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Hotel startups raise more funds as competition among budget hotels heats up
Hotel startups are making upgrades to their designs, amenities and management of listed properties, while also carving out a greater online presence.
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Hotel management group Archipelago International inaugurated Harper Wahid Hasyim Medan, its third hotel in Medan, North Sumatra, on July 22. (Instagram/File/harperwahidhasyim)
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ollowing its launch in Indonesia in October of last year, India-based hotel management startup OYO has claimed it is outpacing Singapore-based rivals RedDoorz and ZEN Rooms, which have been operating for four years, en route to becoming the largest, matured foreign startup of its kind in the country.
As of June, OYO said it had managed 23,000 rooms, much more than the 1,600 rooms managed by ZEN Rooms. RedDoorz declined to reveal the number of rooms it currently manages, though it did announce in late February that it had managed 17,000 rooms.
Assuming there was consistent monthly growth of 414 additional rooms each month since entering Indonesia in October 2015, it is projected that RedDoorz would have managed about 18,600 rooms as of June.
OYO country manager Rishabh Gupta said the startup focused this year’s first half on “reach”, which meant putting at least one hotel in as many regions as possible, but would focus the second half on “penetration”, which meant expanding its footprint in existing regions.
“Our occupancy rate is 70 to 75 percent across our portfolio. It means demand is there. You might think Cepu [small subdistrict in Central Java] has no demand, yet it’s also selling,” he said on July 30.
The United States’ AirBnB injected earlier this year US$75 million for the Indian startup to support its investment. OYO has raised a total of $1.7 billion (including from AirBnB), making it the most well-funded among the three hotel management startups.
Such startups differ from hotel aggregator startups including, among others, AirBnB and Traveloka, as the former invested to upgrade its design, amenities and management of listed properties on top of pushing the properties' online presence.
