Supporting short-stay industry growth
Startup carves niche in the business-to-business segment
THANKS to the popularity of short-term rentals, the market has seen the increase in number of property management agencies over the past few years.
These companies manage units that are let out on short-term and look into things like cleaning, laundry, check-ins and guest communications.
HostAStay Bhd founder Jordan Oon refers to them as “hosts”.
“(Hosting) is a booming industry. It’s very lucrative. Everyone is going in to mine the short-stay market,” he notes.
“Hosts are running on the sharing economy. They don’t own the property. Property owners earn from property appreciation. Hosts earn from managing the units of these property owners, but they don’t need to come out with the upfront cost of buying the property,” Oon adds.
Some two years ago, there were less than 50 of such companies. Today, there are more than 1,500 of them operating in the local market.
However, hosts encounter a lot of challenges.
That’s where HostAStay has eked out a unique business model by serving the hosts.
HostAStay provides a platform that connects hosts with service providers for insurance, cleaning, renovation, interior design, and so on. It also helps connect property owners with hosts.
Oon came across this business idea when he started hosting his property about two years ago. While the money in hosting short-term rentals was good, Oon found it difficult to get regular service providers as the business grew.
Surely, he wasn’t the only host in the market facing this problem.
“We decided to help those in the market. We started this system to assist them. We collaborate with external partners to supply these services to the hosts on our platform. We are a niche B2B business. We understand the problems hosts face because we have done it before,” he shares.
Oon hopes to build a closer network among the hosting community to encourage them to collaborate, share resources and, perhaps, streamline locations to reduce their cost.
For example, if there were 20 different hosts managing separate units in a building, getting them to work together to use the same cleaning service provider could help reduce the cost of cleaning.
“We are trying to form a community,” he says.
This is not an easy task. It is not only about getting different parties to connect through its platform, it is also about solving individual partner’s problems to ensure a functional and collaborative ecosystem is in place – which is the real challenge.
Oon says HostAStay is willing to do all the groundwork to build this network in helping to grow the short-term stay industry. This includes bridging the gap between long-term residents and short-term rental businesses.
He notes that a lot of buildings are banning homestays as long-term residents are not in favour of them because this invites strangers into the building and short-term occupants may cause disturbances after hours.
But property owners can’t merely leave their units vacant.
“The building management gets off at about 6pm. Most times, if there are complains about homestays, it is maybe caused by them being noisy at night or something like that.
“But we could have something like a 24-hour external concierge in the building to deal with the complaints. And if there are complaints, we could take the deposit from the occupants and contribute that towards the building’s management.
“On top of that, we’ll be able to help with security since we can get occupants’ details from booking platforms and we can also pass on details of service providers to security so that they know who is in the building,” says Oon.
HostAStay is also looking to work with hosts to increase demand for short-term rentals.
Oon notes that there have been increased supply of accommodations in the market over the past two years but tourist arrivals have not grown as fast. This is causing prices of accommodations to drop.
“We are working with hosts to provide experiences and new routes to attract more tourists. We are collaborating with travel agents from overseas market and creating loyalty programmes to help bring the tourists into Malaysia. We are doing this in support of our hosts. We are training them to offer guide and concierge services.
“Once we form a network, we can provide better services through our partners,” he says.
HostAStay is also looking at regional expansion. The company has been invited by its partners, which are booking platforms, to operate in other countries.
This augurs well for the startup as operating cost in Malaysia is high against low room rates.
HostAStay’s advantage, says Oon, is its strength in technology and its ability to localise solutions. Additionally, it has an insurance service provider, which is a big feather in its cap.
“The Malaysian market is not very big as tourism growth is slow. So we need to expand. But there are still opportunities locally.”
Some of the challenges that it may encounter in the larger market includes the language barrier, different visa requirements and the different currencies.
Regulation is another issue it has to contend with.
“I think it is a huge problem, particularly in the local market. There needs to be government regulation for this sector. Otherwise the community will self-regulate.
“We need to understand the pros and cons to short-stays. It’s a business. There should be things like paying of taxes and engaging building operators for consent,” he notes.
The company is expected to raise a round of funding next month through venture capital firms. To-date, it has raised about RM6mil through angel investors.
Oon is optimistic about the future as HostAStay focuses on its positioning in the industry.