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Treebo shrugs off Covid blues, eyes full recovery by the end of 2021  

Hospitality startup gets a boost as competition watchdog directs MakeMyTrip, the country’s largest online travel agency, to relist Treebo properties. MakeMyTrip had de-listed Treebo and FabHotels properties in 2018 following an agreement with Softbank-backed Oyo 

March 11, 2021 / 12:07 PM IST

Budget hospitality chain Treebo, which counts Matrix Partners, Elevation Capital, and Bertelsmann India as investors, has seen 60 percent of its business come back and expects a full recovery by December 2021, co-founder Siddharth Gupta told Moneycontrol.

“With a reduction in new Covid cases and vaccination momentum building up, we are seeing the return of demand for hotels. We have already recovered 55-60 percent in terms of occupancies compared to pre-Covid levels. We are expecting a full recovery both in terms of prices and occupancy by November-December,” Gupta said.

He spoke days after Treebo received a boost from a Competition Commission of India (CCI) directive that allowed Treebo and its rival FabHotels to relist their properties on MakeMyTrip, the country’s largest online travel agency. MakeMyTrip had de-listed the two hospitality startups in 2018 following an agreement with Softbank-backed Oyo.

This has come as interim relief during an ongoing probe, following a complaint by the Federation of Hotel and Restaurant Associations of India and subsequently by Treebo and Fab Hotels last year.

“We are looking forward to working with MMT-GO. We valued that partnership when we were working together. In the current circumstances, even more so. Access to their platform is important for us,” he said.

The company had filed for interim relief last year, and on March 9, the competition watchdog directed the companies to comply.

Unlike larger rival Oyo, Treebo started off with a full-stack model wherein it would sell all the rooms of a hotel on its platform. Oyo, on the other hand, has always experimented with multiple models, including select inventory, minimum guarantee and franchisee, among others.

Emerging from COVID battering

The pandemic has been hard for the hospitality industry with people curbing travel following a nationwide lockdown that was announced a year ago. Even after the government-imposed restrictions were lifted, people have remained cautious and avoided outdoor activities.

However, months of restrictions and isolation at home combined with optimism around vaccines has led many to step out for small vacations to off-beat locations and small boutique hotels.

“Usually February and March are relatively slower months but we are still seeing good traffic during this time of the year, indicating recovery momentum,” said Gupta. The company currently has around 12,000 rooms across 500 properties

Eye on more revenue

The hospitality firm, which recently raised $7 million from some angel investors and existing backers, is again adding 20-25 properties every month. It is aiming to reach 800-850 in the next two years with an average capacity of 20-23 rooms.

It has also relaunched its software for services business, which helps hotels manage their technology requirements. Treebo, which had started this product to cater to the requirements of its own hotels, has now started to sell it to other hotels with the aim of expanding revenue.

The company, which had offered a paid voluntary resignation scheme to around 250 employees at the height of the pandemic, has now started to re-hire them. “Around 40 people have joined back. This includes some who had already started working in different organisations,” said Gupta, adding that the hiring has happened in the operations and sales departments.

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Priyanka Sahay
first published: Mar 11, 2021 12:07 pm