WATER Hospitality protects $30M Series C to speed up hotel digital change

The pandemic has actually activated more demand for contactless and staff-less operations in the hospitality sector, and now H2O Hospitality, the unmanned hotel management company, has closed a $30 million round on the back of that increase. The South Korea and Japan-based startup automates backend and front processes consisting of lodging reservation, space management and front desk responsibilities, and it will be utilizing the funds to continue expanding its organization.

The Series C round (comparable to about 34 billion won) is being led by Kakao Financial investment and Korea Advancement Bank (KDB), Gorilla Private Equity, Intervest and NICE Investment also took part. With Southeast Asia’s joint fund, Kejora-Intervest Growth Fund also participated the round, it is an indication that WATER Hospitality will be focusing specifically on the Southeast Asian Market. WATER Hospitality has actually raised $7 million Series B round from Samsung Ventures, Stonebridge Ventures, IMM Investment and Shinhan Capital in February 2020.

H2O Hospitality will broaden its service further by adding numerous kinds of accommodations in South Korea and Japan in 2021 and 2022 and prepares to enter Singapore and Indonesia in 4Q in 2022 in line with its Southeast Asia penetration technique, according to H2O Hospitality co-founder and CEO John Lee.

“H2O Hospitality is presently talking with a number of international hotel chain business to partner with their digital improvement and operation outside of Korea and Japan,” Lee informed TechCrunch.

H2O will buy R&D to advance its client channel options and contactless check-in systems depending on customer requirements of each nation in Asia, Lee continued.

“We need optimal system development and personalization for each lodging and scenario to lead effective hotel digital improvement even after COVID-19,” Lee said in an email interview.

H2O Hospitality was established in South Korea 2015 by CEO John Lee, and it has been on something of an acquisition-expansion spree. It got in Japan in 2017, for example, by obtaining a number of Japanese hospitality management business. In 2021, WATER got 2 South Korean business such as the contactless hotel solution business, ImGATE, and a regional developer startup, Change, in order to improve its innovation and ESG skills.

These days, the company operates roughly 7,500 accommodations including hotels, ryokans and guest homes, in Tokyo, Osaka, Seoul, Busan, and Bangkok.

H2O Hospitality’s Details and Communications Innovation(ICT)-based hotel management system

, which allows hotel management to digitize and automate, includes the Channel Management System(CMS), Property Management System(PMS), Room Management System(RMS), and Facility Management System(FMS). Its incorporated hotel management system can minimize hotel management’s fixed operating expense by 50%, while increasing profits by as much as 20%, according

to its declaration.”COVID-19 struck the hospitality market the most and most of the hotels wanted to decrease their fixed cost level, however it was difficult with their existing operational flow,” Lee continued, “They needed to go through digital improvement”.

When asked how the pandemic affected H2O as COVID-19 still freezes most of the tourism market, Lee stated H2O’s revenue has actually been increased by as much as 30% before the pandemic, however that percentage has been dropped to 5-15% post COVID-19. Income drivers nowadays are based around tools it’s constructed to enhance the efficiency of its customers. They include its automated dynamic pricing (ADR) tool and varied sales channels like online and offline travel bureau in domestic and overseas, he said.

Lee also mentioned that H2O has actually been onboarding a lot of properties and that has actually also contributed to H2O’s profits development in the last 18 months. H2O was the only company in Asia, he declares, and numerous homeowner have actually started to get onboard given that August 2020, he discussed.

“Every hotel that we onboarded throughout the pandemic reversed their earnings & & losses declarations and started to recuperate their monetary loss,” Lee said.

There are currently about 16.4 million hotel spaces worldwide that generate $570 billion a year, according to Lee. H2O believes that it can digitize all the lodging accommodations in the world as the company’s main objective is not constructing a hotel brand name however enabling hotel owners to run their properties with much better operation, he stated.

Lee explained that the existing hotel operation procedure looks a lot like that of “2G phones”, that was at a stage before turning to smartphones, and H2O is turning the general hotel operation into a “smartphone”.

“This is a really natural transition for the (hospitality) market as it was likewise natural for the mobile phone users to transit from 2G phone to mobile phone,” Lee stated.

Sadly, the cross-border inbound tourist market has still been stopped for both Korea and Japan even though each domestic market is still pumping demand for the marketplace, Lee mentioned.

“We believe the incoming tourism market will recuperate within a year as the vaccinations grow for both nations (Korea and Japan),” Lee said.

Managing Director at Kejora-Intervest Growth Fund Jun-seok Kang told TechCrunch: “We knew this new age for hotel digital transformation pattern was coming even prior to the pandemic; nevertheless, COVID-19 certainly accelerated the transition duration, and our company believe WATER will prosper in the transforming hotel market.”