ZEN Rooms Sells Part of Share to South Korean Hotel App Network Yanolja

ZEN Rooms network budget hotels operating in Southeast Asia reported have sold part of their stake to South Korean hotel app chain Yanolja. With a total fund of $15 million, Yanolja paid for "strategic non-controlling stake" which is kept a secret -- but it's still possible for Yanolja to get 100% of ZEN Rooms' shares in the future.

Founded in 2015, ZEN Rooms successfully raised $4.1 million in series A funding from Redbadge and SBI Investment Korea. Three years of ZEN Rooms running, specifically In March, it was reported that ZEN Rooms was facing serious financial problems and wanted to sell or close its services. The purchase of some shares by Yanolja will provide fresh funds for ZEN Rooms to be able to survive and strive to develop.

"We now have the capital to invest. The deal has been under discussion since the beginning of this year ... we treat it like an acquisition but this is the first step," ZEN Rooms co-founder Kiren Tanna told TechCrunch.

In Indonesia industry budget hotels currently included in "natural selection", fierce competition between players is enlivened by competition with OTAs (Online Travel Agents). This condition causes the service must be able to survive by meeting the needs of local customers or leaving.

NIDA Rooms, for example, has quietly ceased to operate in Indonesia by withdrawing their application and booking site. A similar condition can happen to ZEN Rooms if it fails to meet the needs of local customers. Despite the need for budget hotels still high.

Refers to survey report which is issued DailySocial last year, budget hotels is still the choice of many respondents. A total of 58,61% of respondents chose budget hotels, with price as the main comparison. The problem is, in Indonesia OTA players such as Traveloka, Tiket, and so on also include hotel lists budget into their search. This certainly helps regular customers not to network budget hotels operating in Indonesia. Competition is now more narrowed down to the quality of service, including price.

Now in Indonesia, budget hotel chains have ZEN Rooms, RedDoorz, Airy Rooms and several others. They will deal directly with OTA service providers who also sell hotel rooms at affordable prices. With the investment received by ZEN Rooms, it is worth waiting for what they will do for the Southeast Asian market, including Indonesia with the current competition.