GIC decides to fund Korean love hotel chain “Hey, let’s play” with its multi-million investment

Reuters published a news yesterday (11 Jun), reporting that Singapore GIC has invested money to fund a South Korean love hotel franchise Yanolja. Together with Booking Holdings, GIC invested US$200 million into Yanolja, valuing it at more than US$1 billion for a love hotel chain.

In Korean, Yanolja means “Hey, let’s play”.

Love hotels offer privacy for as little as a few hours at minimal cost for people to use. Popular association with extramarital affairs, prostitution and hidden cameras, however, has sullied their reputation, exacerbated by their often garish decor and low-key lighting, said Reuters.

Yanolja was founded in 2005 by former love hotel housekeeper and valet Lee Su-jin, whose search portal evolved into an advertising platform for love hotel operators seeking to replace customers lost after the 2004 passing of an anti-prostitution law in South Korea.

However, it’s CEO Kim Jong-yoon sought to change the image of love hotels by targeting millennial couples and budget tourists seeking short-term accommodation.

“I can proudly say we transformed the industry,” Kim said.

“Previously, many people were not able to go to love hotels out of embarrassment,” he said. “But we’ve drawn in guests even for travel. That’s the biggest change.”

Kim added, “We are very keen to go global.”

Even though revenue has doubled last year, the company is still losing money on a consolidated basis. It aims to sell shares in an IPO by 2022 at the latest, Kim said.

Singapore Police tighten rules for hotels offering hourly rates

Meanwhile, in Sep 2009, then Senior Minister of State for Trade and Industry Iswaran told the House that close to half of the then approximately 250 hotels in Singapore offered bookings by hourly rates. He then announced a tightening of allowing hotel rooms to be booked by the hour.

Mr Iswaran said, “In consultation with the Police, the HLB (Hotel Licensing Board) is also in the process of introducing additional upfront process requirements when hotels apply for their operating licences.”

“Specifically, hotels will be required to indicate in their applications if they intend to offer transit rates, and explain their reasons for doing so. To ensure the safety of guests and curb possible illegal activities, such hotels will have to propose security and preventive measures, such as the installation of CCTVs in common areas or the deployment of security guards,” he added.

“I would like to assure Members that the HLB will continue to work with all relevant bodies to mitigate social disamenities that might arise from hotel operations.”

It’s not known if Yanolja, “Hey, let’s play”, will be allowed to offer hourly rate bookings for customers if and when it expands into Singapore.