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(Yonhap Interview) Yanolja to enter Vietnam through startup: chief business officer

All Headlines 09:56 October 24, 2018

By Choi Soo-hyang

SEOUL, Oct. 24 (Yonhap) -- Yanolja Co., South Korea's leading hotel booking app, will make inroads into Vietnam through a Singapore-based startup later this year to establish a presence in the growing hotel booking business market in the Southeast Asian country, a company executive has said.

In July, Yanolja invested US$15 million in the startup Zen Rooms -- which operates franchise hotels and provides booking services in Indonesia, Malaysia, the Philippines, Singapore and Thailand -- in the first move toward a global expansion.

"We set up a research and development team in Vietnam two to three months ago to launch a Zen Rooms service within this year," Yanolja's chief business officer Kim Jong-yoon said during an interview with Yonhap News Agency at its headquarters in Seoul on Monday.

Yanolja currently holds a key seat on Zen Room's board and takes part in its decision-making process, though it did not disclose its stake in the Singaporean startup.

Yanolja has the right to wholly acquire the Southeast Asian startup, a deal Kim said "could be done in one or two years."

Founded in 2015, Zen Rooms operates over 1,000 economy hotel franchisees. Yanolja's aim is to raise the number to 5,000 around Asia, including its own brand hotels, by 2022.

Kim forecast revenues from Yanolja's overseas business to surpass those of its domestic sales down the road.

Yanolja posted 100 billion won (US$88 million) in sales in 2017, up 47 percent from a year ago. Kim said the company's revenue is expected to double this year.

Still, the company's operating loss widened to 11 billion won in 2017 from a loss of 3.5 billion won a year earlier due to its business expansion.

Kim said Southeast Asia's hotel industry is similar with what South Korea's hotel industry looked like three to five years ago.

"Only hotels, or only one out of 10 accommodation options, in those countries are digitalized," said Kim. "What we are doing is to digitalize the rest."

The chief business officer said nearly half of all accommodation options in South Korea can be booked online now.

"Our goal is to provide a better service for local travelers in Southeast Asia. Of course our service will be used by Koreans visiting the countries too, but that would be only about 10 percent of the total," Kim said.

Yanolja is eyeing the Vietnamese and Filipino markets, among others, where many companies are open to Korean culture, he said.

"Zen Rooms is our first step. We are in talks with a number of other firms in the region," Kim said. "More mergers and acquisitions and partnership deals will be announced in the near future."

The latest expansion comes as the South Korean hotel startup pushes for an initial public offering.

Founded in 2005 as a motel information portal, Yanolja has grown into a major hotel business company that now also operates its own hotel brands and provides design and construction services for other accommodation businesses.

"It depends on our financial circumstances. For now we think sometime between 2020 and 2021 will be the most appropriate," Kim said, referring to the timing of the IPO.

In this photo, provided by Yanolja Co., its chief business officer Kim Jong-yoon speaks during an interview with Yonhap News Agency at its headquarters in Seoul on Oct. 22, 2018. (Yonhap)


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