“Transition is going to be painful but it is needed so progress can happen.”
Thus says Nathan Boublil, a young businessman who is disrupting the hospitality industry in Southeast Asia, as we know it, to bring in what he calls “a societal service.”
As the world ushered in 2018, this travel savvy generation already began marking dates across the next 12 months with holidays around the world. But besides working out itineraries, they initially have to consider airfare and accommodation before making a go of their plans.
Boublil, himself a globetrotter both for business and pleasure, observed that of these two factors, airfare rates are deemed by travelers to be more reasonable. He believes budget airlines have done the world’s population a great service for flying passengers on unprecedented cheaper tickets.
Accommodation, meanwhile, is a whole other story.
“Because of unreasonable accommodations and hotel prices, many people are limited to traveling where friends or family live so they can crash in their place for free,” the 32-year-old told The Sunday Times Magazine in an exclusive interview.
Now those who dare travel to a foreign territory without a familiar face to welcome them, according to Boublil, have to make do with cheap accommodations with sub-par services and facilities just to sleep at night. The realization hit him here in Southeast Asia when he began traveling to the region more than 10 years ago.
“It dawned on me that if you compare Southeast Asian hospitality with Western hospitality, you’ll see a lot of differences. In the West, hospitality is regulated. That means, just like the restaurant sector, the hotels and other accommodations will have checks regularly done to make sure that hygiene standards are maintained,” the French businessman explained.
“In Southeast Asia, that is missing. The [hospitality]sector is largely unregulated, and it is very unstructured,” he added.
To be specific, Boublil described the conditions of rooms—filthy spaces with cockroaches if guests are extremely unlucky, uncomfortable beds and missing essentials among other factors that can ruin a holiday.
Rather than be turned off, however, Boublil and his business partner Kiren Tanna saw an opportunity to elevate the industry.
“Our view is that if you have a sector that is unregulated, messy and where the standards can really vary, then it should be up to the private sector to take over and restructure,” he stated.
Birth of Zen Rooms
And so in 2015, Boublil and Tanna—who both come from unrelated business endeavors—launched Zen Rooms in Indonesia where they saw a large gap in the hospitality industry.
Considered a budget hotel chain, Zen Rooms basically takes existing rooms—apartments in some cases—and operate it with the service level provided by hotels.
“What we do is we partner with independent accommodation providers, which until we arrived comprised 90-percent of the market. That also meant there were very few hotel chains in Southeast Asia. So we partnered with the small players and then we imposed a very strict set of standards,” Boublil explained.
By strict standards, Boublil meant efficiencies in operations, sales and technology, which he and his team showed The Sunday Times Magazine during the interview at Icon Plaza in Bonifacio Global City—one of Zen’s first ventures in the Philippines.
The room was modern, neat and looked well maintained from every corner. There was neither a spec of dust nor a strand of hair, which some so-called decent hotels that offer rooms with the same rate between P2,500 to P3,000 per night neglect to remove even after mandatory clean-up.
“By implementing these efficiencies, you can sell more, which then means you can bring prices down,” the businessman shared, illustrating how they were able to come up with affordable room rates.
While independent players continue to go into renting out their properties—specifically owners who upload single units through popular application Airbnb—Boublil insists their service is still far ahead.
“Most of the time, they cannot afford a team for maintenance because they are single landlords. For example, if a guest wants to check in at 3 a.m., are they willing to wake up at that hour? I bet no, but we do and we will because we have someone who watches the rooms 24/7.
“What I’m trying to say is that, if you are an amateur, you can only go so far. To offer professional service, you need to have many units and then hire a real team of cleaners, as well as a team who will do your sales to make sure you are really on full capacity.”
Another come-on for the chain’s growing clientele is its “no credit card needed policy.” What this means is that customers can book rooms even without a credit card—a policy that many hotels and even small players have been relying on to ensure they get paid even a small portion should a guest decide to cancel last minute.
“It required a little bit of work on our side because last minute cancellations mean that a room has perished, which has a negative impact on our inventory. But we eventually worked it out six months ago and now I can say that we are the first in Southeast Asia to provide such a service,” Boublil shared with a hint of pride.
Arrival in PH
Seeing their initial model fly off in Indonesia, Boublil and his team decided to broaden their horizon and look for another market that needed their service.
Lucky for Filipinos and those visiting the country, they set their sight on Philippines next.
“We saw that Philippines is even worse than all the other markets we’ve had—not only did it have a severe value for money problem in the sector, it also has a critical undersupply,” Boublil frankly expressed.
