As many people probably did after learning that Rick Schwartz sold SydneyHotels.com for $100k, I spent some time searching for city Hotels.com domain names to see who owns them and how many are developed. Just about all of the domain names I looked up are developed, which says to me that there is money in that business.
I was reading the comments on Rick’s Blog, and as is typical for Rick’s Blog, there was at least one negative comment alluding to the fact that the domain name has privacy guard and the owner’s info can’t be seen. For those of you who have any doubt about Rick’s sale, I can confirm that the buyer was in fact Swift Rank, and the company is an active domain buyer.
I’ve done some business with Swift Rank, having sold them some travel-related domain names last year. The company owns a considerable number of exact match geographical travel domain names in the car, hotel, restaurant, and travel verticals. Just about all of the company’s domain names are developed.
The company’s purchase of SydneyHotels.com probably isn’t their only large recent acquisition. Swift Rank also owns the following great names, some of which were recent:
- BostonHotels.com – Owned by Frank Schilling as of 6/21
I would venture a guess that if you own any great City Hotels.com domain names (or other generic travel domain names), Swift Rank may be interested in discussing an acquisition.
Yet another idea that looks like bankruptcy…. archive this please 🙂
There si a curse, crappy idea combined with over paying Rick for a name.
They’ve been actively doing this for a while, so it looks like they know what they’re doing. Their team has solid credentials too:
That domain simply isn’t worth that much…. They overpaid by at least 3x to 5x in my opinion…. Rick made out like a bandit. Good for him:)
Keep in mind these guys have been doing this for 3+ years. Just as I’ve said about development of City .com domain names, once you successfully build a model, you can justify paying more than others would because you know what the typical ROI will be based on your experience.
Maybe I should explain my train of thought more..
While I agree with you that they can be profitable ( model can work ) I have to believe that when you over pay to get into a market you start well behind the 8 ball. Not only that but those great minds who justify it turn out to be not such great managers… usually because it isnt their money.
Just my opinion, we all make bad business decisions at times but not 12 in a row,
I completely agree with what you’re saying, and we all know at least a couple examples of companies/people who have gone all out and burned down in flames.
But think of it this way. If you told some of your buddies from high school that you paid $25,000 for any domain name, they would probably be shocked… “wow, Josh spent $25,000 for a freakin’ domain name.” However, they don’t know that you can sell the same name for $85,000 because they don’t know the market like you know the market.
SR has been doing this for 3 years, so obviously something is working because they have the capital to buy and they have the inclination to buy. I would have to think if it hasn’t worked yet – especially with some of their other great names (they have 12k names apparently), they wouldn’t be spending their money on these. Gotta know BostonHotels.com from Frank Schilling wasn’t cheap either.
True, without knowning an industry such as hotels top to bottom its just a gut feeling and yes bostonhotels.com was likely more than $100k.
I once had a guy say to me ” you paid how much for some dots on a screen “
I thought it was a good deal for both parties at that price, names of that quality don’t come up too often and in the right hands it’ll probably never come up for sale again.
Looks like swiftrank use Booking.com as the affiliate.
“SR has been doing this for 3 years, so obviously something is working because they have the capital to buy and they have the inclination to buy.”
Exactly, they should know by now if the model is working!
http://www.otels.com/ have been doing it alot longer, have you seen all their hotel names? WOW!
BTW, These guys bought HongKongHotel.com for just $10,000 so they obviously know what they are doing. They have a worldwide portfolio and Sydney fills a gap. This appears to be a very strategic acquisition.
Some of you are just resellers, and have no clue (no offense meant) on developing and making money of a domain. You are looking at ‘They bought it at $100K and who buy it at 4-5 times that much?’ No one. Bottom line they liked the name, they have the money, the system and will milk it year after year. If you have $100K laying around, what are your options, stock market, US treasuries, a mutual fund or maybe a top domain name? 8-10% a year is a good return on your investment, with a top name and over 200 hotels in Sidney they might make that much in a year.
Had they opened a Subway sandwich shop they would have spent more than $100K. In the grand scheme of things, $100K or $60K will not make a difference, that’s just a secretary’s salary for a year.
You can add vancouverhotels.com to the list which also used to belong to Frank Schilling.
They also bought FlorenceHotels.com from NoktaDomains. I remember they wanted $84,500.
@Elliot: “These guys bought HongKongHotel.com for just $10,000….”
