"New-Age Hospitality" Strategy Leads RedDoorz to Reach BEP in 2022

A hotel chain startup in Southeast Asia, RedDoorz, has succeeded in proving their strategy for surviving the pandemic. In 2022, the company recorded revenue growth of up to 5x compared to before the pandemic.

Previously, they had announced a change plan business strategy to become a company new-age hospitality. One of the main strategies of the company is to build a new hotel brand "Sans Hotel" by the end of 2020.

Through 'brand' Currently, RedDoorz is targeting travelers from generation Z and millennials by prioritizing a comfortable accommodation concept youthful,design-inspired, and warmth by combining smart technology and affordable prices.

This change in strategy has proven to encourage the development of the company's number of properties to reach 55 percent since 2019. Until now, RedDoorz has accommodated around 3 thousand properties in 257 cities throughout Indonesia. This achievement is a proof of RedDoorz's business resilience in the midst of a pandemic.

Launched since 2015, Indonesia is RedDoorz's biggest market. However, RedDoorz also operates in Singapore, Vietnam, the Philippines and Thailand. In October 2022, RedDoorz Indonesia and the Philippines are said to have reached break even point (BEP) or no longer lose money.

Regional VP Marketing RedDoorz Henry Manampiring said, "Through the implementation of strategies and business fundamentals that focus on property owners and customers, we managed to fulfill our promise to achieve BEP in 2022." With this achievement, any income that the company generates in the future will be counted as profit.

Entering 2023, RedDoorz shared several strategies and plans to improve business performance going forward. One of them is by updating the system loyalty programme made simpler to enhance the booking and stay experience. RedDoorz will also strengthen its offline seller network and expand its property reach.

RedDoorz VP of Multibrands Adil Mubarak also added, "Through various strategies and initiatives, the company aims to double the number of properties compared to the previous year and achieve BEP for RedDoorz Southeast Asia in Q4 2023."

Industry budget hotels in Indonesia

Based on BPS data, the number of business providers accommodation, including hotels in Indonesia in 2021 was recorded at 24.1 thousand, a decrease from the previous year amid pressure from the Covid-19 pandemic. This figure decreased by 10,43% from the previous year. Although the downward trend occurred across all categories, accommodations such as budget hotels and villas were hit even harder.

Entering 2022, the tourism industry is starting to revive. According to data from the Ministry of Tourism and Creative Economy (Kemenparekraf), the movement of domestic tourists in 2022 has shown positive numbers. It was recorded that as of November 2022 there were 800 million movements, above the target of 550 million movements.

From the online travel agent (OTA) side, a number of players in Indonesia are also feeling the revival. One of them is Tiket.com, which during the pandemic has launched several new innovations by offering an online experience. In a joint interview DailySocial.id, Tiket.com CEO George Hendrata revealed that even during a pandemic, the market was still growing.

In the Indonesian budget hotel market, OYO as a direct competitor to RedDoorz is currently expanding its number of premium segment accommodation options. The company also aims to equip properties with technology tools that can help customers design, and execute their own promotional offers to increase occupancy and support revenue maximization.

In Indonesia alone, apart from RedDoorz and OYO, several companies that offer budget hotel facilities are Bobobox and ZenRooms. Other similar startups airy, already out of business. The platform no longer displays listings for bookings after 31 May 2020.