Mohit Gandas, Country Director, RedDoorz Indonesia
Recently, hospitality tech company RedDoorz announced that in Q4 2023, the company experienced a group revenue growth of 30 per cent year-on-year (YOY). It also stated that, since 2019, RedDoorz has recorded a group profit of over 90 per cent.
In a press statement, RedDoorz CEO Amit Saberwal said that the positive growth achieved throughout 2023 is the outcome of implementing the “Mission Freedom” strategy.
“We optimised the operational and financial aspects of the company to attain independence and maximise profit growth. We are also optimising the use of Artificial Intelligence (AI) for service automation and focus on developing businesses in our core markets, Indonesia and the Philippines, to increase the loyalty of domestic tourists in each country,” he said.
But how did the company survive the most challenging time for the travel and tourism industry in the last decade? In this email interview with e27, Mohit Gandas, Country Director, RedDoorz Indonesia, shares all the details.
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The following is an edited excerpt of the interview:
What kind of changes in user behaviour have you noticed in Indonesia in the post-COVID-19 lockdown era?
We have observed changes in user behaviour mainly revolve around travel preferences and increased digital adoption. As lockdowns eased and pandemic restrictions gradually relaxed, people began to travel again.
At the same time, we noticed a trend among consumers to prioritise saving their budgets and allocate more spending
for holiday seasons. Regarding digital adoption, our users have become more proficient in using technology and have started to book directly through our app rather than make reservations at the hotel.
Is there any change in your user acquisition strategy once Indonesia has opened up again?
During and after the pandemic, we continued to expand our portfolio of property businesses, targeting other market segments. On top of our main brand, RedDoorz, which focused on budget hotels and targeting the middle to low segment, we seized the opportunity to establish multiple brands to target more premium segments, including SANS, UrbanView, and Sunnera, two- to three-star hotels.
We are focusing on attracting domestic travellers and we are confident that the movement of domestic travellers will continue to increase. According to data released by Indonesia’s Central Statistics Agency, the recovery rate of starred hotels from August 2022 – 2023 was only around three to four per cent. However, it is a different story with RedDoorz, which showed a more than threefold increase in room sales during the same period.
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Through #OpenAllDoors campaign, we also communicate that RedDoorz is not only for holidays but also for workcation, staycation, visiting family and relatives, accommodation after attending concerts, graduation, etc.
Can you tell us more about the use of AI in your operations? How does it make a difference?
We use AI technology to do strategic pricing. In emerging markets such as Indonesia, customers tend to make reservations at the last minute, unlike in advanced ones where people book many months in advance. They will suffer competitively if hotel owners know how and when to price.
Our system for strategic pricing, however, picks up demand signals including surges in traffic in real time, which help to establish optimal room rates for our property partners, enabling them to capitalise on economies of scale. The need for a real-time solution is more important in emerging economies.
How do you maintain profitability with your strategy to acquire more properties?
We will continue to focus on our core business and core markets: Indonesia and the Philippines. We also focused on quality vs quantity of property portfolio as well as a lot more on bigger and more premium properties. We should have roughly 300 properties under our premium brands, SANS, UrbanView and The Lavana. Every property now contributes more money at a per unit level, and we want to grow another 30-50 per cent this year.
What opportunities do you plan to focus on in 2024? What is your major plan?
Our focus in 2024 is to maintain profitability. We aim to have 8,000 property partners in three to four years.
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As for Indonesia, we see promise for growth led by the increasing number of young travellers, which is more than 270 million people, the world’s fourth largest. Especially for Gen-Z, we observed a shift in behaviour among Gen-Z travellers post-pandemic, particularly those who are digitally adept and active on social media, that they tend to travel based on influencer recommendations, which are more various destinations and “Instagrammable” hotel designs.
This demographic is becoming increasingly discerning in selecting budget-friendly accommodations as well. So, we will continue to focus on the Gen-Z tourist group.
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Image Credit: RedDoorz
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