Only recently have we noticed new coworking space launches in Klang Valley slowing down. Considering the pandemic and travel restrictions, it makes sense.
If you’re already familiar with coworking spaces, you’re probably also no stranger to coliving spaces (which may or may not have their own coworking spaces). These can also be easily found in the Klang Valley.
So what can you do when you want to launch a combination of the two concepts, but not within such a crowded space? You can take a page from Badzlan Bakar and Syaiful Adam’s book and throw it in Kelantan.
His concept turned out to be a coworking space plus a hotel called Hotel Rihla at Gua Musang, but this barely scratches the surface of what they actually have planned, as explained later.
A calculated experiment
Badzlan was previously a member of the cabin crew and later became a sales strategy leader for the AirAsia group. He had also worked with Microsoft APAC before for about 3 years. With his experience, he drives marketing and strategy as CEO.
Syaiful, on the other hand, was previously an architect and led ecotourism development in Gua Musang. He is now in charge of construction and operations as the director of operations at Rihla Hotel.
While neither of them have experience in the hotel or coworking business, both founders are avid travelers and backpackers. This, Badzlan shared, taught them a thing or two about how to make people love the Rihla Hotel.
Gua Musang is the largest district in Kelantan and is actually a tourist attraction given its rich flora and fauna.
“Gua Musang has an ecotourism asset, which is our anchor to attract foreign travelers who also want to do remote work,” Badzlan shared with Vulcan Post. For example, he projected that those in Chiang Mai or Bali could spend 2 weeks or a month to do their remote work.
He explained that his choice of Gua Musang is also because it is cheap to experiment with his new idea there. His debut at Gua Musang in February 2020 was just an MVP, and Badzlan shared that this experimentation is aimed at building replicable models at duty stations.
The goal is to digitize operations
“Our end goal is not really the hotel itself. It is the software that we are building to connect all these establishments, [which we’ll] then sell globally as a SaaS subscription model, ”emphasized Badzlan.
“This is the key to our 10th year IPO.”
The software they are working on is a product and application system (SAP) infused with artificial intelligence for hosting.
Dictionary time: SAP is made up of individual modules that perform various organizational system tasks. At the heart of the system, it executes business logic, is responsible for processing customer transactions, printing jobs, running reports, coordinating database access, and interacting with other applications.
“We do not intend to be a market platform like Airbnb and we do not intend to evolve that way,” he clarified. “We want to focus on understanding how operations in our stores work and connect, and then digitize them.”
“The end result of this would be C-level (ourselves) and mid-level management fully managing the business from our laptops or on our phones,” Badzlan said.
Badzlan and Syaiful are already doing this at the moment as there is no other staff in charge of the place other than a cleaner who works 4 hours a day. “My partner and I are now managing random coffee check-ins, communications and outings around Gua Musang.”
The types of establishments they would like their software to cover include hotels, coliving, and coworking spaces. “We are thinking of adding cafes to the list, as hotels come with cafes. But that will be after we understand how these first 3 establishments work with our AI, ”added Badzlan.
Downtime = opportunity
Starting a space like this during the pandemic seems risky for obvious reasons, but the duo explained that this downtime allows them to experiment. And despite tighter cash flow, Badzlan said it was still positive.
RM200K was invested to power this business, most of which came from Badzlan’s savings when he worked for Microsoft. “Half of the investment in the coliving space also came from my mother, for which I will be eternally grateful,” he said.
They also saved a lot on construction costs because they hired a local builder and were personally involved on site with painting, electrical wiring, etc.
The fact that 70% of their operations are automated also helped. Badzlan shared some tips: “Make full use of the available technology around us and be very disciplined with costs. And if technology is in the equation, profitability will come naturally. “
A done and feasible expansion model
“Our expansion model is simple. 3 establishments in each city with an average of 30 to 50 rooms, and maintain a year-on-year revenue growth rate of 30% and a profit margin of 30%. Done and doable, ”Badzlan confidently shared with the Vulcan Post.
The duo also proudly stated that despite the pandemic, they are on track to double their income and are reinvesting to triple it. Currently, they get 93 bookings per month on average.
With the money raised from the IPO 10 years into their trip, they want to penetrate Chiang Mai and Bali, with the goal of having at least one establishment in each ASEAN country.
“And it’s not just about the physical accommodation business,” Badzlan reminded us. “The software business will be key to our success. It’s scalable, network-driven, and geo-independent. And coming from the world of Microsoft software and technology, the market is at stake. “
- You can get more information about Rihla Hotel here.
- You can read about more coworking spaces we have covered here.
Featured Image Credit: Badzlan Bakar and Syaiful Azam, Founders of Rihla Hotel