Think short-term vacation rental websites and the first name that comes to mind might be Airbnb, but Singapore-based Roomorama is fast gaining a foothold in the competitive market by expanding beyond the business-to-consumer (B2C) model. On top of offering properties directly to users, the start-up has been building up its business-to-business (B2B) traffic in the last two years, supplying vacation rentals and non-hotel accommodation to large travel brands such as China’s Ctrip and Tujia, says Teo Jia En, 33, who co-founded Roomorama with her Italian husband Federico Folcia, 38.
Cracking open the massive Chinese market “potentially could be huge,” Teo explains. “There were 120 million outbound tourists and travellers (in 2015) and we are positioning ourselves to capture that. A lot of Chinese tourists who have already travelled out of the country for the first time might choose an apartment or villa, rather than a hotel [on their subsequent trips].”
Roomorama sets itself apart from its top competitors by offering privately managed mid-range and high-end properties, and the bulk of listings are for full apartments, instead of a room in a flat. “If you want a private space to yourself, rather than sharing, then we are the platform for that,” Teo says. The company has recently launched its B2B platform, Bridge, to grow this segment of its business, which is wise considering that B2B customers now account for 30 to 40 percent of the start-up’s revenue.
Teo and Folcia hit upon their idea for Roomorama when she was in her early 20s and working at Bloomberg in New York City. The couple travelled frequently, but they grew weary of drab budget hotels and backpacker hostels, while boutique hotels were beyond their reach. “We used to put our apartment in New York on Craigslist, the online classified site; there were no dedicated websites to rent on a short-term basis,” explains Teo, a mother of two daughters, six-months and three-years. “And we realised there was a market for this, where people want to stay in alternative types of accommodation. But the process is always cumbersome — you have to exchange keys, you just don’t know who you are dealing with on the other side, so we decided to create a platform to really make it simple.”
But shaking off the comparison with Airbnb is difficult, especially when Roomorama was still in development when the now-US$25 billion start-up was launched. “At first, [we thought]: ‘Crap!’ But then we thought the market would be big enough for more than one player, because we looked at how low-cost carriers were proliferating and the next step is people travelling more often and looking for cheaper accommodation,” Teo says. “You have hotels, boutique hotels, hostels, what’s next? We saw the opportunity as everyone’s home.”
After raising seed capital from friends and family and making a small profit through an acquisition, Roomorama received funding from VC firm Vickers Venture Partners in September 2012. Terrence Sim, its vice-president, said: “The fact that Roomorama started out almost the same time as Airbnb showed that they were visionaries and the idea of an instantly bookable inventory in the short-term vacation rental space was what caught our eye. We believe that if the initial model couldn’t work out well, they have the ability to pivot and this has been proven.”
Teo does express some regret about falling a step behind the industry leader. “One of the failures we saw was that we were not aggressive enough,” she says. “We didn’t expect short-term rentals and non-hotel rental accommodation would blow up the way that it has.”
Declining to give figures on the start-up’s profits or funding, Teo says any plans for IPO are up in the air. “The market keeps changing,” she says. “Our vision is to be the leading B2B supplier of this kind of inventory around the world. And once we are, I don’t think there will be a shortage of options.”
Read the other stories in the Entrepreneurs series:
Daniel Chia and Cynthia Siantar of Call Levels