ZEN Rooms, one of the leading economy and mid-range hotel franchises in Southeast Asia today, announced that it had signed a definitive agreement with travel group Yanolja regarding additional investment, acquisition of early investors’ stakes, and the signing of a wide strategic alliance. Yanolja is the leading travel group in South Korea, backed by Booking Holdings and GIC, among others. Yanolja was the lead strategic investor in the company’s US$15M funding round in 2018, with rights to invest further. Early investor Asia Internet Holdings (Joint Venture of Rocket Internet and Ooredoo Telecom) has agreed to exit its stake to Yanolja. RedBadge Pacific and SBI Korea remain investors, and Access Ventures join as co-investors.
The alliance of ZEN and Yanolja creates the leading economy and 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 and booking holdings (behind Booking.com, Agoda, Priceline.com, Kayak etc.). This grants 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.
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 became the largest hotel chain in fast-emerging Philippines in 2019, with 5,500 rooms under franchise.
Today, Southeast Asia is 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). Yet, the value-for-money proposition of its budget hotel sector has historically been defective, plagued by several issues: fragmentation, poor hygiene and safety standards, and 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.
“We started ZEN exactly 4 years ago to make budget accommodation in Southeast Asia safer and more affordable. We have proudly built ZEN into the top-rated budget hotel franchise in the region and we are 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 and mid-range hospitality group in SEA. We can 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,” said Nathan Boublil, co-founder and CEO of ZEN.
Jongyoon Kim, CEO of Online Business at Yanolja, also shared his thoughts on the agreement. “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.”