I remember that well, dropping out of the bidding around $7500, because I had the impression that I’d never win. Feels a little better to know that it was a lost cause. Not difficult to get a payback on that outlay.
They also have LondonHotels.biz.
Are they buying the dot biz? There’s still a few out there.
Whoever is buying so many good domains, and putting them to use, does know the expected ROI, they aren’t throwing money out the window. The booking market is a valuable one and you must see things on the long term…..
$100,000/10=$10,000. Divided by 365 means if they make $27 a day they’re getting 10%.
I would not have sold SydneyHotels.com for $100,000.
It would have taken $300,000 or more for me to part with it. I know, I know…..I’m crazy, out of touch, etc…..all those labels….but that is what it would have taken if it were me.
We all value domains differently. The way I see it is that the prices for domains is getting ready to explode. It is what we have been waiting for for years and the next five years will start to see crazy high prices that make us all salivate, compared to todays prices.
You know, $100,000 is merely the price of a ho-hum middle class home here in the U.S. When you think of it like that $100,000 for SydneyHotels.com was a screaming deal. It’s CHEAP!!!!
I did sell a “bastard” spelling of a generic hotel domain to them for about $25,000 a year or so ago.
I’m kind of surprised Frank and Rick would sell those domains, and even more surprised Rick would let that domain go for so cheap when he always seems to get a good price in past sales.
I think the best comment here was from priv
“Some of you are just resellers, and have no clue (no offense meant) on developing and making money of a domain”
While some may take it offensive this guy (or girl) is exactly right. Way too many Monday morning quarterbacks out there who comment on the price of the name yet they do not understand the industry behind such a domains keywords.
How many of you can price an antique lamp?
I can’t and I wont comment on the price of lamp domains yet many of you do.
No 2 domains are alike and the value of any domain is only worth as much as it is to the owners business plan.
10 years from now the same people will still be arguing about how in the world XXX domain sold for so much.
Embrace the value of domains within industries you know – otherwise your opinion is about as relevant as mine on antique lamps.
It’s always interesting to read about the big sales, and I appreciate the mathematics you shared with us, Tim.
I own several CityResorts.com – I wonder if Swiftrank would like to make me an offer…
Ellen – that’s easy, the answer is no. Not many exact match searches for those terms.
Tim – I like your maths, but it assumes that the value of the domain has been lost now that we have bought it. Obviously the domain will always have value and people are free to debate what that is but historically there has been no better asset investment in history, so it’s a mix of earnings forever + retained and rising asset value.
Glenn – thank you for dropping out of the bidding for http://www.hongkonghotel.com , it was the right call as we would have acquired regardless. I would have bid that name to $100k so was very pleased to pickup for $10k – at that price it is ROI under 1 year.
Louise – don’t buy .biz . Picked that up for nothing.
Josh – re http://www.bostonhotels.com your gut feeling is incorrect.
Prime domains like these rarely come up, and they are not going to be cheap for good reason. There are in fact only about 10 holders of such domains and they don’t sell because they don’t need the money.
All our major acquisitions have hundreds of thousands of exact match searches monthly, and direct typin that in some cases amounts to hundreds of uniques a day, every day regardless of how search engines ultimately view them. Our biggest domain acquisition which took place last month http://www.lasvegashotels.com has exact match search numbers in the multi millions.
So is Hotels.com worth $50 Million as a name (pre advertisement campaign)?
Hi @ Graham, Thanx for dropping by! This is great! A response from the person who is the focus of the article! This is great, @ Elliot!
@ Graham Easton, congratulations on your purchase of SydneyHotels.com & LasVegasHotels.com – amazing! SydneyHotels.com sounds like it was a reasonable price. LasVegasHotels.com – you’re right! – has exact search in the millions! Hotels ARE the attraction . . . a Vegas hotel is not just a place to stay. If I vacation in Vegas, I would stay with family and visit hotels. It’s something to see without spending lots of $$: aquarium, gardens, lions, etc.
There is a whole world of difference betewwn Domainers who buy and sell domains for small money and individuals / companies who know how to turn a domain into a serious cash generating business model.
The hospitality market pays up to 18% commissions on consumed transactions. eg One hotel room at $100 per night pays up to $18 commission. The maths are simple. This market is constant and growing. I applaud Graham and his colleagues. They are buying their pipeline at a % of what they will earn.
Good luck guys.
