How hospitality startup RedDoorz saw record revenues despite Covid-19

With additional reporting by Aditya Hadi and Terence Lee.

As the Covid-19 pandemic unfolded last year, Singapore-based hospitality startup RedDoorz posted record revenues, according to a recent report by growth equity firm Asia Partners.

The company, which works with hotels to offer budget stays for travelers, was even able to reduce its burn by two-thirds in 2020 and is within touching distance of breaking even, CEO and founder Amit Saberwal tells Tech in Asia.

RedDoorz’s revenue growth in 2020. Q4 2020 figures are based on preliminary data and are subject to change. / Sources: RedDoorz, Asia Partners

He attributed the revenue growth to RedDoorz’s more diverse revenue streams as well as the recovery of domestic travel in Southeast Asia. Saberwal added that 96% of the company’s customers are local, which means it isn’t dependent on foreign tourists.

The company isn’t without its struggles. Internal data seen by Tech in Asia suggests that over 90 properties of KoolKost, RedDoorz’s new co-living business in Indonesia, had seen occupancy rates ranging between 0% to 10% in February this year as Covid-19 continues to take a toll on the country and the rest of the world.

KoolKost’s properties are located in Jakarta as well as smaller cities like Medan and Yogyakarta.

However, business appears to have picked up since then. The company’s latest data across all 250 or so properties shows that KoolKost’s top 17 cities have an occupancy of more than 30%, with major cities like Jakarta and Bandung hitting 44% and 30% respectively, says Saberwal.

He adds that half of the KoolKost properties in Jakarta are performing at over 50%, with a dozen reaching more than 80% occupancy.

But some KoolKost locations, especially those in more remote areas, are experiencing lower occupancy rates as students and young employees, which form a big part of its clientele, have shifted to learning and working from home.

From growth mode to revenue mode

As disclosed by Saberwal, RedDoorz’s 2020 financials show an improvement from its numbers in previous years.

The company’s recent filings show that its group revenues in fiscal year 2019 sat at S$11.6 million (US$8.6 million), increasing slightly from the S$11 million (US$8.1 million) it raked in FY2018.

In 2019, RedDoorz’s income from its property model, which collects revenue for providing hotel-stay services, exceeded its franchise model, which gets revenue only from booking commissions.

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