Startup pitch: RoomLion aims for global marketplace for serviced apartments
Whilst the market is witnessing a number of peer-to-peer accommodation sharing services, India-based startup RoomLion focuses on one particular type.
It is aiming to build a web marketplace for only serviced apartments.
Users can search for serviced apartments in a particular destination, browse details, and book online. However, it isn’t an instant booking, the host has to either accept or reject the booking request.
RoomLion doesn’t list a shared accommodation (for example, only one bedroom in a three bedroom house is available) option, rather it lists only the apartments that are entirely available for rent on a daily basis, weekly and monthly.
The company was founded by Ashish Agrawal, an ex-Googler in Mountain View, US.
Prior to founding RoomLion, Agrawal wanted to rent a serviced apartment in Pune (India) for a month long business trip.
He didn’t have any luck in finding a quality apartment to stay, he could only experience poorly built websites of individual operators with inaccurate information. Finally, Agrawal eventually got one of his relatives to personally verify the apartment before he could proceed with the booking.
When he realized a strong need for an authoritative and comprehensive portal for short term rentals, he quit his fancy job at Google, to build RoomLion.
Vine video about RoomLion
Q&A with Agrawal below:
Size of the team, names of founders, management roles and key personnel?
We are currently nine member strong with bulk of the team based out of our Pune office. We also have a presence in Bangalore and Delhi. Quite often, we hire interns to help with business development and operations.
Tushar Dongare is the lead engineer at RoomLion. He has diverse experience across various technology stacks.
Akhil Gupta is the Sales & Marketing head at RoomLion. His past experience includes working with technology startups as well as Venky’s.
For now, we are completely bootstrapped. But we are interested in raising an angel round which will help us speed things up.
Estimation of market size?
The short-term rentals and serviced apartment market in India has never looked so good before. With favorable government policies, increased mobility and the foray of international giants, the current market in India alone stands at over $600 million at 50,000 rooms.
This number goes up by at least ten times when you account for South East Asia and the Middle East. The global number has enough zeros and digits to make us not think about the market size too hard.
Given the unique positioning of RoomLion, there is no direct alternative to the value we add. However, since we are not very popular as yet, our target audience also ends up using:
- Conventional OTAs – Though they focus primarily on hotels, they also carry the inventory of apartment hotels which overlaps with us.
- Peer-to-peer rentals – They are mostly viewed as a cheaper alternative by budget conscious tourists who necessarily do not value privacy and other comforts of a home. Since the inventory they carry is very diverse ranging from spare couches to tree-houses, they are not ideal for business travelers and the likes.
- Rental classifieds – A majority of our target audience considers them as our closest alternative. But due to hassles such as legal compliance, non-availability for short-term, setting up utilities and the poor quality of data, they are not really helpful for someone looking for a ready to move in accommodation for short-term.
Revenue model and strategy for profitability?
Initially we will generate revenue through a combination of a booking fees as well as listing fees charged to the host. We do have concrete plans to ensure profitability but our current focus is on growing the ecosystem. Revenue will follow.
What problem does the business solve?
There is a huge market for short-term rentals. But the entire discovery and booking process is fraught with problems. Many people just give up and compromise by staying at hotels, or pick a suboptimal place that does not meet their preference or budget.
RoomLion is the answer for anyone who is looking for a short-term accommodation and wants the closest possible experience of staying at home.
Some of the benefits of using RoomLion for your accommodation needs are:
- All the residences are professionally managed private apartments
- Every accommodation has access to a kitchen or kitchenette
- Over 95% of the residences are available for as short as one night
- 100% of these apartments are fully furnished and ready-to-move-in
How did the initial idea evolve and were there changes /any pivots along the way in the early stages?
Right from day one, our idea was to become an authoritative portal for discovery and booking of short term rentals and serviced apartments. To this end, we have iterated over the model and incrementally made changes to it.
For example, when we launched, guests could connect with hosts only after they made a confirmed booking. But, in several situations we noticed that guests had genuine questions for hosts – that we were not best equipped to answer. So we gave complete power to guests and let them connect with hosts directly. This is a bold step and completely non-traditional for our domain. But RoomLion strives to eliminate all kinds of friction in closing the transaction between guests and hosts.
