Hospitality startup Airy pivots toward profitability, but the pandemic may slow its progress

Indonesian hospitality startup Airy is pivoting toward profitability this year, after aggressively expanding its hotel network over the last five years and becoming the country’s biggest aggregator of budget hotels.

While the company believes the goal is achievable, CEO Louis Alfonso Kodoatie now has to contend with the Covid-19 pandemic, which has upended the travel industry worldwide.

A general view shows a near-empty beach in Kuta on Indonesia’s resort island of Bali on March 22, 2020, amid concerns of the COVID-19 coronavirus outbreak. Sonny Tumbelaka / AFP

“My whole experience is enough to build a profitability strategy for Airy,” says Kodoatie, who spent the past decade working in the travel industry for companies such as Agoda and Traveloka. The business slowdown is an opportunity for Airy to improve its service and amenities across its properties, he says.

The startup was launched in 2015 with just two properties and a handful of hotel rooms. Today, Airy has a network of 2,000 properties with more than 30,000 rooms. According to the CEO, this is the right time for the startup to switch gears from chasing growth to pursuing profitability.

“When the number of our hotel inventories has reached a number that we want, we need to maximize the sales,” he shares.

But the endeavor will no doubt be an uphill battle. Governments around the world have shut their borders, and airlines have been forced to cancel flights in an effort to curb further infections. Popular tourist destinations in Indonesia, such as Bali, are also bracing for the economic fallout from Covid-19.

Initial estimates from the Indonesian Hotel and Restaurant Association show that hotel occupancy in the archipelago decreased more than 20% as of mid-March, Kodoatie says. The numbers could get even worse, as Indonesia suspended its visa-on-arrival policy for a month effective March 27 because of a spike in infections.

“Our occupancy rate also got almost a similar hit,” Kodoatie says. “However, we are optimistic that the pandemic will be resolved soon and the travel industry can recover.”

Prepare to bounce back

As the outbreak rages on, Airy is evaluating which strategies it can take to adapt to the fast-changing business environment.

Among the opportunities it’s exploring are increasing the quality of its properties and adopting new technologies that can help the startup provide better customer experience to its clients.

“With the right technology and service quality, we are sure that Airy can bounce back faster and have our business recovered as before,” Kodoatie notes.

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