RedDoorz founder Amit Saberwal on the nuts and bolts of his company

This article is part of Tech in Asia’s partnership with The Jay Kim Show where we publish the revised transcripts from the show’s podcast interviews with top entrepreneurs. This is heavily revised from the original show transcripts. For the full interview, go here.

Amit Saberwal is the founder and CEO of RedDoorz, a leading online booking platform for budget hotels in Southeast Asia. The company has a presence in Indonesia, Singapore, and the Philippines.

In this interview, Saberwal shares the inner workings of his company.

See also: I’m Amit Saberwal, founder and CEO of RedDoorz. Ask me anything!

What led you to become an entrepreneur?

I was actually a hotelier by training. I went to a hotel school, and then I had a reasonably long career with hotels in India. In 2005, I was director of sales and marketing at a large boutique hotel chain called Park Hotels. At that time I said, “OK. This is getting a little boring.”

Then, the online travel scene was starting up in India, and I joined a company called MakeMyTrip during its very early days. In 2010, it went public and got listed on Nasdaq. Then, I moved to Singapore to look after our Southeast Asia expansion.

After about three years from our IPO, I decided that I should become an entrepreneur because I was not getting any younger. It was a now or never moment. I was actually bored working at a startup-turned-billion-dollar enterprise and I thought I should rekindle the fire. So, we launched RedDoorz in Indonesia in July 2015.

Where did you get the idea for RedDoorz and why did you launch in Indonesia?

I was in a unique position as a hotelier by training and an online travel agent by profession. I saw how online travel agencies grew. And when we were growing MakeMyTrip, we realized that it was a science more than an art. So, we invested heavily in technology, people, product, and process.

I found that some properties were faced with a big gap in this technology play. So, we started off by saying, “What if we become the technology enabler for these small properties?” Since these properties couldn’t afford the kind of product management or online technology that bigger properties could afford, we decided to be the back end engine that drives business to them.

We realized very quickly that the properties were still nameless and found it difficult to be discovered. That’s when the RedDoorz brand came in. It made it easier to drive more customers into branded properties because the brand stood for a certain set of values. The brand promise is simple but clean. You get a four-star quality for US$20 to US$30 a night.

We chose Indonesia because it was one of the most exciting large markets in Southeast Asia. It also has a robust domestic travel ecosystem.

How do you select properties to come onto the RedDoorz umbrella?

Currently, we have a demand forecasting engine. We first forecast the demand in a particular area, then break down the demand into a four-square kilometer basis. That means we will continue to add properties in each square kilometer until the demand is saturated. So, it’s quite possible that a mature city would have four or five RedDoorz properties if the demand is high.

In short, we first forecast the demand, and then we scout for a property that looks physically good but does not perform outstandingly, then we tie up with the property. We explain the concept to them, and once they decide to come on board, we’ll put a huge sign outside that says, “RedDoorz.” All the rooms, toiletries, and wifi are branded accordingly.

How does the revenue model work?

Tell us about the users

You recently raised more money. What are your plans for that?

What are the trends you’re seeing in this space five to 10 years from now?