AS it chases scale and its ambition to be South-east Asia’s largest hospitality company, Singapore-based RedDoorz yesterday launched a new mid-scale brand, Sunerra Hotels, pitched at the three stars and above market.
This is the fourth brand in its stable as it attempts to climb up the value chain of consumers. It launched SANS Hotels (economy lifestyle) last November, in addition to KoolKost (extended stay co-living) and its bread-and-butter RedDoorz (budget, typically under S$20 a night, 25-30 rooms).
The company wants to “become an ecosystem of multiple hospitality and accommodation products, each of them backed by distinct brands and catering to the different needs of consumers in South-east Asia: from no-frills budget stays to more design-inspired better experiences and even extended stays offerings”.
If that sounds familiar, that’s because that’s also the vision of multi-brand traditional hospitality companies such as Marriott, Accor and Hilton, the companies that RedDoorz, when launched seven years ago, wanted to disrupt. But such is the evolution of a startup – after funding, you scale and to scale, you start to look more and more like the companies you intended to disrupt.
CEO Amit Saberwal, acknowledging that evolution, said, “We decided to rethink the vision of the company – to be the largest hospitality company in South-east Asia – and to go that route, we want to make sure we have a solution for every asset owner, including mid-scale.”
It found that its tech solution that was powering the economy segment could scale across different demographics, and he believes that its underlying tech play will differentiate the company “so that it looks more like RedDoorz and less like a traditional hotel company”, said Saberwal.
“The brand will evolve in its own way, as time goes by, and we will get smarter as we virtualize the experience more.”
The other difference is possibly in the speed of execution one has come to expect from the team at RedDoorz – since its November launch, SANS is found in 10 different locations across seven cities in Indonesia and the Philippines. Sharing a business case of a SANS hotel with 50 rooms which opened in March 2020, RedDoorz said on joining the brand in November, its ADR increased by S$10 and occupancy grew 2.5 times.
A similar pace of expansion could be expected from Sunerra, although it’s a more sophisticated and complicated product than its predecessors. While SANS and RedDoorz come with a simple sign-up fee, Sunerra is “pure management contract with sign-up fee, technical fee and brand fee. RedDoorz provides the general manager. There is more human intervention”, said Saberwal.
Even as it scales, Saberwal said that the bread and butter of the business continues to be RedDoorz. Using the RedDoorz category as a base, he estimated that SANS makes about two-and-a-half times more per unit, Sunerra is projected at three to five times more while KoolKost is about half.
The first Sunerra hotel has 142 rooms across four categories and includes premium hotel facilities such as swimming pool & spa, fitness and health centre, Sunerra signature food and drinks menu inspired by Indonesian and international cuisines.
“We envision Sunerra Hotels to be the perfect hotel choice for the modern travelers who value comfort, local flavours and a memorable hospitality experience at the best value in the market,” said Liviu Nedef, Chief Marketing Officer, RedDoorz.
Facing the challenging times squarely in the face, Saberwal said, “We are here for the longhaul. When this started, we said we were prepared for the end of 2022, maybe end 2021. The way we do business has changed completely. We are focusing on, and solving, property owners’ problems in different ways than before.”
Its key markets of Indonesia and the Philippines are holding up in spite of the pandemic. “Indonesia’s balanced approach of public health and economy meant that people got confident with travelling,” he said.
“Domestic travel is doing relatively well, with occupancies creeping up, even post-Ramadan. The government is focusing on reopening Bali and it has relocated some staff members to Bali as part of a “work from Bali” programme. There are talks on the opening of Batam and Bintan with Singapore.
“In Metro Manila and cities around the area, there has been an easing of some travel restrictions.”
He added, “Despite the difficult macro environment of last year, we remain deeply committed to building the future of hospitality in South-east Asia and Sunerra brings us closer in realising our ambitious vision for the company and the region.”
Featured image credit: Getty Images
