all of these sort of major shifts in the technology landscape, what happens next is most interesting. So, I wouldn’t say there are any specific use cases that would be great for travel because when you look at how quickly the general technology category is evolving, I would imagine in three years time, there are going to be use cases and applications that are beyond even our existing comprehension.

And you’ll probably see this a little bit from Lighthouse this year. We’re trying to do our bit in preparing hotels for that next wave. We’re particularly interested in the whole concept of how that agent centric sort of technology evolves where you have these agents performing tasks on your behalf. So, if you take that to the end state, what does that mean for booking a hotel in the future? And how do hotels best set themselves up for that future business model? We are doing our best right now to look at how these technologies are evolving and how tools can best adapt to take full advantage of the opportunity. The hospitality industry is uniquely primed but it will take that next wave of innovation to really understand the impact. We’re seeing it in the very early stages but I would say that within the next year or two, we’re going to see that gradual creep of AI into the day-to-day operating of a hotel.