Expand the "KoolKost" Boarding House Business, RedDoorz's Strategy Towards Profitability

Budget hotel startups RedDoorz inaugurated its newest business vertical in KoolKost boarding house to serve users who are looking for occupancy for more than one month. It is believed that this business concept can be replicated for RedDoorz's overseas market, although it has not become a priority in the near term.

To DailySocial, Business Head Coliving RedDoorz Ankit Lalwani explained, the KoolKost concept can actually be replicated for other countries. However, at least this year, the company wants to focus on expanding KoolKost to 50 cities in Indonesia, from its current position of 14 cities with 100 properties.

"It's quite possible to expand outside of Indonesia, but here is the country with the highest population. So, right now we are focusing on Indonesia first, not other markets," said Ankit, Thursday (23/1).

According to him, KoolKost exists because of the need for technology and solutions that have been absent in the boarding house industry. In fact, this industry has great potential, there are more than 50 thousand boarding houses spread across Indonesia. Also, there is no dominant operator in this industry yet.

The target users of KoolKost are students, first jobbeand middle level professional. Quoting from BPS data, in 2015 there were 9,3 million people who chose to live as migrants to work and study. Of this figure, about 60% or 5 million people choose boarding houses as a place to live.

Prior to its inauguration, Ankit said KoolKost had entered a trial period of approximately six months while studying problems and solving them with a technological approach. From this learning, he is confident that he can provide real solutions for the industry.

KoolKost guarantees 24-hour customer service, high-speed internet connection, room cleaning services and water refills. All KoolKost rooms are equipped with an en suite bathroom, quality furnishings and fittings, including comfortable beds and wardrobes with ample storage space.

In addition, a number of hospitality management technologies from RedDoorz are also prepared to attract more boarding property partners. For example, RedPartners which property owners can use to manage inventory, track and combine orders; manage from start to finish; and provide a good long term stay experience for guests.

On the platform, they can join the KoolKost pilot program to see a significant increase in room occupancy, with an average increase of more than 30%. Next, RedFox is a platform for direct distribution of current prices across OTAs, making it easy for property owners without having to hire someone revenue manager.

The company also guarantees that the occupancy is selected according to the criteria that have been determined with RedEagle. It is a property detection and acquirer tool, the company can identify the right property for KoolKost according to the specific search parameters.

No special team

Unlike RedDoorz, continued Ankit, KoolKost has three types of accommodation options that can reach all users. Namely, housing with the concept of sharia, girls and men only. In addition, KoolKost is part of Coliving, a business unit of RedDoorz to target long-term residences.

"We shape community life that's why we created many types of KoolKost services, in order to reach everyone to be friends with each other in the same community."

In addition to KoolKost, there is Residences by RedDoorz which offers more facilities and special standardization, including a game room, Netflix shared room, kitchen, and free breakfast every Sunday.

Lastly, Residences by RedDoorz Apartment has the highest facilities compared to services coliving other. Provided swimming pool, parking area, free of charge electricity and area coworking.

Ankit ensures that all properties under the KoolKost umbrella will be regularly managed. There is a special team that goes to each property to ask if there are complaints, damage or so on. The team worked not only for KoolKost, but for the entire RedDoorz property.

Even before joining, the RedDoorz team determines what parts of the property need to be upgraded or renovated. Within two weeks, new properties can enter listing KoolKost.

"So that all listing properties shown, have gone through various QC processes. There is a team that regularly checks the quality of the property, whether the property ismanage well or not, how clean and so on."

At the same time, he also emphasized that in the future KoolKost will not manage apartment properties because there are different management concepts.

In the meantime, KoolKost can be ordered through the RedDoorz app and website. The official app and website for KoolKost itself are currently under development, planned to be released two months from now.

Actually, a similar concept has also been offered by several local startups. One of them is done by the site developer listing MamiKos boarding house by launching MamiRooms.

Drive towards profit

Vice President of Operations RedDoorz Adil Mubarak explained that KoolKost is a business vertical that is targeted to help realize the company's ambitions towards a profitability position.

"We focus on bringing the country where we already are, to profitable and this KoolKost as a new segment, for differentiation between shorts and long stay," he said.

The company's position at this time is to take a slow growth path by managing all expenses more healthily. This means that RedDoorz still adopts a money-burning strategy but is more controlled, not reckless because it wants to pursue growth.

As a result, every country in ASEAN that RedDoorz has entered has gone through a mature strategic decision. Besides Indonesia, as of now RedDoorz is present in four countries, Singapore, Vietnam and the Philippines since the first time operating in 2015.

"We always make sure the market [that we will enter] is good, the market is formed, the consumers are good, it's not random."

This condition contrasts with the expansion of Oyo which is trying to be present in any country. Within seven years, unicorn it operates in 80 countries, including the US, China, Europe, UK, India, Middle East, Southeast Asia and Japan.

Along with this target, he continued, the company focused on developing technology to satisfy all parties. RedPartners, RedEagle and RedFox are some of them. The ambition that is being prepared is to prepare a more intuitive application so that consumers can be served more optimally.

"We want interaction with consumers to be much better. So when they check in, the application can be smarter to notify if there is a complaint with their room. It plan us," concluded Adil.

Listed RedDoorz already owns more than 1200 properties throughout Indonesia spread over 100 cities.