Budget hotel chain Treebo eyes international expansion with its new SaaS vertical

Like most hospitality startups, Bengaluru-based hospitality startup Treebo Hotels, which was founded in 2015, hit a rocky patch amid the COVID-19 pandemic.

Sidharth Gupta, Co-founder, Treebo Hotels and Hotel Superhero, says the travel and hospitality sector was heavily impacted by the pandemic, but things are improving and a steep recovery has been noticed in the last few months. The leisure travel category is dominating the wave of recovery.

“People in metros and other cities are opting for staycations and are heading out on weekends to just break the monotony at home,” he says.

Treebo’s booking values have grown 10x in the last six months, and Sidharth expects to see “a nearly full recovery in the sector”.

In June 2021, the hospitality startup raised a $16 million round led by Accor, is one of the largest hospitality groups in the world.

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A significant amount of the capital is being used to support the losses the company is incurring at the moment. A large portion of the funds are also being used to grow and build Treebo’s new SaaS vertical, Hotel Superhero, which was started amid the pandemic and is a platform that intends to empower small to medium size hotels across India. With Accor signing up as a client, Hotel Superhero is all set to kickstart the business in the industry.

Now, with things looking better, Treebo plans to reinvest in the sales and marketing functions to establish the brand, Sidharth says.

“We are deploying more resources on the ground, and are adding to our supply. We will be investing in growth and looking to raise more capital in the times to come,” Sidharth says.

Investing in growth

The founder says Treebo is already present in close to 100 cities, covering most major travel destinations. The company is currently at a scale of around 500 properties and anticipates scaling to double the supply by next year.

“In terms of our footprint, I would expect these 100 cities to grow to reach 120-130 cities. However, the bulk of expansion will come from us deepening our presence in existing cities,” he says.

Sidharth explains that their new venture, Hotel Superhero, is already an international business and this vertical is being used by many properties outside of India.  

“That business is meant to be, by its very nature, a SaaS business, an international business,” Sidharth says. He adds that the team has international ambitions for Treebo as the business model is applicable in a wide range of countries. The company plans to look at international expansion after turning profitable - expected to be around June 2022.

Speaking about revenue targets, Sidharth says the team is very excited about India’s growth potential. International expansion may be the long-term plan but India will continue to be a big focus area for Treebo.

The company - currently at 500 properties – aims to take that number up to 3,500 properties. This will translate into annual booking volumes of Rs 3,000-3,500 crore per year, and revenues of Rs 600-700 crore.

“I do see India as the primary source of growth for us with a lot of headroom left in the hotel market here,” Sidharth says.