A recent post about KeaBabies caught my eye — thanks to a friend’s share — and it’s one of those rare digital success stories that deserves a closer look.
KeaBabies, a Singapore-based direct-to-consumer baby essentials brand, has scaled to a $100 million SGD business in under eight years. They’ve done it with:
- Gross margins of ~30%
- Net profit margins of 10–11%
- Just 10% of revenue is spent on marketing
- No external investors
- 100% ownership retained by the founding couple
- Estimated $25–30 million in retained earnings
Much of this success has come despite paying fees to Amazon, where most of their volume is transacted. In hospitality terms, think of Amazon as their OTA.
And yet — they’ve retained control of their pricing, their brand, and their growth strategy. It’s not unlike the rise of Secretlab, the Singapore-based online furniture company that now generates over $300M in annual revenue, with a similar lean model.
So what does this have to do with hotels? Actually, quite a bit — and the parallels below might surprise you.
Highlights
Rethinking Sales & Marketing Spend in Hotels
In top hotel markets like Singapore, Sydney, London, and New York, the average property spends about 6.5% of total revenue on Sales & Marketing. Roughly 35% of that goes to team salaries.
At first glance, that appears more efficient than KeaBabies’ 10% marketing spend. But here’s the key difference: most hotels heavily rely on third parties — namely OTAs — for bookings. And those OTA commissions (typically 15–25%) aren’t usually bundled into Sales & Marketing, even though they’re absolutely part of customer acquisition cost.
To put it in context: here’s how much OTAs are spending on marketing in 2024.
| Company | Marketing Spend | % of Revenue |
| Trip.com Group | $1.6B | 20% |
| Airbnb | $2.1B | 19% |
| Booking.com | $7.3B | 31% |
| Expedia Group | $6.8B | 50% |
In other words, when we pay OTA commissions, we’re funding their global marketing flywheel — the very engine that drives guests to our doors.
SG&A Benchmarks Across Industries
For an even broader context, here’s how other industries compare in Selling, General & Administrative (SG&A) costs, per Prof. Aswath Damodaran’s January 2025 data:
- Education: 27.5%
- Pharma: 22.8%
- Soft Beverages: 22.7%
- Entertainment: 21.4%
- Computer Services: 15.3%
- Apparel: 11.9%
- Hotels: 6.5%
- Coal & Energy: 4.6%
Hotels fall toward the lower end of the SG&A spectrum — but is that because we’re efficient? Or because we’ve outsourced too much of our guest acquisition and brand equity to third parties?
What Hotels Can Learn from KeaBabies
Here are three core takeaways:
1. Efficiency Isn’t Just About Cost — It’s About Control
KeaBabies pays Amazon fees (just as hotels pay OTA commissions), but they’ve retained control over pricing, customer experience, and brand identity. That’s the real definition of operational efficiency — not just spending less, but owning more of the journey. Many hotels have ceded that power — often without realizing what they’ve truly given up.
2. A 10% Marketing Spend Isn’t “High” — It’s Intentional
It’s not about how much you spend — it’s about what that spend delivers. KeaBabies proves that sharp, focused marketing can drive exceptional growth with lean teams and disciplined execution. For hotels, this is a reminder: efficiency isn’t about doing less — it’s about doing the right things better. ROI should lead the conversation, not budget caps.
3. Alignment Beats Complexity
With no external investors, KeaBabies’ founders retain all earnings and make decisions with long-term clarity. In contrast, hotel ownership structures often include operators, brands, and capital partners — each with their own KPIs, timelines, and pressure points.
That complexity doesn’t just slow things down — it can dilute accountability and stall progress. Simpler alignment often means sharper execution.
Final Thoughts: Borrowing Lessons from the D2C Playbook
KeaBabies isn’t a hospitality company — but its trajectory underscores some universal truths about efficiency, clarity, and long-term value creation.
Success doesn’t always require massive teams, high-profile agencies, or VC headlines. Sometimes, it’s built on sharp strategy, lean execution, and relentless focus.
Hotels may not be direct-to-consumer brands — but in a market where control and connection matter more than ever, it might be time we start thinking a little more like them.
Editor’s Note:
This article, originally titled “What Hotels Can Learn from KeaBabies’ $100M Success Story,” was contributed by Pierre Marechal, Vice President of Strategic Advisory & Asset Management at JLL. He advises hospitality investors and operators across Asia-Pacific on asset performance, revenue strategy, and commercial transformation.
Views expressed are the author’s own. To pitch your story or share insights on hospitality, leadership, or business in Asia, contact the NIA editorial team.
Highlights
Read the Chinese article here.
