[INTERVIEW] Yanolja system puts hotel management in the cloud
Company expects its product to knock Oracle off the top spot
To most Koreans, Yanolja is a reservation app with the country’s largest data base of motels, guest houses, hotels and fancy resorts.
But despite its well-established reservations platform here, internationally Yanolja operates mainly as a business-to-business provider of its hotel property management system (PMS), the software that hotels use to manage everything from reservations to housekeeping.
In 2019, Yanolja acquired the top two local PMS providers and eZee Technosys, an Indian company that ranks second globally. Now it believes it can take down the industry’s long-standing leader, Oracle Hospitality.
“We’re adding 1,000 clients per month, and this speed will get faster. Under that scenario, we’ll be able to rank first in the global PMS market by property in the next two years,” said Yanolja CEO Kim Jong-yoon, who leads the company’s head of online business and corporate strategy.
What makes Yanolja so confident is that its PMS is cloud-based, whereas Oracle’s product works on individual servers and data centers.
The connectivity the cloud offers is why hotels worldwide are so enthusiastic about adopting this system, Kim says, especially as they grapple with higher demand to minimize human contact caused by the coronavirus pandemic. The number of clients newly added each month doubled after Covid-19 spread this year.
“A cloud-based PMS is the only way to realize ‘untact’ features — an environment where data can freely flow in and out of one cloud server. And the industry seems to realize that once this pandemic is over, tourists will only flock to accommodation that is ready,” said Kim.
Kim joined Yanolja in 2015 and has worked with its online strategy as the company transformed from a motel review app to a reservation platform, which now linksm users to accommodation, transport and tourism activities.
Below are edited excerpts of an interview with the Korea JoongAng Daily on July 24 at Yanolja’s headquarters in Gangnam District, southern Seoul.
Q. Oracle has dominated this market for a very long time. What chance does cloud-based PMS have at shaking up this order?
A. Before the cloud came along, only large companies were able to invest in data centers and internal servers to establish a management system. The cloud breaks this barrier, making it available for smaller companies as well because all you need to do is install, instead of setting up physical infrastructure.
Another advantage is the flow of data. Under an old system, data had to be passed from one database to the next. With the cloud, customer data is sent to one big storage unit where the necessary information can be transferred and retrieved at any time.
For example, if you purchase a hotel package with breakfast included, the next morning an employee at the restaurant asks for your name and room number. That employee would have printed that form off in the morning and typed it into the computer after breakfast was over. All of these manual procedures are because data doesn't flow from one station to another.
Q. Can you give us an example of any "untact" features that could be made possible by a cloud-based management system?
A. At the moment, we have a kiosk that issues a plastic card with a QR code sent to your phone after application. But what we're developing is a "smart key" system in which your phone can replace the plastic card for good. This will mean you can control the room temperature before entering, check in remotely, open the door and order room service.
Because there is no physical key, you don’t have to talk to anyone to check out. Once you’re out, an alarm will be sent to the maintenance team.
At the moment, we’re developing ways to use blockchain. As a private enterprise, we can’t possess customers’ personal information. But if that data is saved on a decentralized blockchain server, all we need is the access to compare personal information and the information our client has on their reservation.
The real reason blockchain is necessary is because we want this check-in process to be available in multiple countries.
The cloud is the only way all that data can be connected across borders. We have 22,000 users in 160 countries using our system. Our goal is to enable our app users to check in while in any of them with our cloud and blockchain identification. No more paper copies of passports and identity cards.
Q. Some customers expect high-quality services through human contact, especially at high-end hotels. Are you worried that 'untact' services aren't going to appeal to everyone?
A. Let's compare restaurants and hotel lobbies. At the restaurant, people are seated. They like being waited on. But at hotel lobbies, people stand in line to check in. At 3 p.m. when check-in opens, the queue gets longer. Then they take your passports and card information. This comes naturally to us, but security-wise, there are so many risks.
The procedure is the same at expensive seven- or six-star hotels, and nobody likes this. Room service has to be made with a phone call. Turning the lights out needs practice — you never find the right button for the exact lighting you want to control on the first guess. These are all user experiences that can be improved.
Our service is in higher demand by high-end operators, although a lot of them can’t apply it because they lack the cloud-based infrastructure.
Q. I imagine the coronavirus pandemic boosted the urge to make management systems go online and digital. Have you felt any difference?
A. Inquiries and orders have greatly increased — especially from Southeast Asia, India, Pakistan and Africa, which are just beginning to establish property management systems.
Before Covid-19, we signed about 500 contracts per month. Now, we have 1,000. The change is driven by national initiatives. In the end, tourists will fly to countries and stay at accommodation that is ready, and this isn’t something individual businesses can prepare for on a national level.
So a lot of the contact we receive is from governments, real estate developers or telecommunications operators that lay out the country’s infrastructure.
Q. A lot of Korean consumers are unaware of Yanolja’s hotel management business. Exactly how big is that segment compared to the mobile app.
A. By revenue, the business-to-consumer business accounts for 60 percent. But the growth rate is much bigger in business-to-business. If you think of Amazon, it started out as an e-commerce website in the United States, but its cloud service is what’s present worldwide.
As a mobile app, Yanolja’s goal is not to be the No. 1 in the world. We’re already the go-to service in Korea, and our goal is to continue supporting the joy of traveling for domestic users.
But when it comes to the cloud, Korea is just one of the 160 markets we do business in. Our goal in this business is to be No. 1. We might be acclaimed as a fast-growing start-up right now, but in the long run, businesses can’t survive unless they’re No. 1 in something.
This year, we’re expecting to double our growth in the cloud-based PMS business in terms of customers. Once the pandemic is over and we start seeing our contracts realized as revenue, we’ll be able to see threefold growth in 2021.
BY SONG KYOUNG-SON [firstname.lastname@example.org]