The travel industry is undergoing unprecedented transformation in the rapidly evolving digital age.
Yanolja, a company previously unknown to many, has grown from a budget hotel platform to a globally-recognized travel technology group, attracting the attention of major venture capital firms.
Its growth story is one filled with challenges and breakthroughs, driven by a relentless commitment to innovation and a keen understanding of market needs.
The company’s founder, Lee Su-jin, began his career as a bellboy in a love hotel.
In Korea, where young people typically live with their parents before marriage, love hotels provide a discreet escape for couples, offering privacy and independence, which in turn has contributed to the growth of the tourism industry.
However, love hotels have traditionally carried a negative reputation in conservative Korean society.
In 2004, a new law threatened to shut down the love hotel industry, but Lee Su-jin saw an opportunity to transform the image and services of love hotels aiming to attract not just couples but also business and family travelers.
So in 2005 he founded Yanolja, a name that in Korean means "Hey, let's play."
Initially, the business served as an online search portal and advertising platform for love hotels, helping hoteliers attract new guests.
Thanks to Lee Su-jin's sharp market insight and understanding of user needs, Yanolja quickly gained traction with Korean travelers, establishing a solid user base.
As Yanolja grew, Lee Su-jin broadened the scope of the business beyond love hotels to encompass a wide range of accommodation types, catering to a broader clientele.
Since then, Yanolja has made consistent technological strides.
In 2008, the company launched an app that made booking accommodation easy, further expanding its reach to a larger user base.
Yanolja has also developed B2B software services to help partner hotels automate check-in processes and other operational tasks.
The expansion of business and optimization in service quality have helped Yanolja strengthen its market presence. With an annual growth rate of 70%, the company now has a large number of partners, including almost half of the registered hotels in the country.
Beyond accommodation, Yanolja has diversified its offerings to include catering, activities, leisure tickets and transportation, aiming to create a one-stop travel platform.
In 2019, Yanolja became South Korea's eighth unicorn startup, valued at more than USD 1 billion. The company raised nearly USD 242 million in funding rounds backed by prominent investors including Softbank, GIC and Booking Holdings.
Yanolja has held an important position in the Korean travel market, becoming the largest OTA in the country’s accommodation sector.
The company has also accelerated its overseas expansion through acquisitions and organic growth. It has acquired Ezee Technosys, an Indian PMS system cloud provider, Go Global Travel (GGT), an Israeli B2B technology company, and Interpark, an OTA giant, to expand its business to international markets.
In the era of rapid development of science and technology in recent years, Yanolja focused heavily on cloud services and AI, and has achieved remarkable results.
In the second quarter of 2024, Yanolja Cloud's adjusted EBITDA reached KRW 21.1 billion (approximately USD 15.8 million) with an EBITDA margin of nearly 30%. Revenue from the cloud computing division grew 157% year-over-year.
Unlike many companies, Yanolja's data, cloud services, and AI technologies are tightly integrated, forming a robust ecosystem.
Jong Yoon Kim, CEO of Yanolja Group CSO & Yanolja Cloud recently told ChinaTravelNews, "Yanolja is not just doing simple business chain expansion, but trying to help customers improve their profitability and add value through the entire value chain. And share those profits."
First, Yanolja’s digitally transform suppliers like airlines and hotels, capturing high-quality data, which is then passed to sales channels and consumers. This approach helps create a secure data repository and powers the AI-driven dynamic pricing solution for travelers.
While some see potential conflicts in Yanolja’s roles as an OTA, hotel operator, and PMS provider, Kim sees no conflict:
"Yanolja's business model is very different from a traditional OTA or a hotel solution-only business because there is competition between them. They have to play a zero-sum game and sacrifice their profitability, but Yanolja provides the whole data flow from supplier, sales channel, wholesaler to consumer."
Therefore, he believes that Yanolja is playing a "win-win game" rather than a "zero-sum game."
While many label Yanolja as a super app, Kim disagrees, noting, "the super app is just a part of Yanolja's business, but any company wants to be a super app needs to rely on Yanolja's services."
There have been rumors about Yanolja preparing a U.S. IPO in recent months. Kim did not directly addressed these rumors, but he was confident that "Yanolja is committed to becoming a truly global company."
The company is actively expanding partnerships in China, Japan, Europe, and the U.S., with no signs of slowing down.
From a love hotel booking platform to a global travel technology pioneer, Yanolja’s journey is one of innovation, perseverance, and opportunity. As its cloud business continues to grow and its global strategy unfold, Yanolja is poised to take on an even greater role in the global travel technology sector.
On September 25, Jong Yoon Kim joined a fireside chat with TravelDaily China’s CEO Charlie Li, at the 2024 TravelDaily Conference in Shanghai, discussing the disruptive impact of AI on the travel industry.
