At the Connecting Ideas With Money session that took place on the 11th of April, 2023 founder Sidharth Somana pitched pre-seed Raho Hospitalities – a Bangalore-based startup that provides quality, standardized stays in non-urban vacation destinations for low to middle income travelers.
“Existing hotels….rooms in non-urban vacation destinations in India are either poor quality or overpriced. We plan to solve this by addressing factors that determine the pricing of hotel rooms….initial capital expenditure and operating costs. Our hotel units are low cost, prefab units that are placed on leased land,” says Sidharth. “Operational efficiencies are achieved through constant iteration and data collection.”
The founders and some friends decided to meet in Coorg and have a new year’s celebration. While it was a
wonderful trip, they were surprised at the poor quality of stay options. This led them to start Raho. The team reports that the startup has done well in the past 8 months, with occupancies of 85%+ and a projected profit of Rs. 6 lakhs/unit annually.
Raho considers itself to be an asset light company. They do not own the land that they install their units on, they lease it. The operations are made efficient such that they can service 10 rooms with just 5 staff, including kitchen operations. This is low when compared to standard hotels that use up to 8 people for the same number of rooms.
“We plan to bundle units and sell them to investors while continuing to operate the asset so that we can stay asset light and use our resources for expansion. Our moat against competitors is that we will have a first mover advantage,
operations at scale, large amounts of data to improve operational efficiencies and meet customer expectations,
build a strong brand identity …as a hospitality chain that defines the space,” says Sidharth.
“Our prefabricated unit is a not a commodity and is not available on the market. It is designed using in- house expertise. Other prefab units do exist but are generally not made for the purpose of hotels and are of a lower quality. They take 3 months to manufacture. The steps involved in the process are: 1) Manufactured in a factory 2) Site preparation to receive units 3) Transported to site on a flat bed and installed 4) Final finished, furniture, and equipment installed.
Team:
The two cofounders are twin brothers – Gautham and Sidharth Somana and the third cofounder, Simona Mohan is a friend.
