A few months into the pandemic that ravaged Malaysia’s hospitality industry, a pair of co-living space owners operating in the city centre was approached by a neighbourhood hotel in Kuala Lumpur to help fill up its vacant hotel rooms.
Leveraging on their co-living experience, the duo managed to help the hotel secure 30 guests staying for one month or longer within the first few months.
Buoyed by their success, the savvy pair, Jordan Liew and Henry Liu, got the idea to work alongside hotels in Malaysia to convert a portion of their rooms into medium and long-stay accommodation. Thus was born Roomah, a Malaysia-based rental accommodation startup focusing on providing flexible monthly stays to renters.
As movement restrictions and the remote working paradigm shift funnel guests towards extended-stay hotels, Roomah aims to capture this growing demand and help put heads in beds during the pandemic.
Liew, co-founder and chief experience officer of Roomah, said that he and Liu, co-founder and CEO, saw a gap in the market for hotel booking platforms that allow users to book longer stays, with existing platforms targeted at short-term stays.
Alongside the team’s CTO, Kevin Ong, they decided to create a rental platform for hotels to list their accommodation bookable on a monthly basis at affordable rates.
Roomah was launched in May 2021, after a year-long pilot test. Filling hotel rooms aside, Roomah also aims to make the booking process seamless for guests, allowing them to book move-in ready or plug-and-play hotels for long stays with just a few clicks.
Explained Liew: “We have designed our platform (such that the) user can complete the whole booking process in five minutes via a web page or soon-to-launch mobile app.”
“Unlike traditional year-long leases, we want to ensure users don’t have to go through various channels, multiple viewings, price comparison and lengthy negotiations to find a suitable accommodation for longer stays. We make this happen by providing a standardised renting experience, both online and offline.”
Besides giving detailed information on each hotel listing, Roomah also provides virtual tours of each property to give users the confidence to book immediately.
All listings on the Roomah platform come fully furnished, with weekly cleanings, 24/7 online concierge and high-speed Wi-Fi. Resident perks include special merchant discounts, complimentary laundry services, yoga mat and other amenities.
New opportunities, new challenges
With selling long-term hotel stays, the biggest challenge is to educate the market about hotel living as users are not accustomed to the idea of staying long-term in a hotel, opined Liew. “In general, renters finding a place to stay for long-term will only look for conventional accommodations such as apartments and landed houses,” he said.
Liew added that the team strives to bring about a mindset shift by promoting the benefits of hotel living such as having all-inclusive rentals, fully furnished space, weekly housekeeping and 24/7 concierge support.
The Roomah team is currently in discussions with several hotels to redesign their rooms for a better long-stay experience.
Amenities wise, Roomah operates a hybrid model, according to Liew. The company allows hotels to list on its platform just like Booking.com and Agoda, while at the same time providing these hotels some long-stay amenities at their own expense.
Converting hotel guestrooms designed for short-term stays into medium and long-stay accommodations come with its own set of challenges.
“We identified the lack of kitchen facilities and readily available laundry services as main challenges to welcome longer-stay guests,” said Liew. He added that the company partners with laundry providers to provide pick-up and drop-off laundry services to its residents, and is currently in discussion with several hotels to build a communal kitchen so residents have the option to cook.
“There is also an alternative to include an induction cooker and microwave in each hotel room, however, that will be subject to each hotel’s approval,” he said.
Roomah for growth
Opportunities to optimise hotel inventory in Malaysia existed even before the pandemic.
Liew noted that pre-pandemic statistics showed that the average occupancy rate of hotels in Malaysia hovers around the 65 per cent mark, with occupancy rates for even the best-performing hotels rarely exceeding 80 per cent.
“This means at any given time, there will be 20 per cent of hotel rooms left vacant, and we hope to work with hotels to continue unlocking values of these unutilised hotel rooms by accommodating long-stay guests,” he said.
The hybrid work format and tighter budgets as a result of Covid-19 have placed hotels in a sweet spot to capitalise on the growing extended-stay demand by marketing themselves as a cost-effective lodging option to price-sensitive renters.
Opined Liew: “The various lockdowns imposed by the (Malaysian) government have caused the depletion of cash reserves of many individuals. Now, renters would prefer lower upfront-cost accommodation options such as hotel living and co-living.”
Since its launch, Roomah has received about 100 bookings, with average length of stay about three months now. Liew observed that customers are staying longer in a hotel now as compared to when they were just starting out, with the platform’s guests largely made up of interns, new hires, digital nomads and contract workers.
Roomah typically charges between 10-18 per cent of commission for each hotel listing, depending on the types and prices of rooms being advertised.
While Roomah’s business has been battered by Malaysia’s protracted lockdowns, Liew said they are using this downtime to improve their product features and work closely with more hotels and new partners to prepare for the eventual upturn.
Currently, there are 10 hotels on the Roomah platform, ranging from three- to five-star properties, with all situated in the Klang Valley. The company aims to reach 20 hotels in the Klang Valley to cover all key areas in the short-term, said Liew.
“We also aim to form strategic partnerships with start-ups, corporates, or student organisations that could add value to the ecosystem such as job portals, smart locker providers, BPOs and co-working spaces,” he added.
The company also plans to expand into Penang and Johor Bahru by year-end, and beyond its home ground to other regional cities, starting with Bangkok and Ho Chi Minh City in 2022.
However, the team’s ambitions go beyond the extended hotel stay segment.