Furthermore, guests book serviced apartments for short period of a day to as long as a year or even more. While we offer huge discounts for long duration bookings upfront – there is often room for negotiation between guest and host for extremely long bookings. So now, on RoomLion, guests can make an offer to hosts when they intend to stay for long durations.
Why should people or companies use the business?
Most people or companies benefit most from RoomLion in the following situations:
- Teams visiting a new city on assignments of more than a few days
- Medical tourists for their post-op rehabilitation period
- Foreigners visiting India for leisure or work
- NRIs or guests of a family visiting from out of town for extended periods
- Large groups visiting a town for a conference, wedding or some other event
- Companies who want to provide temporary housing to new recruits until they find a permanent home
- While setting up their own corporate apartments, companies use RoomLion’s expertise and contacts in the short-term rentals space
Many people prefer to stay in serviced apartments even for short duration just because of the superior space and ambience they offer over an equivalent hotel.
Serviced apartments as a product, lacks standardization and often times credibility. RoomLion’s detailed data on apartments, minimizes surprises for guests and helps them make an informed decision. Guests will not find such data, let alone inventory, on any other portal.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
Currently, we are not marketing ourselves aggressively. We would like to focus on adding more inventory across cities and improving the product. We do have many distribution strategies in the works – which includes a combination of online and offline distribution, affiliate based distribution
Having said that, we do rely on SEM, SEO and content marketing, for driving targeted traffic to RoomLion.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
Our immediate focus is to grow our presence in urban India followed by expat friendly countries throughout Asia Pacific. In the future, we would definitely like to see RoomLion as the world leader in short term rentals space.
In three years, RoomLion will have comprehensive inventory from all of urban India in addition to a few select countries from the Middle East and South East Asia. Furthermore, we would have deeper integration with the fulfillment aspects of serviced apartments and short term rentals.
We will need to overcome challenges such as improving the technology integration in this domain as well as influence a paradigm shift among serviced apartment operators.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Perhaps the biggest problem with the travel industry at large is the growing suspicion with which guests view the accuracy of the data on online portals. Most of these websites use the same stock images for multiple hotels and different categories of rooms.
Owing to such incorrect information, guests have lost faith in what they see online. We at RoomLion are striving hard to restore this lost faith by accompanying every listing with over a hundred verified data points, real photos and 360-degree virtual tours of all the residences.
There appears to be a gold-rush for peer-to-peer rental sites such as AirBnB and the likes. India itself has several AirBnB clones. As an onlooker, a cursory look at RoomLion may make us appear like one such clone.
But a deeper look from the perspective of a customer seeking short-term housing would soon surface the fact that the inventory we carry is completely different from what AirBnB and the likes carry.
Even in the US and Europe, which are AirBnB’s strongest markets, serviced apartments do not want to list on AirBnB. RoomLion fills this huge void which often gets misunderstood and marginalized.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style… and why?
I being an ex-Googler, draw a lot from the culture at Google. Right from putting the user above everyone else, to encouraging every team member to completely own a particular function, I made sure that the best interests of all the stakeholders – that is the users, hosts and the employees are upheld at all times.
In fact the name of our incorporated entity – Scrappy Ventures, was inspired from the scrappyness with which many products at Google were formed.
RoomLion argues that it is not an Airbnb clone, and its service is different from Airbnb from the perspective of inventory type and rental duration.
The company lists only serviced apartments (entire home to be rented), where as in Airbnb a portion of a home can be rented. Technically, in Airbnb, a user can select the option of “Entire place” to achieve the same functionality as RoomLion.
RoomLion’s positioning however seems to be on short term stays (for example, a week) rather than a daily stay.
User interface of RoomLion is neat, however it kindles memories of Airbnb UX.
In India, the peer to peer accommodation market is still at nascent stage. As RoomLion points out, its competitors at this stage in India are the online hotel reservation services.
Though there are number of peer to peer accommodation services in India, nobody has a distinct marketshare (yet).
The opportunity clearly exists in the Indian market, the key challenge is changing the mindset of people to reserve a serviced home than reserving a hotel suite room.
Karthick was general manager for Tnooz in Asia until September 2014.