Last Thursday, our Co-Founder and CFO, Ignacio Oroquieta Correro, had the pleasure of being part of the round table “High growth shenanigans” organised by Faraday Venture Partners, a club of private investors dedicated to finding and analysing projects for its members. The topic of the talk was to investigate the problems and vicissitudes that growing startups such as Le Room Service have had to overcome with respect to the current macroeconomic context together with the economic crisis caused by the pandemic, which has particularly affected sectors such as travel and retail.
During the talk we were joined by the CEOs of other high-growth Spanish companies: Iñigo Valenzuela CEO of Smartvel, Pablo Rabanal CEO of Reclamador, Federico Sainz de Robles CEO of Sepiia and Arturo Alvarez Podhorecka CEO of Renting Finders. They also shared the different value propositions of their respective companies and their experiences in adapting to the needs of the entrepreneurial ecosystem.
Keys to high growth and commercial success
Taking into account the problems that hotels face in managing an in-house room service, the main key to our growth has been to solve this global and real concern for the different hotel chains. The service is very labour-intensive and involves a very significant expense for hotels that do not have a kitchen service. In addition, for hotels that have room service, it means a disruption in the flow of food and beverage services (F&B).
The first differential step of our commercial success was to gain access to the large hotel chains in our country, exceeding sales by 70% and making the Food&Beverage service exponentially profitable. Despite our commercial activity being carried out in a very broad sector and in continuous development, collaborating with large hotels opened the doors for us to make ourselves known to the rest of the companies in the hospitality sector.
“Your own clients make you grow”.
Ignacio Oroquieta
Furthermore, we are not only growing in terms of the number of hotel chains that acquire our services, but also horizontally, integrating more comprehensive services for the F&B departments, giving the possibility of completing the hotel’s offer with breakfasts, events and lobby services, among others.
Main challenges to keep growing and continue with this trend
Our intention is to grow and expand along two lines. On the one hand, we are currently immersed in a process of international expansion, we have just opened a new branch in Lisbon and we are planning future openings in Paris and Berlin. Our main objective is to demonstrate that the problem of the profitability of this service in hotels is not only national, but that we are talking about a global problem that affects hotel chains all over the world. The first market studies and first indications show that this concern is exactly the same on a global level. In other words, one of our main challenges is to replicate this business model in different countries and cities with a high density of rooms per square kilometre.
On the other hand, the other line is to grow our services within the hotels, meet their demands and needs and offer them new features that improve the profitability of their business, achieving higher sales and adding value to the brand. Currently, we focus on both lines simultaneously, executing joint projects and growing both vertically and horizontally.
Key learnings during growth
Given the current environment, the key lesson we have learned during Le Room Service’s growth is that it is always necessary to conserve capital. Growing a company like this means that some expenses may be forgotten or revenues may decrease. A clear example of this was the economic crisis caused by the pandemic, when we had to completely stop our commercial activity for a few months, but fortunately we were able to overcome it with hard work and effort.
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