Korea’s billion-dollar travel group Yanolja is investing additional funds in ZEN Rooms and acquiring stakes from early investors. With this development, ZEN Rooms is forming a strategic alliance with one of the most technologically innovative travel companies in the world and will use technology to revolutionize the hospitality industry in Southeast Asia.
ZEN Rooms recently announced that it has signed a definitive agreement with Yanolja for additional investments, as well as the purchase of early investors’ stakes in the company and the signing of a strategic alliance between the two partners. Early investor Asia Internet Holdings – a joint venture between Rocket Internet and Ooredoo Telecom – has agreed to sell its stake in ZEN to Yanolja, while SBI Korea and RedBadge Pacific remain as investors.
Yanola is the leading travel group in South Korea and is backed by Booking Holdings and GIC. Last year, the company invested $18 million in ZEN Rooms with the rights to invest further.
“We started ZEN exactly four 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 first international investment,” Nathan Boublil, co-founder and CEO of ZEN said. “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 and 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.”
“Since first investing in ZEN, we have shared the same vision of operational excellence and customer centricity to radically improve the Southeast 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,” Jongyoon Kim, CEO of Online Business at Yanolja said.
The alliance of ZEN and Yanolja creates the leading economy and mid-range hospitality group in Southeast Asia. The partnership combines ZEN’s top-rated budget hotel franchise business with Yanolja’s scale, hospitality technologies, and the backing of the global leader in online travel, Booking Holdings (the company behind Booking.com, Agoda, Priceline.com, Kayak, among others), giving ZEN Rooms a unique competitive advantages in both hotel technology and sales distribution. The two partners will work together to utilize automation technology to enhance customer experience, further reduce budget hotels’ operating costs, and reinvent budget hospitality across the region.
ZEN Rooms is now one of the largest budget hotel chains in Southeast Asia, with 13,000 rooms under its wing. Since Yanolja’s investment last year, ZEN has increased its revenues by 400% and has become the largest hotel chain in fast-emerging Philippines in the second quarter of 2019, 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. For instance, the number of Chinese tourists has quadrupled in the past decade. However, the value-for-money proposition of the budget hotel sector in the region has historically been defective, plagued by problems such as fragmentation, poor hygiene and 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.
With a deep emphasis on customer satisfaction, ZEN franchisees have enjoyed the best average guest ratings on Booking.com for two years in a row.