Budget room aggregators are raising money from their investors not only for tapping into new domestic markets but also extending their offerings to countries in South and South-East Asia as well as Africa.
While OYO Rooms, the largest in the category, has already ventured into Malaysia, others like Vista Rooms, Wud Stay, Deyor Rooms and Stayzilla are following suit with their tech enabled solutions and operational expertise in managing this segment.
A couple of months ago Vista Rooms ventured into Sri Lanka with 200 hotel rooms.
“Having been through the learning curve with 800 budget hotel rooms in India, our systems are now in place as we understand the demands of this segment. Sri Lanka has the largest number of Indian tourists and is an active market for us as we are seeking new revenue streams from such countries,” said Vista Rooms co-founder Ankit Sheth, who was formerly with OYO.
One-year-old Deyor Rooms is already in advanced negotiations to enter markets like South America and South Africa.
“Occupancies in the budget hotels segment is low in such markets as it is not easy to develop technology for performance and inventory management systems. We will soon be finalising a deal in Brazil as budget hotels there need a brand — along with tech — to market their offerings in such markets,” said co-founder Chirag Gupta.
Investors in budget room aggregator Wud Stay have already entered Indonesia by promoting its budget hotel network, Tinggal. “The same VC firms behind Wud Stay, like Mangrove Capital and Simile Ventures, have invested in a budget hotel network in Indonesia since it has greater smart phone penetration than India,” said Prafulla Mathur, founder and CEO of Wud Stay.
Perceived threatAnother reason the budget hotel aggregator are looking at foreign shores is that online travel agents in India perceive them as a threat and refuse to list them on their platforms.
Stayzilla, which raised funds recently, is also looking at neighbouring countries. Sachit Singhi, the company’s co-founder, said: “We have plans to take Stayzilla to neighbouring countries in South-East Asia and Africa.
“There is ground work going on to take our market place offerings to neighbouring countries which are underserved in this segment. Most of the existing sites in these markets serve as ticketing platforms and booking sites for hotels. Since we are on the stay side of the business, it gives us a chance to personalise our services and take the concept to such markets.”