Zen Rooms plans budget hotels in more cities

INTERNATIONAL budget hotel chain Zen Rooms is expanding to five or six more cities in the Philippines in 2018, as it aims to address the undersupply in affordable hotel rooms in the country.

Having entered the Philippines only in 2016, the company has already managed to put up over 1,000 rooms across 10 cities, which Zen Rooms Cofounder and Managing Director Nathan Boublil said is growing at a clip of 10% every month.

“We’re always looking for new cities to expand to. And so I think we will be adding in the next year, we’ll be adding five or six more cities,” Mr. Boublil told reporters at the sidelines of the 3rd AVCJ Private Equity & Venture Forum — Philippines 2017 in Makati City last week.

In an earlier interview, Mr. Boublil said the expansion in the Philippines would make Zen Rooms the number one player in the country by 2018, growing faster than Red Planet and the Gokongwei-led Go Hotel.

The company’s expansion comes alongside Mr. Boublil’s vision to bring down hotel prices in a market where the lack of choices is pushing hotel rates up.

“In the hospitality sector, there is clearly an undersupply in Manila itself. There is not enough affordable options. Anybody that has tried to book a hotel here will know that it’s way too expensive,” Mr. Boublil said.

The executive noted that Zen Rooms caters primarily to domestic travelers rather than international backpackers.

“And therefore wherever people go we’re gonna have to follow that. And propose to them a good value for money accommodation option and so you will see us in any major city,” he said.

The company is also partnering with airlines such as AirAsia and Cebu Pacific to boost traffic into its hotels.

“We’re trying to replicate what they’ve done to the airlines business, allowing more people to travel safely and on a budget, allowing the chance to partner with them a few months back,” Mr. Boublil said, adding that they also have partnerships online hospitality service Airbnb, online marketplace Lazada, as well as ride- hailing mobile application Uber.

Mr. Boublil declined to give specifics on how much the company is spending for its expansion in the country, but noted that “it’s in the million dollars.”

Founded in Indonesia in 2015, Zen Rooms has grown to more than 5,000 rooms across over 35 locations in Southeast Asia, making it the fastest- growing budget hotel chain in the region. The company is backed by Rocket Internet SE of Germany.