Hospitality in Asia is about to be reinvented.
What was once a market dominated by hotel conglomerates is now undergoing change with start-ups actively redefining the recipe for a satisfactory accommodation experience.
Certainly, the revolutionary accommodation experience from Airbnb has paved the way for other enterprises that focus on hospitality in Asia. The region has also borne witness to the emergence of innovative yet localized models that cater to the Asian demographic such as Pandabed and OYO Rooms.
For many, the term ‘shared economy’ is often associated with the start-up turned global budget accommodation platform Airbnb. The company harkened a culture of shared space, local-traveller interaction and trust. Airbnb, however, has had its fair share of difficulties when attempting to break into Asia to expand its market reach.
Hospitality in Asia : Airbnb
Jia Jih Chai, former Managing Director of Airbnb for the Southeast Asia and currently Vice President of Carousell for International Operations and Growth, illustrated some obstacles that stood in the way of the growth of Airbnb into the industry of hospitality in Asia.
“(Travellers) liked the idea of staying in a home rather than a hotel, especially without huge marketing costs. The biggest challenge was reaching out to users and finding efficient ways to get customers. Two things helped us: product referrals of happy clients who shared their experience and stay on social media and social media influencers who shared theirs with their followers.”
By gaining acceptance from the public, Airbnb has paved the way for other innovative start-ups to change the face of hospitality in Asia.
Hospitality in Asia : PandaBed
Singapore-based start-up PandaBed strives towards making booking travel accommodation easy by connecting individuals to owners and property managers of apartments, villas and private residences. While PandaBed and Airbnb may have similar business models, the former is focused on serving the ‘Asian’ customer.
CEO James Chua commented in an interview with 9yards that Asian region will require a ‘separate brand and engine from Airbnb’ in order to bring about a change in conventional Asian mindsets.
By emphasizing on localization, PandaBed leverages on financial benefits by providing loyalty rewards. The act of matching hosts and travellers by religious and cultural compatibility also serves to distinguish PandaBed from the rest.
Hospitality in Asia : OYO Rooms
OYO Rooms, sometimes shortened to OYO, is an India-based hotel management start-up that capitalized on standalone hotels. OYO has a network of over 70,000 rooms in 7,000 hotels in 200 cities over India, making it the largest branded hotel network. A million OYO stays are reserved monthly. Their operations provide standardized services including free Wi-Fi and breakfast, toilets and televisions in these hotel rooms.
The primary reason for the immense popularity of OYO is its commitment to consistency – the start-up gives clients the security that they will experience identical service across every booking and facility unlike small independent hotels that may vary in standards. The OYO interface also allows clients to view the state of their accommodation on their booking platform, fostering greater trust by the customer in their services.
These hotels must expect to invest about $60 per room to integrate with OYO’s branding; however, CEO Ritesh Agarwal notes that most can earn profits from the 5th day since the investment. The hotel is audited every 3 days by quality analysts and customers can rate the hotel upon checkout.
Agarwal’s vision is to bring physical space online to change the ways individuals perceive stays away from home. He confidently puts forth the unified goal of founder and start-up.
“When we began the business, I initially thought it would be a hotel chain business. We now envision taking every piece of land in the world, standardizing it and incorporating it onto our online digital platform. I believe people will begin to find different ways to utilize a hotel room than for merely accommodation purposes.”
Check out our interview with OYO COO Abhinav Sinha here.
Hospitality in Asia : ZenRooms
Another similar company is ZenRooms, a hotel booking platform for budget travellers launched by German Internet company Rocket Internet. Instead of competing with OYO on their home ground, ZenRooms targets untapped markets such as Indonesia, Thailand and Singapore with the vision becoming ‘the biggest budget hotel brand in Southeast Asia’. Kiren Tanna, co-founder of ZenRooms, wants the company to be built on ‘quality’ rather than ‘quantity’ and ‘sees a lot of potential in improving room service via mobile’.
ZenRooms innovates with schemes such as Zen for Business, a corporate travel programme that gives 15% off on all bookings and free night stays to attract larger enterprises to engage their services. Companies under the Zen for Business scheme include the Development Bank of Singapore (DBS), Lazada and Uber.
Hospitality in Asia : Tujia
In a similar vein, Tujia, China’s four-year-old online vacation rental site, intends to localize its services for the Chinese customer. Melissa Yang, co-founder and CTO, notes two glaring differences between Asian and Western travellers.
The first is that of trust – Asian guests tend to be warier of vacation rentals and prefer to opt for slightly more expensive but dependable accommodations.
Secondly, Asian consumers possess a higher level of expectation with regards to services rendered. Tujia therefore tailors its services to suit the Chinese customer. The start-up employs offline teams to physically inspect properties in order to upkeep a high standard of available accommodations.
Corporate Hospitality Transformation in Asia
Corporates, such as the AccorHotels group, are also establishing themselves as agents of innovation alongside independent start-ups. In September 2016, the AccorHotels’ Marketing Innovation Lab revealed its brainchild JO&JOE.
A brand catered for Millennials that intends to blend the best of private-rental, hostel and hotel formats, JO&JOE incorporates a myriad of fresh design concepts such as a ‘Happy House’ where clients can cook and do laundry and ‘Together’, a modular sleeping area that offers spacious beds, private lockers and USB ports. AccorHotels is expecting to launch this project in over 50 destinations including Thailand, Hong Kong, Tokyo, Paris and Australia. Read more about JO&JOE here.
With fresh perspectives surfacing from all over the globe, it is this race of differentiation that will push both start-ups and conglomerates to explore new means of serving today’s traveler.
Revolution within the hospitality industry does not end with Airbnb; in fact, it has only sowed the seeds for more ideas and changes to come.