@ Mike O’Rielly
6% is the norm affiliate commission at booking.com. that is 6% of the 15% that booking.com charge a premium hotel client.
I remember the HongKongHotel.com auction on NJ because I was the second highest bidder.
Stopped bidding because I had some more deals the following days (which revealed to be great) or else they would have spent more for that domain name.
I simply can’t buy all domains I would like, I must make choices.
Your figures are correct for Booking.com, but there are more lucrative avenues out there.
@ Mike O’Rielly
There may well be more lucrative deals out there but Swiftrank use Booking.com Swiftrank may get a much higher percentage because of the quality of their traffic but they still have to perform to cover their over head costs which would be considerable. This business model has been tried before and found to be lacking as ROI just isn’t there. Otels.com as mentioned in a previous comment never has had the capital outlay that Swiftrank has, note that O’tels.com use Ian.com as their affiliate provider. On a SEO model Swiftrank’s names and sites may not last for long on Goog as they are reptitive templates with canned content. Goog has just finished the caffine update and now G is fine tuning the caffine update which in theory will penalize sites such as lasvegashotels.com and etc from the G index. Swiftrank maybe able to live with out SE traffic for the moment but SE traffic sure does make a difference to the bottom line long term. Having said that the names that Swiftrank has aquired are great names for the Hotel niche industry which is possibly one of the most lucrative industries on the net.
I don’t think it’s appropriate to discuss Swift Rank’s business model without any information at all (the important info is presumably confidential, so there’s no way anyone unassociated with the company has a way to know). They appear to professionally develop all of the domains that they acquire and they don’t look anything like thin affiliates to me. Your assumption of them being relying on affiliation is pure conjecture. Ask yourself is HongKongHotel.com a good search result for anyone that searches for Hong Kong hotel? – I’d say without a doubt it is. In fact, if you look at the user experience, not only do you appear to get what you asked for but they’ve even split out and subdivided all of these sites into Spanish and I have no doubt will further develop these properties. They’ve built a solid foundation on each site which can grow as much as the company chooses to grow them.
Remember some of these domains were acquired just weeks ago, so I think given the time frame credit is due – shoot, the site is much better than parking them for the last 14 years.
I originally highlighted the sales because I think these are acquisitions of very very high quality domains, the likes of which rarely come on the market and their sale alone is newsworthy. Some of these unreported sales I found were purchases from top domain investors at significant prices, and without learning about the one sale, I wouldn’t have noticed the others. As domain investors, I think we would all like to own domains like LasVegasHotels.com and BostonHotels.com. I would say the current owners are far from hobbyists, and judging their motives based on little or no information is a dumb thing to do.
Thanks for all your comments… comments are now closed on this post.
“This business model has been tried before and found to be lacking as ROI just isn’t there.”
So you think SR is just throwing out hundreds of thousands of dollars (perhaps millions) without having a viable business model? I don’t think so.
Just re-read what Graham wrote about the $10k purchase of the singular HongKongHotel.com: “at that price it is ROI under 1 year.” If they make more than $10k on that name in a year, I am sure their better names like SydneyHotels.com will perform much better.
Again, looking around at all the city hotels.com names that are developed, it’s clear there is a great deal of money there. If that wasn’t the case, we would see more parked pages.
I dont say that thay dont have a viable business model. I do say that the ROI is not what we may like it to be based on the hundreds of thousands perhaps millions that it appears may have been spent.
HongKonghotels.com was a steal price, thats a better name than SydneyHotels.com IMO but $10K in one Year, doudt it. Why not ask Graham Easton which name has the most traffic. HongKong cost $10K SydneyHotels cost $100K. I know which one i would rather have. Elliot, you have not considered the context of my comment no where did i say that the names are not worth the reputed sale prices, A name is worth what it’s worth only the buyer and seller can be the judge of that . Those name will be worth money no matter the business model. As for previous business that attempted similar ventures try ww.aboutanywhere.com, they had $500K p/a in renewal fees alone, now down to one site and perhaps some other domains (unkown) Not necessarily hotel themed but livecurrent.com had a geat portfolio ony perfume.com makes any real money they have sold or are selling the rest of the domains off, albeit for large amounts. There was a canadian firm Geo something (cant remember) one great name, great overhead, they paid for traffic made millions Goog dumped them and now they are gone. Nothing wrong with the Swiftrank model, its just not as great as you might like to think it is. only time will tell if they can live and prosper off affiliate income from a 2nd party.
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