French Hoteliers Gear Up to Change PH Hotel Industry with Budget Rooms

2017-10-17T13:54:26+08:00 February 3rd, 2017Newsbreak

Posh hotel rooms in premium locations like Cebu, Boracay and Manila for budget prices as low as P850 per night. This is what two young Frenchmen of Rocket Internet SE of Germany offer clients, contributing to the changing landscape in the country’s accommodation industry.

According to Nathan Boublil, “Our mission is to be the best budget hotel brand in the Philippines and in general Southeast Asia.  What is happening in Southeast Asia is that traditionally, budget hotels are either unprofessional or expensive, and so we are coming with a disruptive brand that is essentially rationalizing the market.” Boublil, 31, is global managing director and co-founder of Zen Rooms.

What Is Zen Rooms?

Zen Rooms is a group or network of branded hotels offering budget or affordable accommodation but guarantees world class standards. A major player here is Rocket Internet as a major investor. Among Zen Rooms’ signature offers are free Wi-Fi connection, clean and comfortable beds, air-conditioning, hot shower plus 24/7 customer service.

Zen Rooms aims to shake or disrupt how the hotel business is often inefficiently done in the country. “I don’t know why it has not been disrupted before.  It is full of inefficiencies and that is why the prices are so high.  The value for money ratio is one of the worst in Southeast Asia,” Boublil says.

“First and foremost, it is our company culture.  Our investor, Rocket Internet, has the culture of speed, culture of disruption. We move fast and break things.  The founder of Rocket Internet operates this way and we definitely operate this way.  All our team is young and energetic and working very hard.  That’s the difference from the traditional budget hotel market,” he added.

“Zen” means being free from stress, says Boublil.  “It is all about budget stay, but with the quality that is guaranteed.  You have that reliability of standards in all of our locations.  Zen means peace. It is quiet and stress-free.  You know that when you book a room through Zen, you will get best value-for -money, so it is stress-free,” explains Boublil.

“Today, Zen Rooms operates in 1,000 locations in Southeast Asia.  We started the company in Jakarta 18 months ago.  Now, we are one of the main budget hotel brands in Indonesia,” Boublil disclosed in an interview somewhere in Makati City.

Zen Rooms’ Presence in PH

A Filipino-French executive, Benjamin Nicolas, was appointed by Zen Rooms last year as country manager for the Philippines. In just six months, Zen Rooms already started a total of 600 rooms in Cebu City, Boracay, Manila, Palawan, Angeles City and other key locations in the country, making it among the five biggest budget hotel providers in the country. Observers say Zen Rooms has become a challenger of other popular hotels seen as leaders in the industry, like Red Planet and Go Hotels.

Boublil further says the plan is to add more rooms, double the number in fact, in the next six months. This will make it the third biggest budget hotel provider, emerging as the chief hotel brand by the year 2018.

“Now, we have more than 600 rooms in 100 locations.  You can find Zen wherever you travel in the Philippines. A big push is going to happen,” Boublil reveals. He added how, “We went live six months ago in the Philippines, first in Manila, then expanded to key cities and more are to come.  We are opening in Palawan in two weeks.”

Besides the country and Indonesia, Zen Rooms is also in business in Singapore, Thailand, Hong Kong, Malaysia Brazil and Sri Lanka.

Boublil decries the high priced yet inefficient budget hotel industry in the country. “The prices are high for standard of quality. We come in with competitive prices. Here in the Philippines, you have quality issues and on top of it, real price issues.  Relative to the cost of living and the wages, hotels are expensive.  It makes no sense to pay P2,000 for a budget hotel,” he explains.

However, instead of owning properties, Zen Rooms works with independent hotels. They also consider teaming up with guesthouses and apartments. “We don’t build new hotels.  We partner with the existing ones and we force upgrades, if we think they are needed.

“In the end, every Zen Rooms has the same quality standards.  We operate on the budget segment.  Our prices start in the Philippines at P850 to P1,500. We also have some premium properties in Palawan and Boracay because of the demographic profile,” Boublil clarifies.

Property owners get a clear brand in return. “We essentially bring the power of the franchise to them, which means a franchise with clear quality—the Zen Rooms. And then we bring them the power of marketing, we bring them the loyalty program and then the power of leverage,” he explains. “All of that contributes to getting more sales.”

Goals for the Year

Boublil sees that the first half of 2017 will catapult Zen Rooms to the top three budget hotel providers in the country, even the “top spot” or being number one, following its goal to double room inventory. “To enter the top three, we need to have 1,200 to 1,300 rooms which will happen in the next six months.  I see no reason why in 2018 we are not going to take the top spot in the Philippines.  We will become the No. 1 budget hotel chain in this country which in itself is a billion-dollar opportunity,” Boublil says.

“I know that Red Planet and Go Hotels are looking at us.  They don’t like what we are doing.  I am just happy that it is working so well in the Philippines.  I am happy that we are going to be the top player in 2018, or even sooner,” Boublil concludes.

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