The Roomorama co-founders believe their short-term rentals website can compete with Airbnb.
The downside of trailing behind a market leader is that you’re often compared with them. Sites like Roomorama, 9flats, and Wimdu certainly have to deal with this reality — since Airbnb was the first to launch their short term rentals site in August 2008.
But just because you’re last off the starting block doesn’t mean you’ll flounder. Facebook, for example, quickly overtook Friendster and MySpace to become the defacto social network for Bieber-idolizing teens and longsighted grannies alike.
Roomorama is more accurately described as a fraternal twin than a clone. The website, co-founded by Singaporean Teo Jia En and Italian native Federico Folcia, was birthed in January 2009 — just five months after Airbnb.
But the idea was already developing while they were colleagues at the Bloomberg office in New York City. As avid travelers, they found it challenging to get cheap accommodation while vacationing in Europe.
At the same time, while they wanted to rent out their own apartment, existing online classifieds were hard to use and inconvenient.
Their business idea blossomed. And now, with more than 30,000 listed properties around the globe, the team has recently shifted part of their base of operations to Singapore to focus on growth in the Asian markets.
Jia En has been busy doing media tours in Asia, and in fact I spoke to her shortly after she returned from a trip to Kuala Lumpur, Malaysia.
She is confident that enough room exists for many players in the short-term rental space, since the Asian market is just beginning to open up. Singapore was chosen not just because Jia En is a citizen there, but also due to its proximity to the rest of Asia and the ease of setting up business.
However, she recognizes that winning over Asians takes time.
“They’re more conservative and not as open to letting strangers stay in their house. Moving to Asia is a long-term plan, it’s not something that brings immediate gratification,” she said.
Nonetheless, their strategy in this region involves reaching out to professional property managers to rent their spots to willing travelers.
“We want to reach out to more affluent Asian travelers as well as younger folks who travel with friends and are more open to the concept,” she added.
So, how does Roomorama distinguish itself in an increasingly crowded field?
Jia En pointed out that the website appeals to travelers seeking middle range to high-end properties, and they recently revamped their website to reflect this. 90 percent of their listed properties are completely private, which is ideal for families on vacation.
“The new website’s a lot more sophisticated, sleeker, and saavier,” she said,
Airbnb, on the other hand, does cater to budget travelers who don’t mind just renting a no-frills room.
Roomorama also has more stringent checks on guests and hosts than competitors, requiring them to submit their IDs to the website before making a transaction. This is on top of other industry-standard measures like security deposits and withholding of payments until guests are satisfied with the location.
While they do not offer free insurance coverage to hosts in the event their properties get damaged (unlike Airbnb and 9flats), Jia En believes preventive measures like Roomorama’s work better than reactive ones.
Another unique selling point for Roomorama is its perks program. For instance, a visitor to New York City could get discounts at a nearby restaurant or cleaning service. However, this program isn’t useful everywhere since a sufficient volume of Roomorama users is needed in a particular location to entice merchants to jump on board.
Most recently, they launched HNTBAT.com, which stands for How Not to be a Tourist. The website, Jia-En describes, is “a user-generated travel guide that gathers local intel about how not to look, act and live like a tourist. In the guide, there are cheeky do’s and don’ts that travelers should keep in mind so as to blend in and not get dismissed (or ripped off!) as an ignorant tourist.”
Currently, they have content for New York, London, and Singapore, with articles about Paris and Melbourne in the works.
The rest of Roomorama’s features are pretty by-the-book, with minor variations from its competitors. Like Airbnb, the website offers a concierge service, except that it’s more targeted towards business travelers.
Both sites also have a ratings system in place let guests gauge which properties are popular, and both only allow guests who have stayed at a certain location to leave a review.
And like all their competitors, Roomorama charges a booking fee to sustain their operations. But unlike Airbnb, guests pay for the booking fee instead of the hosts. Jia En believes that this measure attracts higher-quality hosts who would charge better rates.
So far, Roomorama has been earning healthy revenue from booking fees despite bootstrapping all the way. While they were profitable in the first year, they’ve been pouring their money into expansion since.
Fundraising is something they’re looking at in the near term, and they hope to secure investors with the right expertise to help them grow in Asia.
Going by how companies like Wimdu, Airbnb, and 9flats have gotten funding, we won’t be surprised if Roomorama is next.
Moving forward, the company plans to launch an iPhone and iPad app by end 2011. They are also looking to establish a stronger presence in countries like Malaysia, China, Thailand, Indonesia and India.
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