For him, there are just not enough rooms being built in the country and the best example of this scenario is the growing business district of Bonifacio Global City.
“You have this wonderful area of Manila now where you have a lot of residential real estate. All the offices have moved to BGC and yet you have zero budget hotels. There are only three options here, the cheapest of which is P6,500 per night until we arrived. Below that, nothing. That is incredible for an area that a lot of people who want to stay in,” he explained.
He believes sky-high rates means that there are key individuals in the industry who are not doing their jobs to the best of their ability to provide more options for the market.
“I’d say it’s high by looking at the median salary in the city,” he said matter-of-factly.
Citing an example, Boublil said that with Manila’s median salary of P30,000 and a decent hotel’s rate of P3,000 per night, a regular consumer can only buy a 10-nights stay. Given their standard, a guest should be able to buy 30 nights of stay with their median or average salary.
“When you see a 10 times ratio, then there’s really a problem. Europe offers 30 times the ratio. Your hotel rate here has the same price of that in Spain, even in France, but the wages there are much higher,” the executive further exampled.
Beaming with pride, Boublil then revealed that since opening in 2016, Zen Rooms has made a presence in 12 cities in the Philippines. They are not only in Metro Manila but manage units in Boracay, Tagaytay, Palawan and Cebu, among many others.
Zen Rooms has also expanded into the apartment industry under the name Zen Homes, and as such offer 100 full-service rooms for staycationers and long-term lessees in Makati and BGC. The units are available for as low as P1,500 per night, half the price of most serviced apartments.
Besides Icon Plaza, Zen Homes also hosts units in Forbeswood Parklane and Forbeswood Heights, Burgos Circle, Venice in McKinley, and Bellagio.
In the Southeast Asian region, meanwhile, Zen Rooms is currently managing 6,000 units across seven countries including Malaysia, Thailand and Singapore.
Given these figures, the company rose quickly to No. 3 status among the budget industry in the region.
“We’re the one that is growing the fastest and we are projecting that same time next year, we’ll be No. 1,” Boublil declared.
According to Boublil the inspiration of Zen Rooms was not foreign to him since he also built his first company to bridge a gap and building a system to solve it.
“For me, I start businesses where I feel it makes not only business sense but a societal sense too, otherwise I don’t think it will be sustainable.”
Beginning his work in the finance industry in London, England, Boublil worked for the French government as a diplomat before pursuing postgraduate studies at the University of Cambridge.
Thereafter, he founded his first company, which he ran for three years and took him around the world.
“I was essentially building software solutions for government clients after identifying a gap while working for the French government. I’d see a problem there on how unprofessional they are in analyzing populations,” Boublil recalled.
As such, Boublil eventually designed a software solution company and built his own team. His noble project, which won entrepreneurial awards in the UK including Entrepreneur of the Year at Cambridge in 2013, landed financial backing from giant companies Google and Microsoft and eventually connected him with various government offices in Africa, Asia and Latin America. His company also had news agencies like Reuters for clients.
Three years into wearing too many hats for his first company—as CEO and head of sales, among others—Boublil decided he needed a breather and sold it.
“I was very tired and just started thinking about what’s next. And then I went into traveling, this time for leisure, and that’s how I was able to connect with my co-founder and investors for my new ventures.”
As he brought together his background in finance, entrepreneurial instinct and, personal experiences in hotel service [he was a receptionist in a London hotel at age 18], Boublil met Tanna [who built the popular food app FoodPanda]and together founded Zen Rooms. They secured the financial backing of Rocket Internet, which is the same company behind web-based services Lazada and Zalora, among others.
“Looking back, I think building a business is having all the stars aligned—the idea has to be right, your investors have to be right and the people doing it have to be right,” the businessman imparted.
But even as he enjoys an exponential growth in his hospitality business, Boublil still considers himself and his company as “disruptors” of the hospitality scene in the Southeast Asia, but ones that only seek to professionalize those already in the business.
“Existing players should have disrupted themselves long ago and really work hard to bring quality service with lower prices. Sadly, they haven’t, so the way I see it, we are professionalizing the scene. We are added sources of competition yes, but we pay a lot of attention to cleanliness, to basic things, and will therefore force the industry to rethink of their service,” Boublil related.
At the end of the day, the businessman believes that good service and cheap rates should not be two separate things in the hospitality industry. Bringing them together is actually a noble way to serve society.
“Any kind of service, not just with Zen Rooms, that can push people to travel more will do a great service to the society in terms of education. Traveling is an amazing source of knowledge, wisdom, cultural understanding, and everyone deserves to have this opportunity,” he ended.