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RedDoorz working on zero-revenue assumption until next year
Budget accommodation platform RedDoorz will assume a zero-revenue scheme until next year due to low demand caused by the worldwide spread of COVID-19.
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Hotel booking platform RedDoorz is working on a zero-revenue scheme until next year in response to low demand because of the COVID-19 pandemic. (Shutterstock/Sompetch Khanakornpratip)
One of the biggest budget hotel booking and management platforms, RedDoorz, will implement a zero-revenue scheme until next year because of low demand for hotel accommodation as COVID-19 spreads around the world.
RedDoorz CEO Amit Saberwal said the company had been working on the scheme from mid-March until at least the next 15 months.
“Profitability is not on the horizon. I think now it’s more about survival, and we will go back to the path of profitability when things start to get normal,” he said during a webinar on start-up survival during the pandemic hosted by Tech in Asia on Wednesday.
He went on to say that, since raising US$70 million in series C funding last year, the company was planning to shift from a growth paradigm to profitability. However, now RedDoorz has changed its goal to enabling recovery in its core market when the time comes.
The series C funding was raised just five months after the company closed its $45 million series B funding.
“We are decently funded until some part of 2022,” he said. “I think people should prepare a runway for mid-2022 at the bare minimum, but we are doing okay for now.”
Saberwal also said the company had begun to feel the effect of the COVID-19 pandemic in mid-March, when Indonesia, one of its biggest markets, began reporting more cases of infection.
“The easiest thing to do is to cut down on marketing. We basically have no marketing, because, unfortunately, there is no demand,” he said, adding that, before the pandemic, RedDoorz had planned for a Ramadan marketing campaign in Indonesia to ramp up growth.
Another way to cut costs was by reducing manpower. Employees whose job cannot be done from home were put in low-allowance furlough.
However, Saberwal said, China’s improving condition and growing demand in South Korea’s domestic market were signs of recovery at least in some parts of the world.
