Korea’s billion-dollar travel group Yanolja doubles down on ZEN Rooms to create future of hospitality in Southeast Asia

Yanolja, the Korea’s billion dollar travel group, is doubling down its investment in Southeast Asia budget hotel franchise  startup, ZEN Rooms. The deal comes a year after Yanolja invested US$15 million in Zen Rooms, with the right to fully acquire the latter in the future. The total amount of the latest investment was not disclosed. Through this transaction, Yanolja is investing additional funds in the Company, purchasing stakes from early investors and announcing a wide strategic alliance between the two groups. ZEN will use the funding to deploy technology to continue to improve Southeast Asia’s hospitality sector, enhance customer experience and lower hotels’ operating costs .

In June, we wrote about Yanolja when the South Korea’s largest online travel platform raised $180 million in Series D funding at more than $1 billion valuation. Yanolja is Korea’s No.1 leisure platform leading the industry in providing travelers with real-time travel –and –stay booking services connecting them to a comprehensive database of hotels, motels, private lodgings, guesthouses, and international accommodations.

The alliance of ZEN and Yanolja creates the leading economy & mid-range hospitality group in Southeast Asia. It combines ZEN’s top-rated budget hotel franchise business with Yanolja’s scale, hospitality technologies and the backing by the global leader in Online Travel, Booking Holdings (behind Booking.com, Agoda, Priceline.com, Kayak etc), thus granting ZEN unique competitive advantages in both hotel technology and sales distribution. The groups will work to heavily deploy automation technology to enhance customer experience, further reduce budget hotels’ operating costs and reinvent budget hospitality across Southeast Asia.

Founded in 2015 by entrepreneurs Kiren Tanna and Nathan Boublil, ZEN Rooms was founded to improve the state of budget hospitality in Southeast Asia, making travel more affordable and safer. ZEN is now one of the fastest growing hospitality companies in the region, the #1 hotel chain in the Philippines and Top 3 budget hotel chain in Southeast Asia. ZEN helps budget & mid-range hotels operate more efficiently and increase the value of their property through a range of operational & technological solutions.  ZEN Rooms is today one of the largest hotel franchises in Southeast Asia, with 13,000 rooms under franchise. Since Yanolja’s investment in mid 2018, ZEN has grown revenues 400% and has become in Q2 2019 the largest hotel chain in fast-emerging Philippines, with 5,500 rooms under franchise.

Southeast Asia is today the world’s fastest growing travel market, fueled by exponential domestic and regional demand of young travelers and millennials (e.g. the number of Chinese visitors has quadrupled in the past decade[1]). Yet, the value-for-money proposition of its budget hotel sector has historically been defective, plagued by several issues: fragmentation, poor hygiene & safety standards, lack of training and low technology use.
ZEN was founded in 2015 to improve the state of budget hospitality and bring much needed operational and technological efficiency to the estimated 2 million independent economy rooms in the region. Thousands of hotel owners have since joined ZEN’s franchises to improve their revenue, optimize their cost base and increase the long-term value of their property. These efficiency gains ultimately benefit travelers who can enjoy safer and better value-for-money stays.

“We started ZEN exactly 4 years ago to make budget accommodation in Southeast Asia more affordable and safer. We have proudly built ZEN into the top-rated budget hotel franchise in the region and were honored to be Yanolja’s 1st international investment. With this strategic alliance, we are joining forces with one of the most technologically innovative travel groups and its unique backers Booking Holdings to create the first full service budget & mid-range hospitality group in SEA, able to deploy world-class technology infrastructure in IoT R&D, automation, hardware and software to all hotels in Southeast Asia. This alliance will greatly benefit our ability to serve our hotel clients and ultimately the travelers of the entire region,” Nathan Boublil, co-founder & CEO of ZEN, said.

Jongyoon Kim, CEO of Online Business at Yanolja, added: “Since first investing in ZEN, we have shared the same vision of operational excellence and customer centricity to radically improve the SE Asian hospitality market. In the last 12 months, the ZEN team has taken major steps to fulfill this vision and has grown exponentially while displaying top inventory quality. With this exciting agreement, Yanolja plans to fully support ZEN to solidify its status as the market leading full-stack hospitality company in the region.”