Said Liew: “Hotel living is just the beginning. We are constantly working with hotels to think of ways to create more product offerings that fit the needs of users. In addition, we plan to work with boutique hotel owners to convert their hotel into a co-living building. This will create more affordable and flexible options for renters to live within the cities.
“In a nutshell, our vision is to create a world where people have the freedom to choose where to live and work. Roomah does this by repurposing and unlocking spaces that were once difficult to access or unsuitable to become more accessible and convenient.”
Looking ahead, Liew predicts Malaysia’s tourism recovery will be “sluggish” for the next six months, after which a vaccine-led rebound will be steered by domestic tourism. “In terms of international travel, it will be harder to predict as it depends on vaccination progress and travel restrictions imposed by other countries,” he said.
Overall, Liew expects that tourism will not return to pre-pandemic levels until earliest 2023. As such, he believes “it is imperative for hotel owners to take a proactive approach in exploring new ideas and alternative approaches in running their hotels over the next few years, while waiting for full travel to return”.
While passenger demand performance for June showed a very slight improvement in both international and domestic air travel markets, demand remains significantly below pre-Covid levels owing to international travel restrictions, said the International Air Transport Association (IATA).
Total demand for air travel in June 2021 (measured in revenue passenger kilometers or RPKs) was down 60.1 per cent compared to June 2019, which followed a normal demand pattern before the Covid-19 crisis. That marked a small improvement over the 62.9 per cent decline recorded in May 2021 versus May 2019.
International passenger demand in June was 80.9 per cent below June 2019, an improvement from the 85.4 per cent decline recorded in May 2021 versus two years ago. All regions with the exception of Asia-Pacific contributed to the slightly higher demand.
Total domestic demand was down 22.4 per cent versus pre-crisis levels (June 2019), a slight gain over the 23.7 per cent decline recorded in May 2021 versus the 2019 period. The performance across key domestic markets was mixed, with Russia reporting robust expansion while China returned to negative territory.
“We are seeing movement in the right direction, particularly in some key domestic markets. But the situation for international travel is nowhere near where we need to be. June should be the start of peak season, but airlines were carrying just 20 per cent of 2019 levels. That’s not a recovery, it’s a continuing crisis caused by government inaction,” said Willie Walsh, IATA’s director general.
Asia-Pacific airlines’ June international traffic fell 94.6 per cent compared to June 2019, unchanged from the 94.5 per cent decline in May 2021 versus May 2019. The region had the steepest traffic declines for an eleventh consecutive month. Capacity dropped 86.7 per cent and the load factor was down 48.3 percentage points to 33.1 per cent, the lowest among regions.
European carriers saw their June international traffic decline 77.4 per cent versus June 2019, a gain from the 85.5 per cent decrease in May compared to the same month in 2019. Capacity declined 67.3 per cent and load factor fell 27.1 percentage points to 60.7 per cent.
Middle Eastern airlines posted a 79.4 per cent demand drop in June compared to June 2019, improving from the 81.3 per cent decrease in May, versus the same month in 2019. Capacity declined 65.3 per cent and load factor deteriorated 31.1 percentage points to 45.3 per cent.
North American carriers’ June demand fell 69.6 per cent compared to the 2019 period, improving from the 74.2 per cent decline in May versus two years ago. Capacity sank 57.3 per cent, and load factor dipped 25.3 percentage points to 62.6 per cent.
Latin American airlines saw a 69.4 per cent drop in June traffic compared to the same month in 2019, improved over the 75.3 per cent decline in May compared to May 2019. June capacity fell 64.6 per cent and load factor dropped 11.3 percentage points to 72.7 per cent, which was the highest load factor among the regions for the ninth consecutive month.
African airlines’ traffic fell 68.2 per cent in June versus the same month two years ago, an improvement from the 71.5 per cent decline in May compared to May 2019. June capacity contracted 60.0 per cent versus June 2019, and load factor declined 14.5 percentage points to 56.5 per cent.
China’s domestic traffic returned to negative territory in June, declining 10.8 per cent compared to June 2019, following a 6.3 per cent growth in May versus the same period in 2019. IATA attributed the decline to new restrictions introduced following a Covid-19 outbreak in several Chinese cities.
US domestic traffic improved from a 25.4 per cent decline in May versus the same month in 2019, to a 14.9 per cent decline in June. Life in the US was starting to see some normalcy following the easing of measures and the rapid rollout of the Covid-19 vaccination, noted IATA.
Walsh said: “With each passing day, the hope of seeing a significant revival in international traffic during the Northern Hemisphere summer grows fainter. Many governments are not following the data or the science to restore the basic freedom of movement.
“Despite growing numbers of vaccinated people and improved testing capacity, we are very close to losing another peak summer season on the important trans-Atlantic market. And the UK’s flip-flop to reinstate quarantine for vaccinated arrivals from France is the kind of policy development that destroys consumer confidence when it is most needed.
“A risk-managed re-connecting of the world is what we need. Vaccinated travellers should have their freedom of movement returned. An efficient testing regime can sufficiently manage risks for those unable to be vaccinated. This is the underlying message in the latest WHO travel guidance.
“The UK, Singapore and Canada have indicated timelines to open their borders without quarantine for vaccinated travellers. The European Commission has recommended that its member states adopt travel protocols that are closely aligned with the WHO – including testing for unvaccinated travellers. Similar moves to reopen borders in line with the WHO guidance by the US – leaders in vaccinating their populations – would give critical impetus to demonstrating that we can live and travel while managing the risks of Covid-19.”