LuggageHero is a proven luggage storage service that operates as a sharing economy concept. Our extensive network of storage sites are located inside local retail shops, cafés and hotels that have extra space available. We call them “luggage heroes.”
By partnering with local businesses, we are able to offer luggage storage options all over the cities we operate in. Currently, there are more than 1,000 luggage heroes available in 40 major cities in Europe and North America. Collectively they have provided more than 2 million hours of bag storage.
The race to become the household name in luggage storage has just begun and we are currently #1 with largest number of reviews
GMV of EUR 1.5M and net revenue of EUR 0.9M growing 130% YoY
Operating in 39 cities across US and Europe with 998 locations
Acquired US competitor Knock Knock City in August 2019
Luggage stored for +2M hours since launch growing 186% YoY +250K users on the platform growing 169% YoY
Huge and untapped emerging market opportunity of EUR 3.7B
55% of travelers using LuggageHero are millennials (age 23-38 years)
A majority is leisure travelers (72%) however 28% is both business and leisure.
70% of LuggageHero 250.000 customers books more than 4 trips a year.
The accommodation type is usually Airbnb or similar (37%) or hotel (39%).
Problem or Opportunity
It's a familiar predicament: you have a few hours before you can check in to your vacation rental, and you want to start doing some sightseeing. Or you have to check out by noon but your flight doesn’t leave until the evening. So you’re left exploring a city dragging your luggage behind you. Our mission is to solve that problem.
By utilizing existing space and resources of local businesses, LuggageHero is able to ensure that there is always a storage option close to where users need it. Our cost-effective solution, hourly pricing model and risk-free booking policy provides exactly the kind of flexibility and convenience that modern travelers have come to expect.
Even better, this concept doesn't only benefit travelers. It also gives local business owners an additional way of attracting a strong consumer group to their establishments as well as bringing in extra revenue.
Solution (product or service)
To use the service, customers book the nearest storage location through our mobile-friendly website or native app and instantly receive directions to the location on their smartphone. The drop-off and pick-up processes are quick and easy, and payments are handled securely online. There is no cancelation fee. Luggage is secured with a tamper-proof seal and is insured against damage or loss while in storage for up to €2,500 per bag.
The competitive landscape is a mix between existing bricks and mortar companies and rail stations already offering to store luggage for travelers. In the marketplace category exist mainly 4 international competitors such as NannyBag, Stasher, Bagbnb and Vertoe.
Advantages or differentiators
The biggest differentiators are how LuggageHero has enabled all travelers to use an on-demand and flexible platform to engage with.
Overall, we believe our customers are better served with a flexible hourly and on-demand service. Therefore, LuggageHero charges users £1/€1/$1 only for each hour used, unlike most other luggage services, which often make you pay for the entire day.
The feedback from many of our more than 250,000 users is that they agree with our method and do value the flexibility of not having to pre-pay for the service before knowing if they are going to use it. This means that we accommodate everything from one hour to a full day -- and you don't have to tell us how long you are expecting to make use of the service.
This ultimate freedom to travelers is in line with our vision for the company and the service.
The LuggageHero business model is simple: users are charged by the hour (from $1/£1/€1) with a reasonable daily maximum + a handling fee (from $2/£2/€2) per bag. All prices are per bag stored. The revenue generated is subject to a 50-65% commission charged by LuggageHero.
It's free of charge for businesses to join as storage partners.
Money will be spent on
Breakdown of how the funds are planned to be spent:
• Sales and marketing (new markets) — 76%.
• Product development — 14%.
• Management and admin — 8%.
•Financing Costs - 1%.
The business is running with positive contribution margins in 17 out of 40 cities*. It takes on average 3-4 months post-launch to reach the 1st month of a positive contribution margin*. The most profitable cities are Copenhagen, London and New York City, which were launched in 2016-2018
Covid-19 has impacted travel in a way not seen since 9/11.
However, we don't expect fewer people will be traveling as it hasn't slowed down in the past. When 9/11 impacted the world 700 million international travelers were going abroad and by 2019 that number was 1,6 billion. Travel is a megatrend and will keep growing.
In the short term, this travel stop with borders closed is affecting LuggageHero and all travel-related companies. However, the benefit of being a marketplace becomes even more evident with no expensive inventory, real estate, or hardware to maintain. Our model is very scalable, and most costs are variable expenses that follow demand. We can act from day-to-day to any need around the world, and we are optimistic that not only will travel return, but there will also be a pent-up demand for it. We are poised to capture that.
We identified a lot of opportunities during these times as we have built even closer relationships with partners looking for additional revenue streams and seen that shops/hotels are more open to seeking other revenue streams in becoming storage partners.