Singapore-based RedDoorz broke even in its key markets – Indonesia and the Philippines – in the fourth quarter of 2022. The hospitality startup told Tech in Asia that the two markets contributed 95% to total revenue, but it didn’t divulge specific details.

The Asia Partners-backed firm further expects to break even in all its markets by the fourth quarter of this year. RedDoorz is present in four markets in Southeast Asia, including Thailand and Vietnam.

Amit Saberwal, founder and CEO of RedDoorz / Image credit: RedDoorz

CEO and founder Amit Saberwal attributed the milestone to the doubling of the company’s property footprint last year. RedDoorz increased its property count in Indonesia and the Philippines by nearly 12% and 43%, respectively.

“The ability to breakeven at a country level (including all headcounts) is a great proof point on how our business model can work in a sustainable and scalable way in our largest markets,” says Saberwal.

The company, however, reduced its properties in Vietnam by 37% due to what Saberwal calls the country’s “draconian pandemic restrictions,” which has hit the business. “With a better macroeconomic outlook in Vietnam in the coming year, we expect to grow our business further,” he says.

RedDoorz’s earning ancillary revenue, “which now contributes to 30% of overall business,” also helped the company break even in these two markets, according to Saberwal. This revenue comes from offering microproducts such as early check in or late check out, paid loyalty program, insurance, flexible cancelation policies, and breakfast, among other services.

The company didn’t disclose its revenue but said its take rates – commission from each transaction – grew by 2x from 2020. RedDoorz added that it only needs to increase its take rates by 1.5x to achieve its breakeven target for Q4 2023.

The company’s financials for the last two years aren’t available on the website of Singapore’s Accounting and Corporate Regulatory Authority (ACRA). But VentureCap Insights data shows that RedDoorz’s revenue surged 57% to hit US$23.7 million in 2020, growing despite the impact of the Covid-19.

In an earlier Tech in Asia interview, Saberwal attributed this growth to more diverse revenue streams and the recovery of domestic travel in Southeast Asia.

RedDoorz also cut its expenses by increasing automation. Its operating expenses (opex) in 2022 were at 60% of the amount in 2019, Saberwal says. Without sharing details, he says that while the opex was initially cut in 2020, the firm has gradually increased it to invest in growth opportunities.

See also: How hospitality startup RedDoorz saw record revenues despite Covid-19

The company is looking to add over 1,500 hotel properties across its four markets this year. “After the pandemic, owners are realizing the importance of being part of a branded hotel chain,” observes Saberwal. He believes that RedDoorz’s strong brand presence and use of technology make being part of its network an attractive proposition for many.

The company is also setting its sights on new markets such as Malaysia. Its future plans also include expanding into Thailand and Vietnam as well as Bali in Indonesia.