Husband and wife team and founders of website Roomorama, CEO Federico Folcia and COO Teo Jia En. TODAY file photo
Tough competition, strict regulations cited as reasons for closure
SINGAPORE — Faced with intense competition and tighter regulation, Singapore-headquartered home-sharing platform Roomorama.com — which once boasted an inventory of hundreds of thousands of properties around the world, ranging from villas and designer homes to castles and even caves — has ceased operations.
Set up in 2009 by Singaporean Teo Jia En, 35, and her Italian husband Federico Folcia, 38, Roomorama announced last week on its website that it has stopped accepting bookings, while it mulls over its future.
“Increasing competition and regulatory headwinds have made it ever more challenging to operate in this industry,” it said, adding that all existing bookings will be honoured.
Roomorama is the second high-profile casualty in the industry here. In late-2015, PandaBed was shut down after only three years. Following Roomorama’s announcement, there are three major players left in Singapore: Airbnb, HomeAway and MetroResidences.
Founded in August 2008, Airbnb is the largest global home-sharing rental platform, and the United States-based company — which set up an office in Singapore in 2012 — was valued at US$30 billion (S$41 billion) as of last year. In 2013, Nasdaq-listed HomeAway acquired homegrown start-up travelmob to establish a presence here.
Roomorama and HomeAway did not reply to TODAY’s queries, while Airbnb declined to comment.
MetroResidences was started by Mr Lester Kang, 34, in 2014, who was previously co-founder of PandaBed. Speaking to TODAY, he cited the challenges for local players, including the regulatory restrictions and the need for deep pockets to challenge the big boys.
“In the retail e-commerce business, you need a lot of money to build a strong brand perception to compete with a global player like Airbnb,” he said, noting that PandaBed did not succeed because of the huge financial outlay needed to gain customers.
Last month, the Urban Redevelopment Authority (URA) lowered with immediate effect the minimum stay in private housing to three months, from the previous six months. The revision applies to all private residential properties, and stay durations of less than three consecutive months, including short-term stays — such as those facilitated through home-sharing platforms — continue to be disallowed. Separately, the URA is reviewing possible guidelines to facilitate short-term rentals and intends to conduct a public consultation to seek feedback on the issue.
Mr Kang noted that in other places such as Japan and Hong Kong, the minimum duration was one month. In order to survive, MetroResidences is seeking to carve out a niche, by targeting business travellers. “We felt that no one else was doing anything similar, which is connecting companies with homeowners. We are about 30 per cent cheaper than branded serviced apartments, and our list of apartments is carefully curated, as compared with Airbnb listings, where the quality can vary a lot,” said Mr Kang. To date, MetroResidences has 400 listings, with about 800 corporate clients.
Roomorama’s woes came after a spectacular rise: In April 2012, Roomorama merged with Europe-based Lofty.com, a move that boosted its stable of properties to more than 300,000. The deal also saw the company receiving US$2.1 million.
Analysts TODAY spoke to noted how the development of the home-sharing sector mirrored the fortunes of the ride-hailing industry, where the cut-throat competition has caused companies to exit the Singapore market.