Just less than a week ago, Indonesia-based accommodation startup Bobobox secured US$11.5 million in Series A round of funding, led by Horizons Ventures and Alpha JWC Ventures.

The news came as a breath of fresh air after a series of unpleasant occurrences in the hospitality industry, with companies shutting down, employees being laid off and several other collateral damages that follow the hard hit.

The impact has been especially severe in Southeast Asia, where tourism and hospitality play a significant role. There has been a predicted decline of US$3-7 billion in gross income into the tourism markets in Vietnam, Thailand, Malaysia, and Singapore.

Worse, giants like online booking startup Traveloka laid off 10 per cent of its total workforce in April. A month earlier, Singapore-based RedDoorz had cut eight per cent of its employees.

Smaller but consistent players such as budget hotel startup Airy Rooms, in the meanwhile, were forced to shut down with COVID-19 taking a toll on their operation.

Against all odds

While major companies in the hospitality and travel tech industry bore the brunt, a relatively new player has managed not just to survive but also thrived in the current crisis. And it is no less than a feat in these trying times. The company in the centerstage is Bandung-based Bobobox.

Founded in 2017 by Antonius Bong and Indra Gunawan, Bobobox is a capsule network which has a vision to be the recharging facilities for everyone to get quality rest. Its capsule rooms, or ‘Pods’, are equipped with app-controlled secured door access, customisable lights, Bluetooth speaker, king-size and single-size bed, compact working space, and personal air conditioner. The prices start from US$10 per night.

Pre-COVID-19, Bobobox operated eight buildings with more than 500 pods in total and an average occupancy rate of 80-90 per cent. Amidst the crisis, its occupancy rate dropped to 50-60 per cent in March while other hotels were already at a single digit and many had shut down.

Also Read: Bobobox raises US$11.5M funding when many of its peers in the hospitality sector are on the brink

“Despite the turbulence due to the pandemic, we are grateful that we can still lock-in investment from global investors,” said Bobobox Co-founder and CEO Indra Gunawan.

The pandemic also opens new opportunities for Bobobox as local users become new regulars of the Pods, instead of the usual foreign tourists.

Bobobox’s Marketing Manager Ahmad Qois said the company did things differently to set itself apart from the struggling bunch. In addition to the hygiene protocols and flexible booking options with no cancellation fees, the company operated almost the same as the rest of the measures implied out there.

What is different about Bobobox is that it operates efficiently due to the smaller number of human resources. The firm didn’t have to lay off employees.

Capsule model can be the future

Capsule-style rooms, with only beds and other essentials inside, are not something new in the hospitality industry. It’s often the go-to choice for backpackers as it usually costs less and solo travellers would only need to sleep in their room.

Bobobox’s app-based booking system offers a technically more spacious capsule room. Qois called it “self-contained units” with more privacy and security, which spelled differently nowadays with the outbreak.

With the global advise of maintaining secure distance — ‘secure’ now means being ‘self-contained’ — it is understandable that Bobobox’s model has become more in-trend now than ever.

“With extended preventive measures in place, many locals have relocated to our pods to improve their work-from-home experience. Some would choose Bobobox with the closest distance to their workplace to avoid long commutes to work, limiting their exposure to crowded public facilities,” said Bobobox Co-founder and President Antonius Bong.

It is now safer to be together in an “isolated” place with minimised facilities than occupying a large room with people coming and going for room service and housekeeping on top of a receptionist contact.

Staying relevant

“Relevant” would be a positive uptake on the whole COVID-19 situation, but that’s what Bobobox has done. According to Bong, the current situation allowed the startup to show more use cases of its sleeping pods.

“With little modifications, we have installed more than 100 pods in hospitals as comfortable shelters for doctors and health workers so they can rest better while remaining close to their patients. We have been getting great feedback from the medics and local governments on these facilities,” Bong explained.

Sleeping pods can be a lifesaver for the front liners, and Bobobox’s quick wit earned its brand not only exposure but also trust.

Also Read: Indonesian capsule hotel startup Bobobox raises pre-Series A funding round

The Brains behind Bobobox

Gunawan has 10-plus years of experience in the hotel, tech, and manufacturing industries, while Bong worked in the real estate and tech industries. Together, they lead Bobobox with the latest funding with the plans to use it to accelerate its product improvement and location expansion.

“We are also revamping existing hotels. Unlike many hospitality SaaS [companies] that only provide branding, we help independent hotels by providing the pods, system, and even marketing. The pilot project has been successful, and we are looking forward to expanding this model,” Gunawan said in an article featuring its first round of funding in 2019.

“We want to enhance ‘Pods’ features and overall experience by growing our tech team and strengthening its manufacturing and operating models,” Bong said.

Key takeaways

Their quick wit and edge of having pods instead of hotel rooms prevented them from free-falling. The company also managed to leverage technology in enabling more nimble operating models (short stays and long stays).

Qois shared that the main takeaways of their survival is that they maintain their efficiency and lean operations. “We learned that it’s important to prepare several scenario planning/simulations so that we will be prepared when another crisis hits the industry. Being an affordable and comfortable option will not be enough, cleanliness and safety will be the new compulsory ethos from now on.”

Being in the face of a global pandemic, Bobobox also forces to look at the operation in a different way. “For more use cases, Bobobox will have to be beyond just a capsule hotel but the future of resting pods for everyone to get a quality rest anywhere, anytime,” Qois said.

Qois’s statement is backed by what Velocity Ventures forecasts, which believes that “the most agile startups may be able to discover new business opportunities and adapt accordingly”.

The report in Web in Travel further suggested that the need for travel won’t dissipate and it predicts that travel numbers will bounce back relatively swiftly.

—

Picture Credit: Bobobox

The post Here’s how Bobobox is challenging the doomed narratives of hospitality sector to survive and thrive appeared first on e27.