Running a B&B? This cloud solution will make life easier for you
Hidden in Melaka, Malaysia, Softinn wants to reach out to small hotels, guesthouses and help them clinch more users through its reservation platformBy Elaine Huang 03 Apr, 2014
They want to serve hotels you’ve never even heard of. Lee Jee Shen and Lee Kien Zhang (Ken Lee) are Co-founders of four-year-old Malaysia-based startup Softinn, which provides small hotels, bed and breakfast (B&B), homestays and guesthouses a way to keep track of bookings, allotments and rates.
Its cloud-based reservation system and property management system helps smaller, more obscure businesses thrive in the era of the internet. In the past, a lot of these hoteliers would have to pass the opportunity to collect an upfront deposit for bookings as payment might be an issue, but now, they can easily do so.
Even though the startup has been around for four years, having started in 2010 as just a freelance project for a budget hotel in Melaka, the company was only incorporated in 2013. In the same year, the company also launched the official system. Within six months, Softinn managed to transact US$40,000 on an average a month.
Jee Shen told e27 about the two most urgent challenges the company is facing. He said, “(Firstly,) our brand … is not known to our target market now. (Secondly, it is about) the trust. We receive payments on their behalf on each booking, and then payout to hotels once at (the end of the month). Some of the customers feel uncomfortable with this.”
“We are open for funding to finance our business,” said Jee Shen, who noted that the company was bootstrapped since day one. There has not been a single drop of external investment. He added, “We need to manoeuvre the business precisely to make sure that the profit grows faster than cost.” By now, the duo had registered 37 hotels, served 494 bookings and transacted MYR 260,000 (about US$79,200). In terms of investment, Softinn is looking for angel and equity share investors.
By enabling direct booking, these business owners can also stop bigger online travel agents (OTAs) from eating into their margins with seemingly exorbitant commissions. At a glance, Softinn collects a fixed 12 per cent commission on each paid booking made with their solution. On the other hand, one hotelier told e27 that he pays Agoda 20 to 25 per cent in commission for each paid booking. In 2014, Softinn was also awarded the TripAdvisor TripConnect Partner.
At the moment, the team is made up of three permanent staffers and eight part-timers. Jee Shen pointed out that hiring is extremely important. When they had first started in 2010, operations was once halted no thanks to having the wrong team members and a unsuitable business model. He recounted, “When I first started, we (were) selling the app in license model and charged for setup fees; that business model doesn’t work on our target customers — independent hotels. Customer acquisition costs (were) high. Back then, I (didn’t) have the “hustler, hipster & hacker” combination. And more importantly, we were not familiar with the travel industry.”
While its biggest market is home country Malaysia, the firm is aiming to penetrate either Thailand, Indonesia or Australia. “We believe (that) that is the current growing market, and also because of their market size,” said Jee Shen.