Indon capsule hotel firm sets sights on US$6bil market

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JAKARTA (ANN): Homegrown capsule hotel start-up Bobobox has set its crosshairs on a multi-billion dollar domestic hotel market in Indonesia, aiming to be in 100 locations in 11 cities across the archipelago next year, from five outlets in two cities today.

Bobobox co-founder Indra Gunawan said the start-up would target budget-conscious millennial travellers as part of the burgeoning domestic hotel market, valued at US$6bil this year, according to undisclosed third-party data.In capturing the market, Bobobox intends to have around 600 capsules in nine to 10 locations by the end of the year. It currently runs 326 sleeping capsules in five outlets located in two cities in Indonesia.

Bobobox has turned an operating profit with every outlet by suppressing each capsule’s investment cost to a quarter of that for conventional budget hotel rooms, while renting them at higher than rule-of-thumb prices, Indra said. Bobobox recorded an 83% occupancy rate this year. While Bobobox is not the first capsule hotel in Indonesia, it is likely the largest capsule hotel chain brand, easily outpacing competitors such as Capsule Indonesia and Whiz Capsule Hotel, which respectively have two and three outlets.

Bobobox’s more serious competitors are hotel management start-ups such as OYO, Reddoorz and Zenrooms, each of which operate over 10,000 rooms and mainly target budget-conscious millennial travellers. In comparison, OYO rooms in Jakarta go for as low as 137,000 rupiah per night. Indonesia’s online travel market, which includes online hotel and flight bookings, is expected to grow at a 16.12% compound annual growth rate over the next six years up to US$25bil by 2025, a recent Google-Temasek report said.

 

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