Heavy traffic boon to growing hotel brand
Dianne Landicho Goldsberg—CONTRIBUTED PHOTO
While horrendous Metro Manila traffic continues to challenge many Filipinos’ daily commute, it has also become an unexpected growth driver of a budget hotel brand. “What’s interesting about the Philippine market is [that the customer profile] isn’t just about demographics, but psychographics as well,” says RedDoorz Philippines’ country marketing manager Raenald Renz de Jesus, referring to the study of consumer spending habits and values.
“For example, we’ve had people booking [a room on our platform] because of the traffic. We’ve had some who have opted to book a room instead of braving flooded streets,” he says.
RedDoorz is a technology-driven hotel management company offering affordable accommodations. Since it was founded in 2015, RedDoorz has expanded rapidly across Indonesia, Singapore, Vietnam and here in the Philippines, partnering with existing budget hotel accommodations and improving their amenities and services.
The Philippines, says De Jesus, has become the company’s second largest market, thanks to a healthy mix of travelers who both for both leisure and practical reasons.
“There are people who book because it’s traffic, but we are also seeing more and more people booking for staycations,” De Jesus says. “The majority of our customers are those between the ages of 25 and 39, young professionals, because there is a high affinity among them towards app bookings.”
He adds that the reason people find it easy to book on their platform is still because of their consistent value proposition—affordable properties that are well-maintained and offer good service.
“A P1,000 or P1,500 room which is in a property with a swimming pool isn’t bad at all. If you have a family and you’re saving up, staying in that kind of accommodation won’t be too hard on your budget. Affordability really plays a big factor [in our sales growth],” De Jesus says.
The most expensive RedDoorz room is at P3,000, says Stefanie Irma, country head for the Philippines.
On the side of their partner properties, De Jesus says RedDoorz is “able to guarantee improved occupancy.” Their data show that RedDoorz partners, which previously had only 50 percent occupancy are able to raise that number to over 70 percent in less than six months on the booking platform.
Dianne Landicho Goldsberg, owner of RedDoorz near Arca South, Taguig, attests to this, and says that since partnering with the affordable hotel chain, her property has enjoyed an average occupancy rate of 90 to 100 percent daily, despite not being located in a prime commercial area. Aside from bookings, RedDoorz also takes care of the property’s advertising and marketing.
One of the first property owners to partner with the startup, Goldsberg says she first rented out her rooms as apartments to long-term tenants.
Her partnership with RedDoorz allowed her to convert the building into a hotel.
Her income, she says, has tripled in the past year, allowing her to start planning the addition of two more of her properties under the RedDoorz brand.
RedDoorz’s tech-based approach to hospitality is what drives this growth, says Irma.
“We provide partners with one platform so they can consolidate all their bookings. All the data they need is on that platform,” Irma says.
“RedDoorz has so far established 200 properties across 20 cities in the Philippines.”
Such aggressiveness applies to all of RedDoorz’s markets, says Liviu Nedef, RedDoorz senior vice president for marketing and communications.“In the next couple of years, we will be going deeper into our existing markets, and we will also be looking into markets where we have no presence yet,” Nedef says. “We are on full-on growth mode.”
