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What this Indonesian Hospitality Start-up is doing that Airbnb isn’t

How this Indonesian start-up is disrupting economy travel in Southeast Asia

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BY Tanya Mariano - 07 Mar 2017

PHOTO CREDIT: Getty Images

The problem with budget travel is that, sometimes, quality of service and amenities at independently-run, no-name hotels can be unreliable.

NIDA Rooms wants to change that.

And with the $5.6 million Series A funding it secured in February this year, the Indonesian start-up has become a leading player in the branded budget hotel room space. This brings their total funding to $11 million, according to the company.

NIDA Rooms was founded in September 2015 by Kaneswaran Avili, who has years of experience in the budget airline industry. The company follows the model of Oyorooms in India, and, in Southeast Asia, goes head-to head with Rocket Internet’s ZenRooms.

Today, the NIDA network has grown to over 4,000 partner hotels across Thailand, Indonesia, Malaysia, and the Philippines, with plans to launch in Singapore.

 

More than an online listing

NIDA Rooms wants to “crack Southeast Asia’s fragmented and underserved budget accommodation market by partnering [with] hotels in three-star categories or lower and sell[ing] their unsold rooms at deep discounts,” says the company in a statement.

Unlike booking platforms like Agoda and Booking.com which basically function as online listings, NIDA Rooms works closely with hotels and rebrands a given number of rooms under NIDA. These rooms will be sold exclusively under the NIDA brand. Only those that pass the company’s standards become partner hotels, and periodical audits ensure that quality is maintained.

What this means for users – in this case, travelers with limited budget – is that they can expect reliable, standardized services and amenities even from hotels they've probably never heard of, in corners of Southeast Asia they’ve never set foot on. All rooms come with standard NIDA amenity kits, air conditioning, free Wifi, hot shower, and a clean bed. Users can book accommodations through the NIDA Rooms website or the mobile app.

On the other side of the platform are partner hotels that not only get to fill vacancies but also get much needed marketing assistance. These small hotels are usually independently run and lack the financial and marketing experience to compete with bigger brands. By partnering with NIDA Rooms, they become more visible and accessible to potential customers.

 

Banking on the budget travel market

No doubt, Avili’s deep expertise in budget markets is being put to good use in his current venture. And although there's still a lot of room for movement in the economy travel market, particularly in terms of this business model, Avili and his investors are optimistic.

“NIDA Rooms caught our attention as they have developed a business model that enables the company to quickly build a highly scalable platform with a strong brand, by effectively addressing the needs of travelers and local hotels in the fragmented, less digitalized yet large and rapidly growing economy hotel sector in Southeast Asia,” says Robert Chiu, president of Singapore-based Shanda Group, the privately-owned investment company that led the most recent round of funding.

Chiu adds: “We think the addressable opportunities for NIDA Rooms will become even greater as the brand becomes stronger and stronger over time.”

For his part, Avili thinks Shanda’s investment will allow them to strengthen their “partner network and technology systems, and deliver an exceptional customer experience.” He says, “We are pleased to have Shanda’s support given their track record of building strong digital businesses. Their expertise will help further our mission of becoming a regional leader in the economy accommodation industry.”