500 Billion KRW Investment from Mirae Asset
Competing on Price Competitiveness Including Fees
[Asia Economy Reporter Donghyun Choi] Accommodation and activity platform Yanolja is intensifying its focus on the overseas travel market. With approximately 50 billion KRW in investment secured from Mirae Asset Group, the company plans to expand its business categories in the overseas travel sector and pursue mergers and acquisitions (M&A).
Yanolja announced on the 28th that it has completed a 50 billion KRW investment from Mirae Asset Capital. A Yanolja representative explained, "As travel and leisure consumption have shifted online during the COVID-19 era, there is an expectation that Yanolja will benefit significantly in the near term, which was reflected in the investment." Yanolja, which has recorded profits for the past three years and is experiencing high growth, plans to rapidly grow its recently intensified overseas travel business using this investment.
Yanolja's entry into the overseas travel business dates back to October last year. At that time, Yanolja acquired a stake in Onlinetour for about 50 billion KRW, marking its first step into the outbound market (overseas travel by domestic citizens). Established in 2000, Onlinetour has been a pioneer in online transformation of the traditional comprehensive travel industry, which was centered on branches and agencies, by building a real-time flight search engine and reservation system early on.
Having considered business synergies with Onlinetour, Yanolja unveiled its first result yesterday: a service that integrates systems from 10 airlines to enable real-time booking of domestic and international flights. Yanolja’s strategy is to compete on price from the early stages by waiving the ticketing fee, which can be up to 40,000 KRW for a round-trip overseas flight for two people. Yanolja CEO Myunghoon Jung said, "Onlinetour is recognized in the industry for its sourcing capabilities, product planning, and operational skills. By combining their know-how with our system, we will further advance our overseas travel business."
Yanolja is likely to expand its overseas travel business by following the successful model it used domestically. Starting as an accommodation reservation service, Yanolja expanded its business areas by adding categories closely linked to lodging, such as transportation, activities, dining, and space rental. For overseas travel, the business structure is expected to be centered on 'airlines,' with hotels, activities, and leisure abroad connected accordingly. CEO Jung explained, "We will start with overseas flights and plan to sequentially introduce hotels, bundled products, and activity packages in the second half of the year. We are carefully weighing the stages and speed considering the COVID-19 situation and international circumstances." He added, "We are also continuously looking for opportunities to acquire domestic and international travel and leisure-related companies. While the business must align well with ours, we are seeking companies with deep expertise in technically resolving customer issues."
This strategy stems from expectations that ‘revenge consumption’ for overseas travel will revive. A Yanolja representative stated, "We will regulate our pace by initially focusing on nearby Asian markets and then expanding to the Americas and Europe."
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