How Pandemic Impacting Indonesia Kos Industry

How Pandemic Impacting Indonesia Kos Industry – Before the pandemic, finding a kos (Shared Housing) has become one of the most essential items on the to-do list when relocating to a different city in Indonesia. For decades, kos has been a part of young professionals and university students as they relocate to larger cities in pursuit of a higher education/starting their career. 

As larger cities mean larger opportunities to start their career, Jakarta (the capital city of Indonesia) has an influx of migrants from various cities in Indonesia. Due to the population influx and the continuous hike of property prices, rentals of kos have been an alternative for migrant workers and students who want closer proximity to its daily activities. In fact a survey done by Indonesia Property Watch states that 47.4% of Millennials in Indonesia would select kos as a housing alternative compared to living in an apartment or staying at their family house.  

Being an integral part of Indonesian young adults, kos has created its own ecosystem and a business opportunity for entrepreneurs. By renting out available rooms at their home, owners are able to receive a stable passive income and as the prospect of the industry grows, more individuals start to build dedicated kos buildings that are in close proximity to strategic locations such as universities, city centers and Central Business Districts.  

Tech entrepreneurs in Indonesia have realized the potential of the kos ecosystem which accounts for the number of various startups digitizing the country’s kos ecosystem in the past couple of years. From digital bookkeeping, online payments, property management software, listing platforms and managed properties various startups enter the market with different digital products. 

Mamikos started as a marketing listing platform, it has expanded to various services such as property management, digital bookkeeping and management software for owners. Currently, it serves 150,000 kos owners and 6 million users who are in search of their right kos, which makes it the leading software for the kos industry.  

However, as Covid-19 pandemic spread like a wildfire across the world, the kos industry has been impacted negatively. Even though the kos industry has become an integral part of young adults in Indonesia and was predicted to grow in the coming years, the spread of Covid-19 made renting a kos no longer deemed necessary for the majority of young adults. With new government regulations, people no longer have the need to be close to city centers or business districts. As most offices shifted to remote work, universities shifted to online learning, workers and students tend to go back to their hometown. This immensely disrupted the kos industry causing smaller startups to close down their operations. 

Mamikos itself has experienced a hit during the pandemic. Drop in traffic from prospective tenants and the drop in occupancy have also affected the kos owners that the company serves. As conditions improve, a recent trend of “work-from-Bali” has also shown how in the foreseeable future, local and affordable stays for longer periods may replace the need for long term rent at large metropolitan centres as more individuals prefer to be mobile. According to Brian Chesky (CEO of Airbnb), the demand for domestic accommodation has more than doubled on their platform, to over 80%. Almost 60% of customers now book properties up to 300 km from home, compared to only 33% in the pre-Covid-19 period. 

The Covid-19 pandemic has been described as the biggest crisis. In a matter of months, our world has been transformed in ways that we could have not imagined. As the pandemic is far from over and recovery of the kos industry is still uncertain. Given the increasing importance of the health-and-safety standards, we are likely to expect tighter control from the platform over its users on both the supplier and the consumer sides. As kos owners and individuals may also have their own restrictions and requirements, moving to a kos may not be as easy as it used to be. Platforms and its kos owners may have to adjust on their approach to accommodate a high demand for affordability and cleanliness. Also in a new era of remote and hybrid work/school models, the return of renting a room at a kos for a long period will likely be a personal decision for many individuals as they weigh the need to be close to city centers and universities.