Airy's Consistency in Developing a Budget Hotel Ecosystem

Budget hotel chain startup airy considers that Indonesia still has a great opportunity to develop budget hotels, even though many similar players have appeared here, such as RedDoorz, Oyo, and Zen Rooms. According to Airy, the quality of jasmine hotels (unbranded or three stars and below) are still far from standard.

In an interview with DailySocial, Airy CEO Danny Handoko said whether or not the budget hotel industry is saturated, it must be seen from two sides, whether oversupply or demand. According to him, what is happening right now is supply good budget accommodation is much less, so less able to meet the height demand.

"There are still many jasmine hotel owners who don't have the same perspective regarding budget hotels average nationwide, we still lack the properties that high quality and value for money," he explained.

The better hotel quality has a close correlation with the increasing economy in the city because it is increasingly visited by tourists. It's just that every hotel owner has his own problems. Each can be handled with a 4T solution, which consists of technology, transformation, transparency and training.

Airy was founded by Danny and his partner Samsu Sempena (Airy's CTO) since 2015. They both worked at Traveloka before starting Airy. Currently the company has more than 300 employees.

Regarding the funding and investors behind the company, Danny still keeps the information closed, including whether Traveloka is one of the investors. Danny only mentions Traveloka as strategic affiliate partner.

He explained that every funding Airy received was always directed at recruiting new talents, marketing, and developing products.

Airy Service

Danny gave an example, if there is a manager who understands basic hospitality, but not yet for the technology side, you can only use technology services from Airy. Vice versa.

Technology services are provided to meet the side supply and demand. On the side supply, there is Airy Ease for an online-based hotel management system with booking and reservation features, HRS, and finance system which is accessed online real-time and presented in a transparent manner.

Next is Airy Aura, the stall check-in independently to speed up the guest reception process so that it helps facilitate hotel operations when peak season; and Airy Community, a training platform for aspects house keeping and front office.

Whereas for supply, Airy provides three types of services, for Airy Rooms, Airy Flights, and travel insurance. latest service, Airy for Business provided for B2B consumers. "Gasoline for consumers is to complete point bread them, as long as it can be handled well, I'm sure their loyalty will grow."

On the other hand, Danny explained that Airy ensures that every property partner who joins can sustain for the long term and can make a profit. The price listed in the application includes a clear commission sharing component for Airy and property owners.

Transparency like this is the company's effort to create a healthier budget hotel ecosystem. "short sustain it only benefits itself, it destroys the ecosystem. That's why we make sure our business is transparent for partners, because most of the properties we manage are continuations of their first properties."

Danny claims, based on internal studies, Airy excels as a favorite brand for property owners and travelers alike. Level churn rate, is also mentioned as the lowest. It is stated that Airy's consumer loyalty is higher than the industry hospitality.

In business terms, Airy's annual growth is maintained at 50-60%. Based on the number of incoming orders, according to him, flight tickets are higher than booking room. However, he believes in the future, the portion between the two will be balanced.

"From the first year to the second year our Airy grew quite significantly, it could even be hits double. But our annual growth is always maintained in the range of 50-60%."

The tactic used to achieve that is to measure consumer lifetime value (CLTV), consumer acquisition costs (CAC) and overall lifecycle of each product. "Because increase value make consumers keyword us to maintain annual business growth."

Product development

Compared to its competitors, Airy is a player who is quite consistent in working on the realm of budget hotels. Danny said that the need for accommodation for tourists is a priority, rather than playing in other verticals such as boarding houses.

In fact, Airy plans to strengthen its Airy Premier type of accommodation in the future so that it can reach all tourist segments. Airy Premier's newest location is in Seminyak, Bali. It is stated that Airy has six premiere types in various locations and in the future the number will be added continuously.

"Of course we will add Airy Premier. We are open to these opportunities. But we are quite selective because Airy Premier has to provide high quality and promise."

Airy Premier has actually been introduced since last year, but the number of accommodations is not so fast because they are selectively selected. Before property owners register themselves, they must fill out 89 checklist questions to determine the right price and type of accommodation.

Airy has more than 2 thousand properties and 30 thousand rooms spread across more than 100 cities. The majority are in the Airy Eco and Standard categories. For the type of sharia accommodation, it is stated that there are more than 400 properties with 5 thousand rooms spread across 50 cities.

All of these properties are sold not only relying on the Airy application, but also listing to various OTA players. It is said that there are more than 200 OTA sites, ranging from Traveloka, Booking.com, Agoda, and Expedia to attract tourists inbound and outbound.

Product-wise, there is potential for Airy to expand regionally, even globally, because its business can be replicated to other countries with similar conditions in Indonesia. Danny admitted that he had been approached by various potential partners from abroad.

However, Danny stressed that Indonesia is still the main country because there is still a lot of homework that has not been completed.