Bloom hotels

We were driving around HSR Layout with our friend, and saw two Bloom hotel properties in close proximity, one in Sector 6 and the other in Sector 3. I've also unmistakably spotted another one on my way to and from the BLR airport many times. The hotel looks pretty good and a quick Google search shows up photos of good quality rooms, at good prices with good reviews. Pretty rare in this space.

Got me thinking if this mid-budget hotel chain will solve the customer problem through sheer good execution that Oyo seems to be failing at? The answer seems yes. 

First about Bloom.

1. This is not a new company. It was founded 13 years ago by relatively low key but well experienced founders including Tom Welbury, currently Chief Product Officer, and Shirish Saraf, early investor from Samena Capital.

2. In FY23, its filings show a revenue surge to Rs 144 crores, ~3x YoY, turning a profit of about 6 crores at an ROCE is 3%

3. It has pretty great reviews online, avg rating 4.7, even as most mid-range hotel aggregators struggle. 

Why is it a cut above the rest?

Currently, there about 45 hotels across 16 cities, far smaller than about 900+ FabHotels, 1000+ Treebos and 10,000+ Oyos in the country. 

This is in line with its core vision to be the best, and not the largest. It also means less in-fighting i.e. competition amongst Bloom hotels within the same market, and a better opportunity for the hotel owners to make money. From friends, I hear that many startups are now preferring Bloom vs. other budget hotels for employee stay during business travel. 

According to Welbury: "We have chosen to be disciplined in our selection criteria when it comes to hotel sites and developer partners. Even though this has meant slower growth we are ok with this as the aim is to be the best, not the largest. Quality always wins over quantity. In a typical month we look at over a 100 opportunities and shortlist maybe five for further discussions."

The key aspects of Bloom Hotels' business model are:

1. Quality Focus: Bloom Hotels emphasize providing high-quality hotel experiences. They aim to be the best, not the biggest, in the mid-market hotel segment.

2. Rapid Execution: Bloom has a team that can quickly build, convert, and launch new hotels, often completing projects in record time of about 3 months to up to one year. This is achieved through their obsessive design and project teams, as well as optimal expenditure through local sourcing.

I'm excited to see what Bloom achieves in the next 3 years. The path seems quite clear:

1. Continue to obsess over the quality of hotel experiences

2. Focus growth in Tier 2+ markets

3. Get the unit economics and execution sharper, drive higher profits.