Hospitality tech startup Section L raises 110 million yen to expand its hotel management and SaaS business!

Hotel management business that was born in the Corona Disaster and has grown steadily.

Section L will be the first of its own hotels in July 2020,Section L Ginza Eastopened in Chuo-ku, Tokyo. While the average occupancy rate of accommodations in Tokyo slumped to 14.21 TP3T due to travel restrictions caused by the Corona disaster and other factors, Section L Ginza EastAverage monthly occupancy rate of more than 70% since opening, and ADR (average room rate per room) more than twice that of neighboring competing facilitiesThe company's performance has been growing steadily, maintaining a high level of quality.

Data from: Japan Tourism Agency, Lodging and Tourism Statistics Survey

As its main background,Insufficient supply of facilities in Japan to meet the demand for mid- to upscale long-term staysThe reason for this is that the hotel is a "one-stop shopping" destination for all kinds of travelers. In addition to this, the well-designed guest rooms and high standard of service, which were created in collaboration with a premium Scandinavian furniture manufacturer, were also highly rated and attracted repeat guests.

In March 2021, the company's second hotel building will be completed.Section L Asakusa Eastwas opened in Sumida-ku, Tokyo.

Newly launched SaaS business to save manpower in hotel operations

With digital transformation (DX) gaining attention in various industries, the hotel industry is alsoThe idea is to reduce labor costs, which are said to account for about 50% of operating costs, and to reduce operational know-how.The company is a member of the "Japan Association of Corporate Executives" (JACO).

Developed and implemented in-house software to enable non-personal and unattended check-in at Section L as well,Improved the GOP (Gross Operating Profit Margin) of the facility, which was previously considered good at approximately 50%, to approximately 701 TP3TThe company has succeeded in making its software more efficient. Based on our success in improving operational efficiency, we plan to begin licensing out our software as an operational solution service to other companies in our industry by the end of the year.

Future Development

Hired a community manager, a software engineer, and a new manager for the third hotel building in order to grow the above two businesses.

"In the after-corona real estate market, hotels will be transformed into apartments, shopping malls will be transformed into complements to online shopping, and offices may have to be renovated to keep desks far enough apart. " 
The Economist, June 2020

In the tourism industry, which is on a recovery trend, Section L isFocus on the evolution of flexible accommodations (apartment hotels, etc.)The company is doing so.

In addition to expanding the number of houses in its own facilities,Plans to expand operation solution services to other companies in the same industry as SaaS businessWe are currently working on the development of the Section L brand and its operational solutions. In the future, we intend to franchise the Section L brand and management solutions in Japan and overseas, aiming to become a pioneering brand originating from Japan.

【【About Section L, Inc.]

Section L, Inc. is a hospitality company established in February 2020.

The majority of the founding team is a group of hotel management professionals who graduated from Cornell University's Hotel School of Management and have experience at top hotel chains such as Shangri-La and Four Seasons. The company's main business is the operation of apartment hotels under its own brand name and the development of software and community platforms for labor-saving solutions.
This start-up company proposes a new hospitality management that simultaneously pursues "profitability for real estate investors" and "emotional experiences for customers," which tend to be skewed to one side in conventional hotel operations.