New booking app aims to help both travellers on a budget and hotels that lack marketing capabilities
IF YOU are someone who travels often but do not want to spend much on pricey hotel rooms, budget accommodation is the way to go.
However, settling for a shabby, unkempt room far away from the city may not be appealing either.
NIDA Rooms, a platform that matches budget hotels with consumers, could be a workable solution for travellers in the budget segment.
Its business model revolves around helping consumers find the right hotels at the right price and location and, at the same time, helps hotels sell unsold rooms.
“It is about redefining the hospitality experience for our mass market consumers in Asia,” said Global Rooms Malaysia Sdn Bhd chief executive officer Kaneswaran Avili.
Global Rooms is the parent company which manages NIDA Rooms.
He said it was a big challenge for consumers looking at hotels below the three-star category as these were often unbranded or individually owned with no brand recognition.
“Firstly, the ability to identify the right hotels at the right price and the right location can be a problem. Our app and business model solves that problem.”
Secondly, he said, NIDA Rooms helps hoteliers too.
“Most of them in this segment are struggling with an average occupancy rate of below 60% as they are small and don’t have marketing capabilities. They are not being sold by the big players like Expedia or Agoda,” he explained.
Although there are two and three-star hotels sold through online travel agencies (OTA), the room prices are above US$40 (RM169) a night.
“Our market segment will be below US$35 (RM148). In Jakarta, there are about 700 hotels where only 70 are branded and above three-star. The rest are individually owned, unbranded but consist of good, quality hotels. We want to feature them in NIDA Rooms,” he said.
However, for a hotel to be part of NIDA Rooms, they would have to adhere to some requirements.
“The rooms must be clean, bed linen must be of reasonable quality, clean bathrooms and hot showers, TV cable services, air-conditioned rooms and free WiFi services. We have a partnership manager in each city to do quality checks and provide feedback to the hotel owners.”
The four primary markets for NIDA Rooms in Asia are Malaysia, Indonesia, Philippines and Thailand.
The app is currently only available on Android devices but it is in development for iOS. Consumers can view the exact location, photo of the room, price and booking capabilities.
Subsequently, Kaneswaran said, they would be in Vietnam and other parts of Asia, before expanding to Latin America, which has a huge business opportunity.
“NIDA Rooms works well in a market where there is a low penetration of branded hotels, unlike Europe or the US where there is a high penetration of budget hotel chains there,” he said, adding that the company was looking particularly at Peru, Mexico, Chile, Argentina and Brazil.
When he was in India, Kaneswaran said he was inspired by a similar business model available there. “I thought this would work well in Asia and emerging markets.”
He was with AirAsia for six years, where he was in charge of commercial business, and later co-founded the Tune brand (Tune Hotels and Tune Money).
Kaneswaran then moved on to become an independent aviation specialist, involved in turnaround projects for airlines in Macau, Indonesia, Singapore and India.
NIDA Rooms for the Philippines and Thailand will be available in mid-December and January 2016, respectively.
They have more than 250 employees in four countries and have signed up with more than 500 hotels.
“We take five rooms at each of these hotels and sell them, which makes up 10% to 15% of their total inventory. Their occupancy will grow from 60% to 75%, improving their profitability,” he said.
Hotels under NIDA Rooms are located in major cities such as Kuala Lumpur, Petaling Jaya, Klang, Ipoh, Penang, Malacca, Johor Baru, Kota Kinabalu and Kuching.
“We also want to cover places like Skudai, Kulai and Taiping. By the end of March 2016, we want to cover every city in Malaysia.”
In Indonesia, they have signed up with hotels in Jakarta, Bandung, Surabaya, Medan and Bali and are also looking at Semerang, Jogjakarta, Solo, Manado, Palembang and Pekan Baru.
“We are also looking at places which don’t have airports but are tourist attractions.”
Kaneswaran said they aimed to acquire 1,000 NIDA Rooms by end of this year in all four countries, 5,000 hotels by mid-next year and close to 10,000 by end of 2016, including Vietnam.
By AIDA AHMAD