Japanese vacation rentals startup H2O (Hospitality 2.0) has received $7 million in Series B funding from Samsung Ventures, Stonebridge Ventures, IMM Investment and Shinhan Capital, bringing its total raised to $18 million.
H2O enables owners to manage operations, housekeeping and bookings from a variety of online travel agencies right on its platform, which can reduce the cost of doing business. The company also recently launched a vacation rental brand to expand its real estate development business, including a brand new hotel near Universal Studios Japan.
The company has had great success since its inception in 2015. There are currently around 5,000 managed rooms connected to the platform, which is used by over 25 online travel agencies. Revenue has doubled every quarter in the past two years.
“We’re pleased to be part of the fastest-growing hospitality company in Japan,” Eric Kim, senior investment manager at Samsung Ventures, said in a statement. “H2O has already proven product market fit within Japan, and we expect them to continue to thrive as they expand outside of major cities.”
Japan’s tourism industry is booming in recent years, a fact acknowledged by H2O CEO John Lee, and is widely considered to be the fastest growing travel destination on the planet. The United Nations World Tourism Organization estimates that 31.2 million overseas travelers stayed in Japan in 2018, a rise of 263 percent since 2010. The country’s government has suggested this number will grow to 40 million in coming years.
These statistics do not take into the account the coming Olympics Games, which are being held in Tokyo this summer. An estimated 10 million visitors are expected to descend on the city and it has been reported that the Japanese capital is short over 14,000 hotel rooms each day of the Olympics.
As such, developers are rushing to build luxury hotels throughout Tokyo and massive cruise liners are docking at ports in order to catch some of the overflow. According to Booking.com, 89% of Tokyo accommodations were already booked for the dates of the Olympics as of November 2019. It is unclear how Airbnb’s recent sponsorship deal with the International Olympic Committee (IOC) will help relieve some of this stress.
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