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Capsule hotel start-up sets sights on $6b market in Indonesia
Bobobox differentiates itself from competitors by offering more spacious rooms – enough to fit double beds – and by automating hotel-related processes such as check-in and check-out. The start-up offers rooms in Jakarta for as low as Rp 132,000 ($9.40) per night
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A hotel employee tests the LED mood light in a capsule at the new Bobobox hotel on Jl. Panglima Polim in South Jakarta on Nov. 21, 2019. (JP/Norman Harsono)
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omegrown capsule hotel start-up Bobobox has set its crosshairs on a multibillion dollar domestic hotel market in Indonesia, aiming to be in 100 locations in 11 cities across the archipelago next year, from five outlets in two cities today.
Bobobox co-founder Indra Gunawan said the start-up would target budget-conscious millennial travelers as part of the burgeoning domestic hotel market, valued at US$6 billion this year, according to undisclosed third-party data. Almost athird of the market is facilitated by digital platforms.
In capturing the market, Bobobox intends to have around 600 capsules in nine to 10 locations by the end of the year. It currently runs 326 sleeping capsules in five outlets located in two cities in Indonesia.
“If everything goes well, we hope to be in 100 locations by the end of next year,” Indra said at the launch of Bobobox’s first two Jakarta-based outlets on Thursday.
Bobobox, taking its name from the Indonesian word bobok (sleep), typically used in conversations with children, launched its flagship outlet in Bandung in July last year.
Bobobox has turned an operating profit with every outlet by suppressing each capsule’s investment cost to a quarter of that for conventional budget hotel rooms, while renting them at higher than rule-of-thumb prices, Indra said. Bobobox recorded an 83 percent occupancy rate this year.
“We have a much bigger surplus margin than traditional or conventional hotels. This makes our payback periods shorter. Ours is at 3.5 years compared to eight to nine years for traditional or conventional hotels,” Indra added.
